Euroseas Ltd F-3, filed Dec 29, 2022
Euroseas Ltd. (ESEA)
F-3
2022-12-29
View Original
Added on
October 17, 2026
As filed with the Securities and Exchange Commission on December 29, 2022
|
Registration Statement No. 333 –________
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EUROSEAS LTD.
(Exact name of registrant as specified in its charter)
|
Republic of the Marshall Islands
(State or other jurisdiction of
incorporation or organization)
|
N/A
(I.R.S. Employer
Identification No.)
|
|
Euroseas Ltd.
4 Messogiou & Evropis Street
151 24 Maroussi, Greece
001 30 211 1804005
(Address and telephone number of Registrant's principal executive offices)
|
Seward & Kissel LLP
Attention: Anthony Tu-Sekine, Esq.
901 K Street NW
Washington, D.C. 20001
(202) 661-7150
(Name, address and telephone number of agent for service)
|
Copies to:
|
Anthony Tu-Sekine, Esq.
Seward & Kissel LLP
901 K Street NW
Washington, D.C. 20001
(202) 661-7150
|
||
Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective as determined by market
conditions and other factors.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. □
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ⌧
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. □
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities
Act, check the following box. □
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under
the Securities Act, check the following box. □
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company □
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. □
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
PROSPECTUS (subject to completion dated December 29, 2022)
$400,000,000
Common Shares, Preferred Shares, Debt Securities, Warrants and Units
Through this prospectus, we may periodically offer:
(1) our common shares,
(2) our preferred shares,
(3) our debt securities,
(4) our warrants, and
(5) our units.
We may also offer securities of the types listed above that are convertible or exchangeable into one or more of the securities listed above.
The aggregate offering price of all securities issued and sold under this prospectus may not exceed $400,000,000. The securities issued and sold under this prospectus may be
offered directly or through underwriters, agents or dealers. The names of any underwriters, agents or dealers will be included in a supplement to this prospectus. The prices and other terms of the securities issued and sold under this prospectus will
be determined at the time of their offering and will be described in a supplement to this prospectus.
Our common shares are currently listed on the Nasdaq Capital Market under the symbol "ESEA".
An investment in these securities involves risks. See the section entitled "Risk Factors" on page 6, and other risk factors contained in the applicable prospectus supplement and
in the documents incorporated by reference herein and therein.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is December 29, 2022.
TABLE OF CONTENTS
Page
|
PROSPECTUS SUMMARY
|
1
|
|
RISK FACTORS
|
6
|
|
USE OF PROCEEDS
|
7
|
|
OUR CAPITALIZATION
|
8
|
|
DIVIDEND POLICY
|
9
|
|
PLAN OF DISTRIBUTION
|
10
|
|
DESCRIPTION OF CAPITAL STOCK
|
12
|
|
DESCRIPTION OF PREFERRED SHARES
|
16
|
|
DESCRIPTION OF WARRANTS
|
17
|
|
DESCRIPTION OF DEBT SECURITIES
|
18
|
|
DESCRIPTION OF UNITS
|
24
|
|
TAX CONSIDERATIONS
|
25
|
|
EXPENSES
|
32
|
|
EXPERTS
|
32
|
|
LEGAL MATTERS
|
32
|
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION
|
32
|
|
GLOSSARY OF SHIPPING TERMS
|
34
|
i
ABOUT THIS PROSPECTUS
As permitted under the rules of the U.S. Securities and Exchange Commission, or the Commission, this prospectus incorporates important business information about us that is contained in documents
that we have previously filed with the Commission but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the Commission at www.sec.gov, as well as other
sources. You may also obtain copies of the incorporated documents, without charge, upon written or oral request to Euroseas Ltd., 4 Messogiou & Evropis Street, 151 24 Maroussi, Greece, +30-211-1804005. See "Where You Can Find Additional
Information."
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any person to provide information other than that provided in this prospectus
and the documents incorporated by reference. We are not making an offer to sell common shares in any state or other jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is
accurate as of any date other than the date on the front of this prospectus regardless of its time of delivery, and you should not consider any information in this prospectus or in the documents incorporated by reference herein to be investment,
legal or tax advice. We encourage you to consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an investment in our securities.
Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus to "Euroseas," the "Company," "we," "us," "our," or similar references, mean Euroseas Ltd. and,
where applicable, its consolidated subsidiaries.
ENFORCEABILITY OF CIVIL LIABILITIES
Euroseas Ltd. is a Marshall Islands corporation and our principal executive offices are located outside the United States in Maroussi, Greece. A majority of our directors, officers and the experts
named in the prospectus reside outside the United States. In addition, a substantial portion of our assets and the assets of our directors, officers and experts are located outside the United States. As a result, you may have difficulty serving legal
process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in United States courts against us or these persons in any action, including
actions based upon the civil liability provisions of United States federal or state securities laws. Furthermore, there is substantial doubt that the courts of the Marshall Islands or Greece would enter judgments in original actions brought in those
courts predicated on United States federal or state securities laws.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
Euroseas Ltd. desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe
harbor legislation. This prospectus contains forward-looking statements. These forward-looking statements include information about possible or assumed future results of our operations or our performance. Words such as "expects," "intends," "plans,"
"believes," "anticipates," "estimates," and variations of such words and similar expressions are intended to identify the forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant
uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements
regarding:
|
•
|
our future operating or financial results;
|
|
•
|
future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
|
|
•
|
container shipping industry trends, including charter rates and factors affecting vessel supply and demand;
|
|
•
|
fluctuations in our stock price as a result of volatility in securities markets;
|
|
•
|
the impact of increasing scrutiny and changing expectations from investors, lenders, charterers and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies;
|
|
•
|
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
|
|
•
|
availability of crew, number of off-hire days, drydocking requirements and insurance costs;
|
|
•
|
our expectations about the availability of vessels to purchase or the useful lives of our vessels;
|
ii
|
•
|
our expectations relating to dividend payments and our ability to make such payments;
|
|
•
|
our ability to leverage to our advantage our manager's relationships and reputations in the container shipping industry;
|
|
•
|
changes in seaborne and other transportation patterns;
|
|
•
|
changes in governmental rules and regulations or actions taken by regulatory authorities;
|
|
•
|
potential liability from future litigation;
|
|
•
|
global and regional political conditions;
|
|
•
|
acts of terrorism and other hostilities, including piracy;
|
|
•
|
the severity and duration of natural disasters or public health emergencies, including the spread of coronavirus (“COVID-19”), including possible delays due to the quarantine of vessels and crew, as well as government-imposed shutdowns;
and
|
|
•
|
other factors discussed in the section titled "Risk Factors."
|
WE CAUTION READERS OF THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THEIR DATES. WE
UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENTS, OR THE DOCUMENTS TO WHICH WE REFER YOU IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, TO REFLECT ANY
CHANGE IN OUR EXPECTATIONS WITH RESPECT TO SUCH STATEMENTS OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY STATEMENT IS BASED. THESE FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF OUR FUTURE PERFORMANCE, AND ACTUAL RESULTS AND
FUTURE DEVELOPMENTS MAY VARY MATERIALLY FROM THOSE PROJECTED IN THE FORWARD LOOKING STATEMENTS.
Unless otherwise indicated, all references to "dollars" and "$" in this prospectus are to United States dollars and financial information presented in this prospectus that is derived from financial
statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States.
This prospectus is part of a registration statement that we filed with the Commission using a shelf registration process. Under the shelf registration process, we may sell the common shares,
preferred shares, debt securities, warrants and units described in this prospectus in one or more offerings up to a total dollar amount of $400,000,000. This prospectus only provides you with a general description of the securities we may offer. Each
time we offer securities, we will provide you with a supplement to this prospectus that will describe the specific information about the securities being offered and the specific terms of that offering. The prospectus supplement may also add, update
or change the information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you
should read carefully both this prospectus and any prospectus supplement, together with the additional information described below.
This prospectus does not contain all the information provided in the registration statement that we filed with the Commission. For further information about us or the securities offered hereby, you
should refer to the registration statement, which you can obtain from the Commission as described below under "Where You Can Find Additional Information."
iii
PROSPECTUS SUMMARY
This section summarizes some of the information and consolidated financial statements that appear later in this prospectus or in documents incorporated by reference herein. As an
investor or prospective investor, you should review carefully the risk factors and the more detailed information and financial statements that appear later in this prospectus or in documents incorporated by reference herein. In this prospectus,
references to "Euroseas," "Company," "we," "our," "ours" and "us" refer to Euroseas Ltd., and its subsidiaries, unless otherwise stated or the context requires.
We use the term "deadweight tons," or dwt, in describing the capacity of our vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the
maximum weight of cargo and supplies that a vessel can carry. We use the term "twenty foot equivalent unit," or teu, the international standard measure of containers, in describing the capacity of our containerships. For the definition of certain
shipping terms used in this prospectus, see the "Glossary of Shipping Terms" on page 34 of this prospectus.
Our Company
Euroseas Ltd. is a Marshall Islands company incorporated under the Business Corporations Act of the Marshall Islands, or BCA, on May 5, 2005. We are a provider of worldwide
ocean-going transportation services. On May 30, 2018, the Company spun-off its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold at the time) into EuroDry Ltd. (“EuroDry”), a separate publicly listed
company also listed on the Nasdaq Capital Market (the “Spin-off”). Shareholders of the Company received one EuroDry share for every five shares of the Company they held. As a result of the Spin-off and the subsequent sale of M/V Monica P, the Company
has become a pure containership company and the only publicly listed company concentrating on the feeder and intermediate containership sector. Our containerships transport dry and refrigerated containerized cargoes, mainly manufactured products and
perishables. As of December 22, 2022, our fleet consisted of eighteen containerships. The total cargo carrying capacity of the eighteen containerships is 737,404 dwt or 58,871 teu. Following the agreement to sell one of our containerships to be
delivered to its buyers in the beginning of January 2023, our fleet will consist of seventeen containerships with a total cargo carrying capacity of 666,038 dwt or 53,261 teu. We also have nine feeder containership vessels under construction,
expected to be delivered in 2023 and 2024. After the delivery of these newbuilding vessels, our fleet will consist of 26 vessels with a total carrying capacity of 956,246 dwt or 75,461 teu.
We actively manage the deployment of our fleet which is typically employed between short time charters, which generally last from several days to several months, and medium or
long term time charters, which can last up to several years. As of December 22, 2022, all our container vessels are under contract, except for one vessel undergoing repairs, which has since been agreed to be sold.
Vessels operating on medium and long term time charters provide more predictable cash flows but can yield lower profit margins than vessels operating in the short term charter
market during periods characterized by favorable market conditions. Vessels operating in the short term charter market generate revenues that are less predictable but may enable us to achieve increased profit margins during periods of high vessel
rates although we are exposed to the risk of declining vessel rates, which may have a materially adverse impact on our financial performance.
We are constantly evaluating opportunities to increase the number of our vessels deployed on medium and longer term time charters upon expiration of our existing charters;
however, we only expect to enter into longer term time charters if we can obtain contract terms that satisfy our criteria. We carefully evaluate the length and rate of the time charter contract at the time of fixing or renewing a contract,
considering market conditions, trends and expectations.
We constantly evaluate vessel purchase opportunities to expand our fleet accretive to our earnings and cash flow. Additionally, we will consider selling certain of our vessels when favorable sales
opportunities present themselves. If, at the time of sale, the carrying value is less than the sales price, we will realize a gain on sale, which will increase our earnings, but if, at the time of sale, the carrying value of a vessel is more than the
sales price, we will realize a loss on sale, which will negatively impact our earnings.
1
Our Fleet
As of December 22, 2022, the profile and deployment of our fleet is the following:
|
Name
|
Type
|
Dwt
|
TEU
|
Year Built
|
Employment(*)
|
TCE Rate ($/day)
|
|
Container Carriers
|
|
|
|
|
|
|
|
MARCOS V (*)
|
Intermediate
|
72,968
|
6,350
|
2005
|
TC until Dec-24
plus 12 months
option
|
$42,200
option $15,000
|
|
AKINADA BRIDGE (**)
|
Intermediate
|
71,366
|
5,610
|
2001
|
-
|
Agreed to be sold
|
|
SYNERGY BUSAN (*)
|
Intermediate
|
50,726
|
4,253
|
2009
|
TC until Aug-24
|
$25,000
|
|
SYNERGY ANTWERP (+)
|
Intermediate
|
50,726
|
4,253
|
2008
|
TC until Dec-23
|
$18,000
|
|
SYNERGY OAKLAND (*)
|
Intermediate
|
50,787
|
4,253
|
2009
|
TC until May-26
|
$42,000
|
|
SYNERGY KEELUNG (+)
|
Intermediate
|
50,969
|
4,253
|
2009
|
TC until Feb-23
|
$14,500
|
|
EMMANUEL P (*)
|
Intermediate
|
50,796
|
4,250
|
2005
|
TC until Mar-25
|
$19,000
|
|
RENA P (*)
|
Intermediate
|
50,796
|
4,250
|
2007
|
TC until Apr-24
then until Feb-25
|
$20,250
then CONTEX (***)
basis ($13,000 floor and $21,000 ceiling)
|
|
EM KEA (*)
|
Feeder
|
42,165
|
3,100
|
2007
|
TC until May-23
|
$22,000
|
|
EM ASTORIA (*)
|
Feeder
|
35,600
|
2,788
|
2004
|
TC until Feb-23
then until Feb-24
then until Feb-25
|
$65,000
$50,000
$20,000
|
|
EVRIDIKI G (*)
|
Feeder
|
34,677
|
2,556
|
2001
|
TC until Feb-25
|
$40,000
|
|
EM CORFU (*)
|
Feeder
|
34,654
|
2,556
|
2001
|
TC until Feb-25
|
$40,000
|
|
DIAMANTIS P (*)
|
Feeder
|
30,360
|
2,008
|
1998
|
TC until Oct-24
|
$27,000
|
|
EM SPETSES (*)
|
Feeder
|
23,224
|
1,740
|
2007
|
TC until Aug-24
|
$29,500
|
|
JONATHAN P (*)
|
Feeder
|
23,357
|
1,740
|
2006
|
TC until Sep-24
|
$26,662(****)
|
|
EM HYDRA (*)
|
Feeder
|
23,351
|
1,740
|
2005
|
TC until Apr-23
|
$20,000
|
|
JOANNA (*)
|
Feeder
|
22,301
|
1,732
|
1999
|
TC until May-23
|
$14,500
|
|
AEGEAN EXPRESS (*)
|
Feeder
|
18,581
|
1,439
|
1997
|
TC until Apr-25
|
$41,000
|
|
Total Container Carriers on the water
|
18
|
737,404
|
58,871
|
|
|
|
|
Vessels under construction
|
Type
|
Dwt
|
TEU
|
To be delivered
|
Employment (*)
|
TCE rate ($/day)
|
|
GREGOS (*)
|
Feeder
|
37,237
|
2,800
|
Q1 2023
|
TC until Mar-26
|
$48,000
|
|
TERATAKI (*)
|
Feeder
|
37,237
|
2,800
|
Q2 2023
|
TC until June-26
|
$48,000
|
|
TENDER SOUL
|
Feeder
|
37,237
|
2,800
|
Q4 2023
|
||
|
LEONIDAS Z
|
Feeder
|
37,237
|
2,800
|
Q1 2024
|
||
|
MONICA
|
Feeder
|
22,262
|
1,800
|
Q1 2024
|
||
|
STEPHANIA K
|
Feeder
|
22,262
|
1,800
|
Q2 2024
|
||
|
PEPI STAR
|
Feeder
|
22,262
|
1,800
|
Q2 2024
|
||
|
DEAR PANEL
|
Feeder
|
37,237
|
2,800
|
Q4 2024
|
||
|
SYMEON P
|
Feeder
|
37,237
|
2,800
|
Q4 2024
|
||
|
Total Vessels under construction
|
9
|
290,208
|
22,200
|
|
Notes:
| (*)(+) |
TC denotes time charter. Charter duration indicates the earliest redelivery date; all dates listed are the earliest redelivery dates under each TC unless the contract rate is lower than the current market rate in which cases the latest
redelivery date is assumed; vessels with the latest redelivery date shown are marked by (+).
|
| (**) |
The Company has agreed to sell M/V Akinada Bridge at a gross price of $14.2 million. The vessel is expected to be delivered to its buyers
in the beginning of January 2023.
|
|
(***)
|
The CONTEX (Container Ship Time Charter Assessment Index) has been published by the Hamburg and Bremen Shipbrokers' Association (VHBS) since October 2007. The CONTEX is a company-independent index of time charter rates for containerships.
It is based on assessments of the current day charter rates of six selected containership types, which are representative of their size categories: Type 1,100 TEU and Type 1,700 TEU with a charter period of one year, and the Types 2,500,
2,700, 3,500 and 4,250 TEU all with a charter period of two years.
|
| (****) |
Rate is net of commissions (which are typically 5-6.25%).
|
We plan to expand our fleet by investing in vessels in the containership market under favorable market conditions. We also intend to take advantage of the cyclical nature of the market by buying and
selling ships when we believe favorable opportunities exist. We employ our vessels, typically, in time charter contracts of various durations.
2
Management of Our Fleet
The operations of our vessels are managed by Eurobulk Ltd., or Eurobulk, an affiliated company. Eurobulk manages our fleet under a Master Management Agreement with us and
separate management agreements with each ship-owning company. Eurobulk was founded in 1994 by members of the Pittas family and is a reputable ship management company with strong industry relationships and experience in managing vessels. Under our
Master Management Agreement, Eurobulk is responsible for providing us with: (i) executive services associated with us being a public company; (ii) other services to our subsidiaries and commercial management services, which include obtaining
employment for our vessels and managing our relationships with charterers; and (iii) technical management services, which include managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification
society compliance, supervising the maintenance and general efficiency of vessels, arranging our hire of qualified officers and crew, arranging and supervising drydocking and repairs, arranging insurance for vessels, purchasing stores, supplies,
spares and new equipment for vessels, appointing supervisors and technical consultants and providing technical support and shoreside personnel who carry out the management functions described above and certain accounting services.
Our Master Management Agreement with Eurobulk compensates Eurobulk with an annual fee and a daily management fee per vessel managed. Our Master Management Agreement, which we
initially entered into in 2008, was amended and restated as of January 1, 2018 and its term was extended until January 1, 2023. The Master Management Agreement can be terminated by Eurobulk only for cause or under other limited circumstances, such
as sale of the Company or Eurobulk or the bankruptcy of either party. The Master Management Agreement will automatically be extended after the initial period for an additional five-year period unless terminated on or before the 90th day preceding the
initial termination date. Pursuant to the Master Management Agreement, vessels we might acquire in the future will enter into a separate management agreement with Eurobulk with a term and rate as specified in the
Master Management Agreement.
Under the amended and restated Master Management Agreement, as of January 1, 2018, in exchange for providing us with the services described above, we paid Eurobulk an annual fee
of $2,000,000 annually and a management fee of 685 Euros per vessel per day for any operating vessel and 50% (i.e., 342.5 Euros) of that amount for any vessel laid-up. As of January 1, 2022, the daily management fee increased to 720 Euros per vessel
per day (and 360 Euros per vessel per day for laid-up vessels) to reflect inflation in Greece during 2021; it had remained unchanged at 685 Euros in 2018, 2019, 2020 and 2021; the daily management fee is to be adjusted annually for inflation in
Greece every January 1st. In the case of newbuilding vessel contracts, the same management fee of 720 Euros becomes effective when construction of the vessels actually begins. On May 30, 2018, the Company signed an addendum with Eurobulk
according to which effective May 30, 2018, the fixed cost was adjusted from $2,000,000 to $1,250,000 as a result of the Spin-off. On November 15, 2019, the Company signed an addendum adjusting the fixed annual cost to $2,000,000 to compensate
Eurobulk Ltd. for the increase in the fleet and certain management services provided by Synergy Marine Ltd., a company controlled by Andreas Papathomas and which became affiliated with the Company post-acquisition, as a result of his appointment to
the Board of Directors of the Company in November 2019. There was no adjustment for inflation to the annual fee to date and, hence, we continue to pay an annual fee of $2,000,000.
Our Competitive Strengths
We believe that we possess the following competitive strengths:
|
•
|
Experienced Management Team. Our management team has significant experience in all aspects of commercial, technical, operational and financial
areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He
has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean
Systems Management also from the Massachusetts Institute of Technology and has over 30 years of experience in investment and risk management in the maritime industry. He was a partner in a Boston-based international maritime consulting firm
since 1989 prior to joining our company.
|
|
•
|
Cost Efficient Vessel Operations. We believe that because of the efficiencies afforded to us through Eurobulk, the strength of our management team
and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Despite the average age of our fleet being approximately 17
years on December 22, 2022, our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $7,212 per day for the year ended December 31, 2021. We consider this
amount to be among the lowest of the publicly listed containerships shipping companies in the United States. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade
route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and onboard crews further help us to control costs and ensure consistent vessel operating
performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2021 our operational fleet utilization was 98.5%,
up from 98.0% in the same period of 2020, while our commercial utilization rate increased from 97.5% in 2020 to 100% in 2021. Our total fleet utilization rate in 2021 was 98.5% compared to 95.5% in 2020.
|
3
|
•
|
Strong Relationships with Customers and Financial Institutions. We believe that we, Eurobulk and the Pittas family have developed strong industry relationships and
gained acceptance with charterers, lenders and insurers because of long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk, we offer reliable service and cargo
carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk and the Pittas family help us to secure favorable employment
for our vessels with well-known charterers.
|
Our Business Strategy
Our business strategy is focused on providing consistent shareholder returns by carefully timing and structuring acquisitions of containerships and by reliably, safely and competitively operating our
vessels through Eurobulk. We continuously evaluate purchase and sale opportunities, as well as long term employment opportunities for our vessels. Key elements of the above strategy are:
|
•
|
Renew and Expand our Fleet. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We
perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market opportunities present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or
newbuilding resales based on the evaluation of each investment option at the time it is made. On May 30, 2018, we spun-off our drybulk fleet into EuroDry. As a result of the spin-off, we became a pure containership company. Since August
2019, we acquired twelve secondhand vessels and sold five vessels resulting in a fleet of eighteen vessels as of December 22, 2022. In 2021 and 2022, we placed orders for the construction of nine vessels, three with a carrying capacity of
1,800 teu and six with capacity of 2,800 teu, all Eco design fuel efficient containerships which are scheduled to be delivered during 2023 and 2024.
|
|
•
|
Maintain Balanced Employment. We intend to employ our fleet on either longer term time charters, i.e. charters with duration of more than a year,
or shorter-term time charters. We seek longer term time/spot charter employment to obtain adequate cash flow to cover as much as possible of our fleet’s recurring costs, consisting of vessel operating expenses, management fees, general and
administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. When we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take
advantage of higher rates in the future), while when we expect the market to weaken or when the market is near historically high levels we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take
advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the
spot charter market during periods of rising charter rates. As of December 22, 2022, on the basis of our existing time charters, 100% of our vessel capacity for the remainder of 2022 and approximately 78% in 2023 and approximately 55% in
2024 are under time charter contracts, which will ensure employment of a portion of our fleet, partly protect us from market fluctuations and increase our ability to make principal and interest payments on our debt and pay dividends to our
shareholders.
|
|
•
|
Optimize Use of Financial Leverage. We intend to use bank debt to partly fund our vessel acquisitions and increase financial returns for our
shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our bank debt
repayment schedule as of September 30, 2022 calls for a reduction of approximately 7% of our debt during the fourth quarter of 2022 and an additional reduction of about 48% during 2023, excluding any new debt that we assumed or may assume.
During the third quarter of 2022, we increased our debt by $19.25 million to finance two of our vessels acquired without debt financing. As our debt is being repaid we expect that our ability to raise or borrow additional funds more cheaply
in order to grow our fleet and generate better returns for our shareholders will increase. We plan to finance approximately 55-65% of the cost of our newbuilding program with new debt.
|
|
•
|
Environmental, Social and Governance (ESG) Practices. We actively manage a broad range of ESG initiatives, taking into consideration their
expected impact on the sustainability of our business over time, and the potential impact of our business on society and the environment. Regarding environmental initiatives, in 2022 we are implementing technical and operational measures
that we expect will result in energy savings and a reduced carbon footprint for our vessels. Moreover, we pay considerable attention to our human resources both on our vessels and ashore, proven by a variety of practices, including
worldwide training on safety and management systems, and medical insurance for all employees. Our current ESG report can be found on our website.
|
4
Corporate Information
Euroseas Ltd. is a holding company existing under the laws of the Marshall Islands. We maintain our principal executive offices at 4 Messogiou & Evropis Street, 151 24 Maroussi, Greece. Our
telephone number at that address is +30-211-1804005. Our website address is http://www.euroseas.gr. The information on our website is not a part of this prospectus.
Recent Developments
From June 2022 until December 22, 2022, the Company repurchased and cancelled 238,335 common shares, under its share repurchase program for an aggregate consideration of
approximately $5.0 million.
On November 14, 2022, the Board of Directors declared a cash dividend of $0.50 per Euroseas Ltd. common share paid on December 16, 2022 to shareholders of record on December 9,
2022.
On December 29, 2022, the Company announced that it agreed to sell M/V Akinada Bridge at a gross price of $14.2 million. The vessel is expected to be delivered to its buyers in the beginning of January 2023. The
estimated gain on the sale of the vessel is $5.3 million.
The Securities We May Offer
We may use this prospectus to offer, through one or more offerings, up to $400,000,000 of our common shares (including related preferred stock purchase rights), preferred shares,
debt securities, warrants and units. We may also offer securities of the types listed above that are convertible or exchangeable into one or more of the securities listed above. A prospectus supplement will describe the specific types, amounts,
prices, and detailed terms of any of these offered securities and may describe certain risks in addition to those set forth below associated with an investment in the securities. Terms used in the prospectus supplement will have the meanings
described in this prospectus, unless otherwise specified.
5
RISK FACTORS
An investment in our securities involves a high degree of risk. You should carefully consider the risks discussed under the heading "Item 3. Key Information—D. Risk Factors" in our Annual Report on
Form 20-F for the year ended December 31, 2021 and the other documents we have incorporated by reference in this prospectus that summarize the risks that may materially affect our business before making an investment in our securities. Please see
"Where You Can Find Additional Information – Information Incorporated by Reference." In addition, you should also consider carefully the risks set forth under the heading "Risk Factors" in any prospectus supplement before investing in any securities
offered by this prospectus. The occurrence of one or more of those risk factors could adversely impact our business, financial condition, results of operations, the price of our common stock or our ability to pay dividends.
6
USE OF PROCEEDS
Unless we specify otherwise in any prospectus supplement, we intend to use the net proceeds from the sale of securities that we may offer by this prospectus to make vessel acquisitions and for
capital expenditures, repayment of indebtedness, working capital, and general corporate purposes.
7
OUR CAPITALIZATION
A prospectus supplement will include information on the Company’s consolidated capitalization.
8
DIVIDEND POLICY
A description of our dividend policy can be found in Item 8.A "Financial Information – Consolidated Statements and Other Financial Information – Dividend Policy" of our Annual
Report on Form 20-F for the year ended December 31, 2021, incorporated by reference in this prospectus. On May 23, 2022, we announced the reinstatement of the Company’s common stock dividend plan, declaring a quarterly dividend of $0.50 per share for
the first quarter of 2022 paid on June 15, 2022 to shareholders of record as of June 9, 2022. On August 10, 2022, we announced the declaration of another quarterly dividend of $0.50 per share for the second quarter of 2022 paid on September 16, 2022
to shareholders of record as of September 9, 2022. On November 14, 2022, we announced the declaration of another quarterly dividend of $0.50 per share for the third quarter of 2022, paid on December 16, 2022 to shareholders of record as of December
9, 2022.
9
PLAN OF DISTRIBUTION
We may sell or distribute the securities included in this prospectus through underwriters, through agents, to dealers, in private transactions, at market prices prevailing at the time of sale, at
prices related to market prices, at a fixed price or prices subject to change, at varying prices determined at the time of sale (which may be above or below market prices prevailing at the time of sale) or at negotiated prices.
In addition, we may sell some or all of our securities included in this prospectus through:
|
o
|
a block trade in which a broker-dealer may resell a portion of the block, as principal, in order to facilitate the transaction;
|
|
o
|
purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
|
|
o
|
ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
|
|
o
|
trading plans entered into by us pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus
supplement hereto that provide for periodic sales of our securities on the basis of parameters described in such trading plans.
|
In addition, we may enter into options or other types of transactions that require us to deliver our securities to a broker-dealer, who will then resell or transfer the securities under this
prospectus. We may enter into hedging transactions with respect to our securities. For example, we may:
|
o
|
enter into transactions involving short sales of our common shares by broker-dealers;
|
|
o
|
sell common shares short and deliver the shares to close out short positions;
|
|
o
|
enter into options or other types of transactions that require us to deliver common shares to a broker-dealer, who will then resell or transfer the common shares under this prospectus; or
|
|
o
|
loan or pledge the common shares to a broker-dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares
|
We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities
pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The
third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge
securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in
connection with a concurrent offering of other securities.
Any broker-dealers or other persons acting on our behalf that participate with us in the distribution of the securities may be deemed to be underwriters and any commissions received or profit
realized by them on the resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended, or the Securities Act. As of the date of this prospectus, we are not a party to any agreement,
arrangement or understanding between any broker or dealer and us with respect to the offer or sale of the securities pursuant to this prospectus.
At the time that any particular offering of securities is made, to the extent required by the Securities Act, a prospectus supplement will be distributed, setting forth the terms of the offering,
including the aggregate number of securities being offered, the purchase price of the securities, the initial offering price of the securities, the names of any underwriters, dealers or agents, any discounts, commissions and other items constituting
compensation from us and any discounts, commissions or concessions allowed or reallowed or paid to dealers. Furthermore, we, our executive officers, our directors and major shareholders may agree, subject to certain exemptions, that for a certain
period from the date of the prospectus supplement under which the securities are offered, we and they will not, without the prior written consent of an underwriter, offer, sell, contract to sell, pledge or otherwise dispose of any of our common
shares or any securities convertible into or exchangeable for common shares. However, an underwriter, in its sole discretion, may release any of the securities subject to these lock-up agreements at any time without notice. We expect an underwriter
to exclude from these lock-up agreements securities exercised and/or sold pursuant to trading plans entered into by us pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any
applicable prospectus supplement hereto that provide for periodic sales of our securities on the basis of parameters described in such trading plans.
10
Underwriters or agents could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an at-the-market offering as defined in Rule 415
promulgated under the Securities Act, which includes sales made directly on or through the Nasdaq Capital Market, the existing trading market for our shares of common stock, or sales made to or through a market maker other than on an exchange.
At the time that any particular offering of common shares is made, to the extent required by the Securities Act, a prospectus or prospectus supplement or, if appropriate, a post-effective amendment,
will be distributed, setting forth the terms of the offering, including the aggregate number of common shares being offered, the purchase price of the common shares, the public offering price of the common shares, the names of any underwriters,
dealers or agents and any applicable discounts or commission.
In order to comply with the securities laws of some states, if applicable, our common shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition,
in some states our common shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
Underwriters or agents could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an at-the-market offering as defined in Rule 415
promulgated under the Securities Act, which includes sales made directly on or through the Nasdaq Capital Market, the existing trading market for our common shares, or sales made to or through a market maker other than on an exchange.
We will bear the costs relating to the securities offered and sold by us under this registration statement.
11
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the capital stock offered
under this prospectus. For the complete terms of our capital stock, please refer to our amended and restated articles of incorporation that are filed as an exhibit to our Annual Report on Form 20-F for the year ended December 31, 2010 filed on May
27, 2011, which are incorporated by reference herein; the articles of amendment to our amended and restated articles of incorporation that are filed as an exhibit to our Report on Form 6-K filed on January 9, 2020, which are incorporated by reference
herein; our bylaws, as amended, that are filed as exhibits to our Annual Report on Form 20-F for the year ended December 31, 2009 filed on May 28, 2010, which are incorporated by reference herein; and the Amended and Restated Statement of Designation
for the Series B Convertible Perpetual Preferred Shares, filed as an exhibit to our Report on Form 6-K filed on February 1, 2021 and incorporated by reference herein; and the Statement of Designation for the Series C Participating Preferred Stock,
filed as an exhibit to our Report on Form 6-K filed on May 28, 2019 and incorporated by reference herein. The Marshall Islands Business Corporations Act, or BCA, may also affect the terms of these securities.
Authorized Capitalization
Common Shares
As of the date of this prospectus, we are authorized to issue up to 200,000,000 shares of common stock, par value $0.03 per share, of which there are 7,116,206 shares issued and outstanding. Each
outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders. Holders of our common stock (i) have equal ratable rights to dividends
from funds legally available therefore, if declared by the Board of Directors; (ii) are entitled to share ratably in all of our assets available for distribution upon liquidation, dissolution or winding up; and (iii) do not have preemptive,
subscription or conversion rights or redemption or sinking fund provisions. All issued shares of our common stock when issued will be fully paid for and non-assessable.
Preferred Shares
As of the date of this prospectus, we are authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share, of which there are currently no shares issued and outstanding. The
preferred stock may be issued in one or more series and our Board of Directors, without further approval from our shareholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation
preferences and other rights and restrictions relating to any series. Issuances of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of our common stock.
For a full description of the terms of our Series B Preferred Shares, please see the Amended and Restated Statement of Designation for the Series B Preferred Shares, filed as an exhibit to our Report
on Form 6-K filed on February 1, 2021.
Share History
All share numbers shown below reflect the 1-for-8 reverse stock split of December 19, 2019.
On August 2, 2019, we issued 687,500 common shares to Containers Trinity Shareholders Ltd as partial consideration for the m/v EM Hydra; and 246,479 common shares to Diamantis Shareholders Ltd as
partial consideration for the m/v Diamantis P.
On August 7, 2019, we issued 1,882,922 common shares to Containers Trinity Shareholders Ltd as partial consideration for the m/v EM Spetses and m/v EM Kea.
During October 2019, we issued and sold 144,727 common shares for net proceeds of approximately $0.9 million through an at-the-market offering under the equity distribution agreement with Maxim Group
LLC on October 30, 2018 to sell up to $10 million of our common shares through an at-the-market offering.
On November 4, 2019, our board of directors awarded 15,444 common shares to our directors, officers and key employees of Eurobulk, half of which vested on July 1, 2020 and the remainder of which
vested on July 1, 2021.
On November 8, 2019, we issued and sold 528,169 common shares to Synergy Holdings Ltd for net proceeds of $3.0 million through a private placement.
On November 22, 2019, we issued and sold 528,169 common shares to Eurobulk Marine Holdings Inc. for net proceeds of $3.0 million through a private placement.
On August 3, 2020, we issued and sold 200,000 shares of common stock under our at-the-market offering for net proceeds of approximately $0.7 million.
On November 5, 2020, our board of directors awarded 45,900 common shares to our directors, officers and key employees of Eurobulk, half of which vested on November 16, 2021 and the remainder of which
vested on November 16, 2022.
12
On November 16, 2020, the Company issued 161,357 shares to Synergy Holdings Ltd. as a result of a contingent payment agreed upon on November 7, 2019 as part of the agreement for the acquisition of
the vessels M/V "Synergy Busan", M/V "Synergy Keelung", M/V "Synergy Oakland" and M/V "Synergy Antwerp".
On November 24, 2020, the Company received notice from Colby Trading Ltd (“Colby”), which had provided the Company with a loan of $2.5 million in September 2019, whereby Colby
exercised its right to convert the outstanding balance of the loan of $1.875 million into common shares of the Company as per the terms of the loan. As a result, the Company issued 702,247 common shares to Colby.
On January 29, 2021, we sold 74,301 shares of common stock under our at-the-market offering for approximately $0.65 million of net proceeds.
On February 12, 2021, we sold 8,600 shares of common stock under our at-the-market offering for approximately $0.09 million net proceeds.
On June 30, 2021, the Company converted the 6,365 Series B preferred shares into common stock by issuing 453,044 shares covering the full redemption of the remaining Preferred
Shares for a total amount of $6,365,059.
On November 19, 2021, our board of directors awarded 49,650 common shares to our directors, officers and key employees of Eurobulk, half of which vested on July 1, 2022 and the remainder of which
will vest on July 1, 2023.
On November 3, 2022, our board of directors awarded 60,000 common shares to our directors, officers and key employees of Eurobulk, half of which will vest on November 16, 2023 and the remainder of
which will vest on November 15, 2024.
As of December 22, 2022, we had repurchased 238,335 shares of our common stock in the open market for approximately $5.0 million under our share repurchase plan of up to $20 million.
Share Repurchase Program
On May 23, 2022, our Board of Directors approved a share repurchase program (the “Program”) to purchase up to an aggregate of $20.0 million of our common shares. The Board will review the Program
after a period of twelve months. Share repurchases will be made from time to time for cash in open market transactions pursuant to Rule 10b-18 of the Exchange Act at prevailing market prices and/or in privately negotiated transactions. The timing and
amount of purchase under the Program will be determined by management based upon market conditions and other factors. The Program does not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at
any time at the Company’s discretion and without notice. We will cancel common shares repurchased as part of the Program. As of December 22, 2022, we have repurchased the following common shares:
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share (1)
|
Total Number of Shares Purchased as part of Publicly Announced Plans or Programs
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||||||||
|
June 27-December 22, 2022
|
238,335
|
$
|
21.1276
|
238,335
|
$
|
14,964,553
|
||||||||||
|
Total
|
225,360
|
N/A
|
N/A
|
|||||||||||||
|
(1)
|
The average price paid per share does not include commissions paid for each transaction.
|
The repurchased shares were cancelled and removed from the Company’s share capital as of December 22, 2022.
Directors
Our directors are elected by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election. Cumulative voting may not
be used to elect directors.
Our Board of Directors must consist of at least three directors, such number to be determined by the Board of Directors by a majority vote of the entire Board of Directors from
time to time. Shareholders may change the number of our directors only by an affirmative vote of the holders of the majority of the outstanding shares of capital stock entitled to vote generally in the election of directors.
13
Our Board of Directors is divided into three classes as set out below in “Classified Board of Directors.” Each director is elected to serve until the third succeeding annual
meeting after his election and until his successor shall have been elected and qualified, except in the event of his death, resignation or removal.
Shareholder Meetings
Under our bylaws, as amended, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the
Marshall Islands. Special meetings may be called at any time by the Board of Directors, the Chairman of the Board or by the President. Notice of every annual and special meeting of shareholders must be given to each shareholder of record entitled to
vote at least 15 but no more than 60 days before such meeting.
Dissenters' Rights of Appraisal and Payment
Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or consolidation or sale of all or substantially all of our assets
not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any further amendment of our amended and restated articles of incorporation, a shareholder also has the right to dissent and receive
payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail
to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which the Company’s shares
are primarily traded on a local or national securities exchange.
Shareholders Derivative Actions
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a
holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
Limitations on Liability and Indemnification of Officers and Directors
The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their shareholders for monetary damages for breaches of
directors’ fiduciary duties. Our bylaws, as amended, include a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent permitted by law.
Our bylaws, as amended, provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly authorized to carry directors’ and
officers’ insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive
officers.
The limitation of liability and indemnification provisions in our bylaws, as amended, may discourage shareholders from bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition,
your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.
Purpose
Our purpose, as stated in our amended and restated articles of incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA.
Anti-takeover Effect of Certain Provisions of our Amended and Restated Articles of Incorporation and Bylaws, as Amended
Several provisions of our amended and restated articles of incorporation and bylaws, as amended, which are summarized below, may have anti-takeover effects. These provisions are
intended to avoid costly takeover battles, lessen our vulnerability to a hostile change in control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these
anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest
and (2) the removal of incumbent officers and directors.
Blank Check Preferred Stock
Under the terms of our amended and restated articles of incorporation, our Board of Directors has authority, without any further vote or action by our shareholders, to issue up
to 20,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change in control of our company or the removal of our management.
14
Classified Board of Directors
Our amended and restated articles of incorporation provide for the division of our Board of Directors into three classes of directors, with each class as nearly equal in number as possible, serving
staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of us.
It could also delay shareholders who do not agree with the policies of our Board of Directors from removing a majority of our Board of Directors for two years.
Election and Removal of Directors
Our amended and restated articles of incorporation prohibit cumulative voting in the election of directors. Our bylaws, as amended, require parties other than the Board of Directors to give advance
written notice of nominations for the election of directors. Our bylaws, as amended, also provide that our directors may be removed only for cause and by either action of the Board of Directors or the affirmative vote of the holders of 51% of the
issued and outstanding voting shares of the Corporation. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
Limited Actions by Shareholders
Our amended and restated articles of incorporation and our bylaws, as amended, provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special
meeting of shareholders or by the unanimous written consent of our shareholders. Our amended and restated articles of incorporation and our bylaws, as amended, provide that, subject to certain exceptions, a special meeting of shareholders may be
called only by our Board of Directors, our Chairman of the Board or by the President and the business transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, a shareholder may not call a special meeting and
shareholder consideration of a proposal may be delayed until the next annual meeting.
Advance Notice Requirements for Shareholder Proposals and Director Nominations
Our bylaws, as amended, provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of
their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one-year anniversary of the
immediately preceding annual meeting of shareholders. Our bylaws, as amended, also specify requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting
of shareholders or make nominations for directors at an annual meeting of shareholders.
Certain Business Combinations
Our amended and restated articles of incorporation also prohibit us, subject to several exclusions, from engaging in any “business combination” with any interested shareholder for a period of three
years following the date the shareholder became an interested shareholder.
Shareholders' Rights Plan
On May 10, 2019, we adopted a shareholder rights agreement effective as of May 27, 2019 (the “Rights Plan”) and declared a dividend distribution of one preferred stock purchase right to purchase one
one-thousandth of our Series C Participating Preferred Stock for each outstanding share of our common stock, to shareholders of record at the close of business on May 27, 2019. Each right entitles the registered holder, upon the occurrence of certain
events, to purchase from us one one-thousandth of a share of Series C Participating Preferred Stock at an exercise price of $3.00, subject to adjustment. The rights will expire on the earliest of (i) May 31, 2029 or (ii) redemption or exchange of the
rights. The Rights Plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with or takeover of the Company. We believe that the Rights Plan should enhance the board
of directors' negotiating power on behalf of shareholders in the event of a coercive offer or proposal. We are not currently aware of any such offers or proposals and we adopted the plan as a matter of prudent corporate governance. This shareholder
rights agreement replaced our existing, substantially similar shareholder rights agreement which expired on May 27, 2019.
Transfer Agent
The registrar and transfer agent for our common shares is American Stock Transfer & Trust Company, LLC.
Listing
Our common shares are listed on the Nasdaq Capital Market under the symbol "ESEA."
15
DESCRIPTION OF PREFERRED SHARES
Under the terms of our amended and restated articles of incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue up to 20,000,000 shares
of blank check preferred stock. As of the date of this prospectus, we have no preferred shares outstanding. Our board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our
company or the removal of our management. Our board of directors is authorized to provide for the issuance of preferred shares in one or more series with designations as may be stated in the resolution or resolutions providing for the issue of such
preferred shares. At the time that any series of our preferred shares are authorized, our board of directors will fix the dividend rights, any conversion rights, any voting rights, redemption provisions, liquidation preferences and any other rights,
preferences, privileges and restrictions of that series, as well as the number of shares constituting that series and their designation. Our board of directors could, without shareholder approval, cause us to issue preferred stock which has voting,
conversion and other rights that could adversely affect the holders of our common shares or make it more difficult to effect a change in control. Our preferred shares could be used to dilute the share ownership of persons seeking to obtain control
of us and thereby hinder a possible takeover attempt which, if our shareholders were offered a premium over the market value of their shares, might be viewed as being beneficial to our shareholders. In addition, our preferred shares could be issued
with voting, conversion and other rights and preferences which would adversely affect the voting power and other rights of holders of our common shares. The material terms of any series of preferred shares that we offer through a prospectus
supplement will be described in that prospectus supplement.
16
DESCRIPTION OF WARRANTS
We may issue warrants to purchase any of our debt or equity securities or securities of third parties or other rights, including rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing. Warrants may be issued independently or together with any other securities and may be attached to, or separate from, such
securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent and will not assume any obligation or relationship of agency for
or with holders or beneficial owners of warrants. The terms of any warrants to be issued and a description of the material provisions of the applicable warrant agreement will be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the following terms of any warrants in respect of which this prospectus is being delivered:
| • |
the title of such warrants;
|
| • |
the aggregate number of such warrants;
|
| • |
the price or prices at which such warrants will be issued;
|
| • |
the currency or currencies, including composite currencies, in which the price of such warrants may be payable;
|
| • |
the securities or other rights, including rights to receive payment in cash or securities based on the value, rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing,
purchasable upon exercise of such warrants;
|
| • |
the price at which and the currency or currencies, in which the securities or other rights purchasable upon exercise of such warrants may be purchased;
|
| • |
the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
|
| • |
if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;
|
| • |
if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;
|
| • |
if applicable, the date on and after which such warrants and the related securities will be separately transferable;
|
| • |
information with respect to book-entry procedures, if any;
|
| • |
if applicable, a discussion of any material United States federal income tax considerations; and
|
| • |
any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.
|
17
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities from time to time in one or more series, under one or more indentures, each dated as of a date on or prior to the issuance of the debt securities to which it relates. We
may issue senior debt securities and subordinated debt securities pursuant to separate indentures, a senior indenture and a subordinated indenture, respectively, in each case between us and the trustee named in the indenture. These indentures will
be filed either as exhibits to an amendment to this Registration Statement, or as an exhibit to an Exchange Act report that will be incorporated by reference to the Registration Statement or a prospectus supplement. We will refer to any or all of
these reports as "subsequent filings". The senior indenture and the subordinated indenture, as amended or supplemented from time to time, are sometimes referred to individually as an "indenture" and collectively as the "indentures". Unless
otherwise permitted by applicable law, each indenture will be subject to and governed by the Trust Indenture Act. The aggregate principal amount of debt securities which may be issued under each indenture may be unlimited and each indenture will
contain the specific terms of any series of debt securities or provide that those terms must be set forth in or determined pursuant to, an authorizing resolution, as defined in the applicable prospectus supplement, and/or a supplemental indenture, if
any, relating to such series.
The debt securities may or may not be secured by liens, mortgages, and security interests in the assets of those subsidiaries. A description of any such liens, mortgages or security interests, will
be set forth in the prospectus supplement that will accompany this prospectus.
The following description of the terms of the debt securities sets forth certain general terms and provisions. The statements below are not complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the applicable indenture. The specific terms of any debt securities that we may offer, including any modifications of, or additions to, the general terms described below as well as any applicable
material U.S. federal income tax considerations concerning the ownership of such debt securities will be described in the applicable prospectus supplement or supplemental indenture. Accordingly, for a complete description of the terms of a
particular issue of debt securities, the general description of the debt securities set forth below should be read in conjunction with the applicable prospectus supplement and indenture, as amended or supplemented from time to time.
General
Unless otherwise indicated in subsequent filings with the Commission, no indenture will limit the amount of debt securities which may be issued, and each indenture will provide that debt securities
may be issued up to the aggregate principal amount from time to time. The debt securities may be issued in one or more series. The senior debt securities may be secured or unsecured and, if unsecured, will rank in parity with all of our other
unsecured and unsubordinated indebtedness. Each series of subordinated debt securities will be unsecured and subordinated to all present and future senior indebtedness of debt securities as described in an accompanying prospectus supplement.
You should read the subsequent filings relating to the particular series of debt securities for the following terms of the offered debt securities:
| • |
the designation, aggregate principal amount and authorized denominations;
|
| • |
the issue price, expressed as a percentage of the aggregate principal amount;
|
| • |
the maturity date;
|
| • |
the interest rate per annum, if any;
|
| • |
if the offered debt securities provide for interest payments, the date from which interest will accrue, the dates on which interest will be payable, the date on which payment of interest will commence and the regular record dates for
interest payment dates;
|
| • |
any optional or mandatory sinking fund provisions or conversion or exchangeability provisions;
|
| • |
the date, if any, after which and the price or prices at which the offered debt securities may be optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory redemptions;
|
| • |
whether the debt securities are convertible and the terms of such conversion;
|
| • |
if other than denominations of $1,000 and any integral multiple thereof, the denominations in which offered debt securities of the series will be issuable;
|
| • |
if other than the full principal amount, the portion of the principal amount of offered debt securities of the series which will be payable upon acceleration or provable in bankruptcy;
|
| • |
any events of default not set forth in this prospectus;
|
| • |
the currency or currencies, including composite currencies, in which principal, premium and interest will be payable, if other than the currency of the United States;
|
18
| • |
if principal, premium or interest is payable, at our election or at the election of any holder, in a currency other than that in which the offered debt securities of the series are stated to be payable, the period or periods within which,
and the terms and conditions upon which, the election may be made;
|
| • |
whether interest will be payable in cash or additional securities at our or the holder's option and the terms and conditions upon which the election may be made;
|
| • |
if denominated in a currency or currencies other than the currency of the United States, the equivalent price in the currency of the United States for purposes of determining the voting rights of holders of those debt securities under the
applicable indenture;
|
| • |
if the amount of payments of principal, premium or interest may be determined with reference to an index, formula or other method based on a coin or currency other than that in which the offered debt securities of the series are stated to
be payable, the manner in which the amounts will be determined;
|
| • |
any restrictive covenants or other material terms relating to the offered debt securities, which may not be inconsistent with the applicable indenture;
|
| • |
whether the offered debt securities will be issued in the form of global securities or certificates in registered form;
|
| • |
any terms with respect to subordination;
|
| • |
any listing on any securities exchange or quotation system; and
|
| • |
additional provisions, if any, related to defeasance and discharge of the offered debt securities.
|
Unless otherwise indicated in subsequent filings with the Commission relating to the indenture, principal, premium and interest will be payable and the debt securities will be transferable at the
corporate trust office of the applicable trustee. Unless other arrangements are made or set forth in subsequent filings or a supplemental indenture, principal, premium and interest will be paid by checks mailed to the holders at their registered
addresses.
Unless otherwise indicated in subsequent filings with the Commission, the debt securities will be issued only in fully registered form without coupons, in denominations of $1,000 or any integral
multiple thereof. No service charge will be made for any transfer or exchange of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with these debt securities.
Some or all of the debt securities may be issued as discounted debt securities, bearing no interest or interest at a rate which at the time of issuance is below market rates, to be sold at a
substantial discount below the stated principal amount. United States federal income consequences and other special considerations applicable to any discounted securities will be described in subsequent filings with the Commission relating to those
securities.
We refer you to applicable subsequent filings with respect to any deletions or additions or modifications from the description contained in this prospectus.
Senior Debt
We may issue senior debt securities under a senior debt indenture. These senior debt securities may be secured or unsecured, and if unsecured, would rank on an equal basis with all our other
unsecured debt except subordinated debt. The senior debt securities may also be convertible.
Senior debt means:
| • |
the principal, premium, if any, interest and any other amounts owing in respect of our indebtedness for money borrowed and indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by us, including
the senior debt securities or letters of credit;
|
| • |
all capitalized lease obligations;
|
| • |
all hedging obligations;
|
| • |
all obligations representing the deferred purchase price of property; and
|
| • |
all deferrals, renewals, extensions and refundings of obligations of the type referred to above;
|
19
but senior debt does not include:
| • |
subordinated debt securities; and
|
| • |
any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, our subordinated debt securities.
|
Subordinated Debt
We may issue subordinated debt securities under a subordinated debt indenture. Subordinated debt would rank subordinate and junior in right of payment, to the extent set forth in the subordinated
debt indenture, to all our senior debt (both secured and unsecured). Subordinated debt may be secured or convertible.
In general, the holders of all senior debt are first entitled to receive payment of the full amount unpaid on senior debt before the holders of any of the subordinated debt securities are entitled to
receive a payment on account of the principal or interest on the indebtedness evidenced by the subordinated debt securities in certain events.
If we default in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, unless and until the
default is cured or waived or ceases to exist, we cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities.
If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to us or our property, then all senior debt must be paid in full before any payment may be made to any holders
of subordinated debt securities.
Furthermore, if we default in the payment of the principal of and accrued interest on any subordinated debt securities that is declared due and payable upon an event of default under the subordinated
debt indenture, holders of all our senior debt will first be entitled to receive payment in full in cash before holders of such subordinated debt can receive any payments.
Covenants
Any series of offered debt securities may have covenants in addition to or differing from those included in the applicable indenture which will be described in subsequent filings prepared in
connection with the offering of such securities, limiting or restricting, among other things:
| • |
the ability of us or our subsidiaries to incur either secured or unsecured debt, or both;
|
| • |
the ability to make certain payments, dividends, redemptions or repurchases;
|
| • |
our ability to create dividend and other payment restrictions affecting our subsidiaries;
|
| • |
our ability to make investments;
|
| • |
mergers and consolidations by us or our subsidiaries;
|
| • |
sales of assets by us;
|
| • |
our ability to enter into transactions with affiliates;
|
| • |
our ability to incur liens; and
|
| • |
sale and leaseback transactions.
|
Modification of the Indentures
Each indenture and the rights of the respective holders may be modified by us only with the consent of holders of not less than a majority in aggregate principal amount of the outstanding debt
securities of all series under the respective indenture affected by the modification, taken together as a class. But no modification that:
| • |
changes the amount of securities whose holders must consent to an amendment, supplement or waiver;
|
| • |
reduces the rate of or changes the interest payment time on any security or alters its redemption provisions (other than any alteration to any such section which would not materially adversely affect the legal rights of any holder under
the indenture) or the price at which we are required to offer to purchase the securities;
|
| • |
reduces the principal or changes the maturity of any security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;
|
| • |
waives a default or event of default in the payment of the principal of or interest, if any, on any security (except a rescission of acceleration of the securities of any series by the holders of at least a majority in principal amount of
the outstanding securities of that series and a waiver of the payment default that resulted from such acceleration);
|
20
| • |
makes the principal of or interest, if any, on any security payable in any currency other than that stated in the security;
|
| • |
makes any change with respect to holders' rights to receive principal and interest, the terms pursuant to which defaults can be waived, certain modifications affecting shareholders or certain currency-related issues; or
|
| • |
waives a redemption payment with respect to any security or change any of the provisions with respect to the redemption of any securities,
|
will be effective against any holder without his consent. Other terms as specified in subsequent filings may be modified without the consent of the holders.
Events of Default
Each indenture defines an event of default for the debt securities of any series as being any one of the following events:
| • |
default in any payment of interest when due which continues for 30 days;
|
| • |
default in any payment of principal or premium when due;
|
| • |
default in the deposit of any sinking fund payment when due;
|
| • |
default in the performance of any covenant in the debt securities or the applicable indenture which continues for 60 days after we receive notice of the default;
|
| • |
default under a bond, debenture, note or other evidence of indebtedness for borrowed money by us or our subsidiaries (to the extent we are directly responsible or liable therefor) having a principal amount in excess of a minimum amount set
forth in the applicable subsequent filing, whether such indebtedness now exists or is hereafter created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such acceleration having been rescinded or annulled or cured within 30 days after we receive notice of the default; and
|
| • |
events of bankruptcy, insolvency or reorganization.
|
An event of default of one series of debt securities does not necessarily constitute an event of default with respect to any other series of debt securities.
There may be such other or different events of default as described in an applicable subsequent filing with respect to any class or series of offered debt securities.
In case an event of default occurs and continues for the debt securities of any series, the applicable trustee or the holders of not less than 25% in aggregate principal amount of the debt securities
then outstanding of that series may declare the principal and accrued but unpaid interest of the debt securities of that series to be due and payable. Any event of default for the debt securities of any series which has been cured may be waived by
the holders of a majority in aggregate principal amount of the debt securities of that series then outstanding.
Each indenture requires us to file annually after debt securities are issued under that indenture with the applicable trustee a written statement signed by two of our officers as to the absence of
material defaults under the terms of that indenture. Each indenture provides that the applicable trustee may withhold notice to the holders of any default if it considers it in the interest of the holders to do so, except notice of a default in
payment of principal, premium or interest.
Subject to the duties of the trustee in case an event of default occurs and continues, each indenture provides that the trustee is under no obligation to exercise any of its rights or powers under
that indenture at the request, order or direction of holders unless the holders have offered to the trustee reasonable indemnity. Subject to these provisions for indemnification and the rights of the trustee, each indenture provides that the holders
of a majority in principal amount of the debt securities of any series then outstanding 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 as long as the exercise of that right does not conflict with any law or the indenture.
Defeasance and Discharge
The terms of each indenture provide us with the option to be discharged from any and all obligations in respect of the debt securities issued thereunder upon the deposit with the trustee, in trust,
of money or U.S. government obligations, or both, which through the payment of interest and principal in accordance with their terms will provide money in an amount sufficient to pay any installment of principal, premium and interest on, and any
mandatory sinking fund payments in respect of, the debt securities on the stated maturity of the payments in accordance with the terms of the debt securities and the indenture governing the debt securities. This right may only be exercised if, among
other things, we have received from, or there has been published by, the United States Internal Revenue Service a ruling to the effect that such a discharge will not be deemed, or result in, a taxable event with respect to holders. This discharge
would not apply to our obligations to register the transfer or exchange of debt securities, to replace stolen, lost or mutilated debt securities, to maintain paying agencies and hold moneys for payment in trust.
21
Defeasance of Certain Covenants
The terms of the debt securities provide us with the right to omit complying with specified covenants and that specified events of default described in a subsequent filing will not apply. In order to
exercise this right, we will be required to deposit with the trustee money or U.S. government obligations, or both, which through the payment of interest and principal will provide money in an amount sufficient to pay principal, premium, if any, and
interest on, and any mandatory sinking fund payments in respect of, the debt securities on the stated maturity of such payments in accordance with the terms of the debt securities and the indenture governing such debt securities. We will also be
required to deliver to the trustee an opinion of counsel to the effect that we have received from, or there has been published by, the IRS a ruling to the effect that the deposit and related covenant defeasance will not cause the holders of such
series to recognize income, gain or loss for United States federal income tax purposes.
A subsequent filing may further describe the provisions, if any, of any particular series of offered debt securities permitting a discharge defeasance.
Global Securities
The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depository identified in an applicable
subsequent filing and registered in the name of the depository or a nominee for the depository. In such a case, one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal
amount of outstanding debt securities of the series to be represented by the global security or securities. Unless and until it is exchanged in whole or in part for debt securities in definitive certificated form, a global security may not be
transferred except as a whole by the depository for the global security to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository or by the depository or any nominee to a successor
depository for that series or a nominee of the successor depository and except in the circumstances described in an applicable subsequent filing.
We expect that the following provisions will apply to depository arrangements for any portion of a series of debt securities to be represented by a global security. Any additional or different terms
of the depository arrangement will be described in an applicable subsequent filing.
Upon the issuance of any global security, and the deposit of that global security with or on behalf of the depository for the global security, the depository will credit, on its book-entry
registration and transfer system, the principal amounts of the debt securities represented by that global security to the accounts of institutions that have accounts with the depository or its nominee. The accounts to be credited will be designated
by the underwriters or agents engaging in the distribution of the debt securities or by us, if the debt securities are offered and sold directly by us. Ownership of beneficial interests in a global security will be limited to participating
institutions or persons that may hold interest through such participating institutions. Ownership of beneficial interests by participating institutions in the global security will be shown on, and the transfer of the beneficial interests will be
effected only through, records maintained by the depository for the global security or by its nominee. Ownership of beneficial interests in the global security by persons that hold through participating institutions will be shown on, and the
transfer of the beneficial interests within the participating institutions will be effected only through, records maintained by those participating institutions. The laws of some jurisdictions may require that purchasers of securities take physical
delivery of the securities in certificated form. The foregoing limitations and such laws may impair the ability to transfer beneficial interests in the global securities.
So long as the depository for a global security, or its nominee, is the registered owner of that global security, the depository or its nominee, as the case may be, will be considered the sole owner
or holder of the debt securities represented by the global security for all purposes under the applicable indenture. Unless otherwise specified in an applicable subsequent filing and except as specified below, owners of beneficial interests in the
global security will not be entitled to have debt securities of the series represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of the series in certificated
form and will not be considered the holders thereof for any purposes under the indenture. Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the depository and, if such person is not a
participating institution, on the procedures of the participating institution through which the person owns its interest, to exercise any rights of a holder under the indenture.
The depository may grant proxies and otherwise authorize participating institutions to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a
holder is entitled to give or take under the applicable indenture. We understand that, under existing industry practices, if we request any action of holders or any owner of a beneficial interest in the global security desires to give any notice or
take any action a holder is entitled to give or take under the applicable indenture, the depository would authorize the participating institutions to give the notice or take the action, and participating institutions would authorize beneficial owners
owning through such participating institutions to give the notice or take the action or would otherwise act upon the instructions of beneficial owners owning through them.
Unless otherwise specified in applicable subsequent filings, payments of principal, premium and interest on debt securities represented by a global security registered in the name of a depository or
its nominee will be made by us to the depository or its nominee, as the case may be, as the registered owner of the global security.
22
We expect that the depository for any debt securities represented by a global security, upon receipt of any payment of principal, premium or interest, will credit participating institutions' accounts
with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the records of the depository. We also expect that payments by participating institutions to owners of
beneficial interests in the global security held through those participating institutions will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in
street names, and will be the responsibility of those participating institutions. None of us, the trustees or any agent of ours or the trustees will have any responsibility or liability for any aspect of the records relating to or payments made on
account of beneficial interests in a global security, or for maintaining, supervising or reviewing any records relating to those beneficial interests.
Unless otherwise specified in the applicable subsequent filings, a global security of any series will be exchangeable for certificated debt securities of the same series only if:
| • |
the depository for such global securities notifies us that it is unwilling or unable to continue as depository or such depository ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor depository
is not appointed by us within 90 days after we receive the notice or become aware of the ineligibility;
|
| • |
we in our sole discretion determine that the global securities shall be exchangeable for certificated debt securities; or
|
| • |
there shall have occurred and be continuing an event of default under the applicable indenture with respect to the debt securities of that series.
|
Upon any exchange, owners of beneficial interests in the global security or securities will be entitled to physical delivery of individual debt securities in certificated form of like tenor and terms
equal in principal amount to their beneficial interests, and to have the debt securities in certificated form registered in the names of the beneficial owners, which names are expected to be provided by the depository's relevant participating
institutions to the applicable trustee.
In the event that the Depository Trust Company, or DTC, acts as depository for the global securities of any series, the global securities will be issued as fully registered securities registered in
the name of Cede & Co., DTC's partnership nominee.
23
DESCRIPTION OF UNITS
As specified in the applicable prospectus supplement, we may issue units consisting of one or more warrants, debt securities, preferred shares, common shares or any combination of such
securities. The applicable prospectus supplement will describe:
| • |
the terms of the units and of the warrants, debt securities, preferred shares and common shares comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;
|
| • |
a description of the terms of any unit agreement governing the units;
|
| • |
if applicable, a discussion of any material U.S. federal income tax considerations; and
|
| • |
a description of the provisions for the payment, settlement, transfer or exchange of the units.
|
24
TAX CONSIDERATIONS
The following is a discussion of the material Liberian, Marshall Islands and United States federal income tax considerations applicable to us and an investment decision by United States Holders and Non-United States
Holders, each as defined below, in our common stock. This summary does not purport to deal with all aspects of United States federal income taxation, Liberian taxation or Marshall Islands taxation that may be relevant to an investor's decision to
purchase common stock, nor any tax consequences arising under the laws of any state, locality or other foreign jurisdiction. This summary is not intended to be applicable to all categories of investors, such as dealers in securities, banks, thrifts
or other financial institutions, insurance companies, regulated investment companies, tax-exempt organizations, United States expatriates, persons that hold common stock as part of a straddle, persons who own 10% or more of our outstanding stock,
persons deemed to sell the common stock under the constructive sale provisions of the United States Internal Revenue Code of 1986, as amended, or the Code, United States Holders (as defined below) whose "functional currency" is other than the United
States dollar, partnerships or other pass-through entities, or persons who acquire or are deemed to have acquired the common stock in an exchange or for property other than cash, persons required to recognize income no later than when such income is
reported on an “applicable financial statement,” or holders subject to the “base erosion and anti-avoidance” tax or an alternative minimum tax, each of which may be subject to special rules. In addition, this discussion is limited to persons who
acquire common stock in an offering made under this prospectus and hold the common stock as "capital assets" (generally, property held for investment) within the meaning of Code Section 1221.
Marshall Islands Tax Considerations
In the opinion of Seward & Kissel LLP, the following are the material Marshall Islands tax consequences of our activities to us and holders of our common shares. We are incorporated in the
Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders.
Liberian Tax Considerations
In the opinion of Seward & Kissel LLP, the following are the material Liberian tax consequences of our activities to us and holders of our common shares. Certain of our subsidiaries are
incorporated in Liberia. Under current Liberian law, our Liberian subsidiaries are not subject to tax on income or capital gains, and no Liberian withholding tax will be imposed upon payments of dividends by our Liberian subsidiaries to us.
United States Federal Income Tax Considerations
In the opinion of Seward & Kissel LLP, the following are the material United States federal income tax consequences to us of our activities and to United States Holders and Non-United States
Holders, each as defined below, of the ownership of common shares. The following discussion of United States federal income tax matters is based on the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations
issued by the United States Department of the Treasury, or the Treasury Regulations, all of which are subject to change, possibly with retroactive effect. The discussion below is based, in part, on the description of our business herein and assumes
that we conduct our business as described herein. References in the following discussion to the "Company," "we," "our" and "us" are to Euroseas Ltd. and its subsidiaries on a consolidated basis.
United States Federal Income Taxation of Operating Income: In General
We earn and anticipate that we will continue to earn substantially all our income from the hiring or leasing of vessels for use on a time charter basis, from participation in a pool or from the
performance of services directly related to those uses, all of which we refer to as "shipping income."
Unless exempt from United States federal income taxation under the rules of Section 883 of the Code, or Section 883, as discussed below, a foreign corporation such as the Company will be subject to
United States federal income taxation on its "shipping income" that is treated as derived from sources within the United States, which we refer to as "United States source shipping income." For United States federal income tax purposes, "United
States source shipping income" includes 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States.
Shipping income attributable to transportation exclusively between non-United States ports will be considered to be 100% derived from sources entirely outside the United States. Shipping income
derived from sources outside the United States will not be subject to any United States federal income tax.
Shipping income attributable to transportation exclusively between United States ports is considered to be 100% derived from United States sources. However, we are not permitted by United States law
to engage in the transportation of cargoes that produces 100% United States source shipping income.
Unless exempt from tax under Section 883, our gross United States source shipping income would be subject to a 4% tax imposed without allowance for deductions, as described more fully below.
25
Exemption of Operating Income from United States Federal Income Taxation
Under Section 883 and the Treasury Regulations thereunder, a foreign corporation will be exempt from United States federal income taxation on its United States source shipping income if:
(1) it is organized in a "qualified foreign country," which is one that grants an
"equivalent exemption" from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883; and
(2) one of the following tests is met:
(A) more than 50% of the value of its shares is beneficially owned,
directly or indirectly, by "qualified shareholders," which as defined includes individuals who are "residents" of a qualified foreign country, which we refer to as the 50% Ownership Test; or
(B) its shares are "primarily and regularly traded on an established
securities market" in a qualified foreign country or in the United States, to which we refer as the Publicly-Traded Test.
Each of the Republic of the Marshall Islands, Liberia and Panama, the jurisdictions where we and our ship-owning subsidiaries are incorporated, has been officially recognized by the United States
Internal Revenue Service, or the IRS, as a qualified foreign country that grants the requisite "equivalent exemption" from tax in respect of each category of shipping income we earn and currently expect to earn in the future. Therefore, we will be
exempt from United States federal income taxation with respect to our United States source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.
We do not currently anticipate a circumstance under which we would be able to satisfy the 50% Ownership Test. Therefore, our ability to qualify for exemption under Section 883 is solely dependent
upon satisfaction of the Publicly-Traded Test as discussed below.
For the reasons discussed below, we believe that we satisfied the Publicly-Traded Test for the 2022 taxable year.
Publicly-Traded Test
The Treasury Regulations under Section 883 provide, in pertinent part, that shares of a foreign corporation will be considered to be "primarily traded" on an established securities market in a
country if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established
securities markets in any other single country. Our common shares are "primarily traded" on the Nasdaq Capital Market, which is an established securities market for these purposes.
The Treasury Regulations also require that our stock be “regularly traded” on an established securities market. Under the Treasury Regulations, our common shares will be considered to be "regularly
traded" on an established securities market if one or more classes of our stock representing more than 50% of our outstanding stock, by both total combined voting power of all classes of stock entitled to vote and total value, are listed on such
market, to which we refer as the Listing Threshold. Our common stock, which is listed on the Nasdaq Capital Market and is our only class of publicly-traded stock, constituted more than 50% of our outstanding shares by value for most of the 2022
taxable year, and accordingly, we believe that we satisfied the listing threshold for the 2022 taxable year.
It is further required that with respect to each class of stock relied upon to meet the Listing Threshold, (i) such class of stock is traded on the market, other than in minimal quantities, on at
least 60 days during the taxable year or one-sixth of the days in a short taxable year, or the Trading Frequency Test; and (ii) the aggregate number of shares of such class of stock traded on such market during the taxable year is at least 10% of the
average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, or the Trading Volume Test. The Company currently satisfies and anticipates that it will continue to
satisfy the Trading Frequency Test and Trading Volume Test. Even if this were not the case, the Treasury Regulations provide that the Trading Frequency Test and Trading Volume Tests will be deemed satisfied if, as is the case with our common shares,
such class of stock is traded on an established securities market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of stock will not be considered to be "regularly traded" on an established securities market for any
taxable year during which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified attribution rules, on more than half the days during the taxable year by persons who each own 5%
or more of the vote and value of such class of outstanding shares, to which we refer as the "5% Override Rule."
For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and value of our common shares, or 5% Shareholders, the Treasury Regulations permit us to
rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the United States Securities and Exchange Commission, or the SEC, as owning 5% or
26
more of our common shares. The Treasury Regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such
purposes.
In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will nevertheless not apply if we can establish that within the group of 5% Shareholders,
there are sufficient qualified shareholders for purposes of Section 883 to preclude non-qualified shareholders in such group from owning 50% or more of our common shares for more than half the number of days during the taxable year. In order to
benefit from this exception to the 5% Override Rule, the Company must satisfy certain substantiation requirements in regards to the identity of its 5% Shareholders.
We believe that we were subject to the Five Percent Override Rule, but nonetheless satisfied the Publicly-Traded Test for the 2022 taxable year because our nonqualified 5% Shareholders did not own
more than 50% of our common stock for more than half of the days during the taxable year. We intend to take this position on our 2022 U.S. federal income tax returns.
Taxation in Absence of Exemption
To the extent that the benefits of Section 883 are unavailable for any taxable year, our United States source shipping income, to the extent not considered to be “effectively connected” with the
conduct of a United States trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions which we refer to as the “4% gross basis tax regime”. Since under
the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from United States sources, the maximum effective rate of United States federal income tax on our shipping income will not exceed 2% under
the 4% gross basis tax regime.
To the extent our United States source shipping income is considered to be "effectively connected" with the conduct of a United States trade or business, as described below, any such "effectively
connected" United States source shipping income, net of applicable deductions, would be subject to United States federal income tax, currently imposed at a rate of 21%. In addition, we would generally be subject to the 30% "branch profits" tax on
earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our United States trade or business.
Our United States source shipping income would be considered "effectively connected" with the conduct of a United States trade or business only if:
we have, or are considered to have, a fixed place of business in the United States involved in the earning of United States source shipping income; and
substantially all of our United States source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular
intervals between the same points for voyages that begin or end in the United States.
We do not currently have, intend to have, or permit circumstances that would result in our having, any vessel sailing to or from the United States on a regularly scheduled basis. Based on the
foregoing and on the expected mode of our shipping operations and other activities, it is anticipated that none of our United States source shipping income will be "effectively connected" with the conduct of a United States trade or business for any
taxable year.
United States Federal Income Taxation of Gain on Sale of Vessels
If we qualify for exemption from tax under Section 883 in respect of the shipping income derived from the international operation of our vessels, then gain from the sale of any such vessel should
likewise be exempt from United States federal income tax under Section 883. If, however, our shipping income from such vessels does not for whatever reason qualify for exemption under Section 883, then any gain on the sale of a vessel will be subject
to United States federal income tax if such sale occurs in the United States. To the extent possible, we intend to structure the sales of our vessels so that the gain therefrom is not subject to United States federal income tax. However, there is no
assurance we will be able to do so.
United States Federal Income Taxation of United States Holders
The following is a discussion of the material United States federal income tax considerations relevant to an investment decision by a United States Holder, as defined below, with respect to our
common shares. This discussion does not purport to deal with the tax consequences of owning common shares to all categories of investors, some of which may be subject to special rules. This discussion only addresses considerations relevant to those
United States Holders who purchase common shares in an offering made under this prospectus and hold such shares as capital assets, that is, generally for investment purposes. You are encouraged to consult your own tax advisors concerning the overall
tax consequences arising in your own particular situation under United States federal, state, local or foreign law of the ownership of common shares.
As used herein, the term United States Holder means a beneficial owner of common shares that is an individual United States citizen or resident, a United States corporation or other United States
entity taxable as a corporation, an estate the income of
27
which is subject to United States federal income taxation regardless of its source, or a trust if (x) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and
one or more United States persons have the authority to control all substantial decisions of the trust or (y) the trust has made an election to be treated as a United States person.
If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a
partnership holding common shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common shares to a United States Holder will generally constitute dividends
to the extent of our current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to the
extent of the United States Holder's tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United States corporation, United States Holders that are corporations will not be entitled to claim
a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as "passive category income" for purposes of computing allowable foreign tax credits for
United States foreign tax credit purposes.
Dividends paid on our common shares to a United States Holder who is an individual, trust or estate, or a United States Non-Corporate Holder will generally be treated as "qualified dividend income"
that is taxable to such United States Non-Corporate Holder at preferential tax rates provided that (1) the common shares are readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market, on which our
common shares are traded); (2) we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (which, as discussed below, we have not been, are not and do not
anticipate being in the future); (3) the United States Non-Corporate Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend; and (4) the United
States Non-Corporate Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property.
Any distributions out of earnings and profits we pay which are not eligible for these preferential rates will be taxed as ordinary income to a United States Non-Corporate Holder.
Special rules may apply to any "extraordinary dividend"—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted tax basis in his common shares—paid by us.
If we pay an "extraordinary dividend" on our common shares that is treated as "qualified dividend income," then any loss derived by a United States Non-Corporate Holder from the sale or exchange of such common shares will be treated as long-term
capital loss to the extent of such dividend.
Sale, Exchange or Other Disposition of Common Shares
Assuming we do not constitute a passive foreign investment company for any taxable year, a United States Holder generally will recognize taxable gain or loss upon a sale, exchange or other
disposition of our common shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United States Holder's tax basis in such shares. Such gain or loss
will be treated as long-term capital gain or loss if the United States Holder's holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as United States
source income or loss, as applicable, for United States foreign tax credit purposes. Long-term capital gains of United States Non-Corporate Holders are currently eligible for reduced rates of taxation. A United States Holder's ability to deduct
capital losses is subject to certain limitations.
Passive Foreign Investment Company Status and Significant Tax Consequences
Special United States federal income tax rules apply to a United States Holder that holds shares in a foreign corporation classified as a "passive foreign investment company", or a PFIC, for United
States federal income tax purposes. In general, we will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such Holder holds our common shares, either:
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income.
For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in
which we own at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute
"passive income" unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.
28
Based on our current operations and future projections, we do not believe that we have been, are, nor do we expect to become, a passive foreign investment company with respect to any taxable year.
Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a passive foreign investment company, the gross income we derive or are deemed to derive from the
time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Accordingly, such income should not constitute passive income, and the assets that we own and operate in
connection with the production of such income, in particular, the vessels, should not constitute assets that produce or are held for the production of passive income for purposes of determining whether we are a PFIC. Therefore, based on our current
operations and future projections, we should not be treated as a PFIC with respect to any taxable year. There is substantial legal authority supporting this position, consisting of case law and IRS pronouncements concerning the characterization of
income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority that characterizes time charter income as rental income rather than services income for other tax purposes. It should be
noted that in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. Furthermore, although we intend to conduct our affairs in a manner to avoid being
classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a United States Holder would be subject to different United States federal income taxation rules depending on
whether the United States Holder makes an election to treat us as a "Qualified Electing Fund," which election we refer to as a QEF election. As an alternative to making a QEF election, a United States Holder should be able to make a "mark-to-market"
election with respect to our common shares, as discussed below. In addition, if we were to be treated as a PFIC for a taxable year, a United States Holder of our common stock would be required to file an annual information return on Form 8621 with
the IRS.
Taxation of United States Holders Making a Timely QEF Election
If a United States Holder makes a timely QEF election, which United States Holder we refer to as an "Electing Holder," the Electing Holder must report for United States federal income tax purposes
his pro rata share of our ordinary earnings and net capital gain, if any, for each taxable year of the Company during which it is a PFIC that ends with or within the taxable year of the Electing Holder, regardless of whether distributions were
received from us by the Electing Holder. No portion of any such inclusions of ordinary earnings will be treated as "qualified dividend income." Net capital gain inclusions of United States Non-Corporate Holders would be eligible for preferential
capital gain tax rates. The Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a
corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An Electing Holder would not, however, be entitled to a deduction for its pro rata share of any losses that we incur with respect to
any taxable year. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A United States Holder would make a timely QEF election for our shares by filing one copy of IRS Form
8621 with his United States federal income tax return for the first year in which he held such shares when we were a PFIC. If we were to be treated as a PFIC for any taxable year, we would provide each United States Holder with all necessary
information in order to make the QEF election described above. A United States Holder would not be able to make a QEF election with respect to our warrants.
Taxation of United States Holders Making a "Mark-to-Market" Election
Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate will be the case, our common shares are treated as "marketable stock," a United States Holder would be
allowed to make a "mark-to-market" election with respect to our common shares, provided the United States Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. Since our common shares
are traded on the Nasdaq Capital Market, we believe that our common shares can be treated as "marketable stock". If that election is made, the United States Holder generally would include as ordinary income in each taxable year the excess, if any,
of the fair market value of the common shares at the end of the taxable year over such Holder's adjusted tax basis in the common shares. The United States Holder would also be permitted an ordinary loss in respect of the excess, if any, of the United
States Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A United States
Holder's tax basis in his common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale,
exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the United States Holder.
Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election
Finally, if we were to be treated as a PFIC for any taxable year, a United States Holder who does not make either a QEF election or a "mark-to-market" election for that year, whom we refer to as a
Non-Electing Holder, would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of 125% of the average
annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common shares), and (2) any gain realized on the sale, exchange or other disposition of
our common shares. Under these special rules:
29
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common shares;
|
|
•
|
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, would be taxed as ordinary income and would not be "qualified dividend income"; and
|
|
•
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be
imposed with respect to the resulting tax attributable to each such other taxable year.
|
United States Federal Income Taxation of "Non-United States Holders"
A beneficial owner of common shares (other than a partnership) that is not a United States Holder is referred to herein as a Non-United States Holder.
If a partnership holds common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a
partnership holding common shares, you are encouraged to consult your tax advisor.
Dividends on Common Stock
A Non-United States Holder generally will not be subject to United States federal income tax or withholding tax on dividends received from us with respect to our common shares, unless that income is
effectively connected with the Non-United States Holder's conduct of a trade or business in the United States. If the Non-United States Holder is entitled to the benefits of a United States income tax treaty with respect to those dividends, that
income is subject to United Stated federal income tax only if it is attributable to a permanent establishment maintained by the Non-United States Holder in the United States.
Sale, Exchange or Other Disposition of Common Shares
Non-United States Holders generally will not be subject to United States federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares,
unless:
|
•
|
the gain is effectively connected with the Non-United States Holder's conduct of a trade or business in the United States (and, if the Non-United States Holder is entitled to the benefits of a United States income tax treaty with respect
to that gain, that gain is attributable to a permanent establishment maintained by the Non-United States Holder in the United States); or
|
|
•
|
the Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax purposes, dividends on the common shares, and gains from the sale, exchange or
other disposition of such shares, that are effectively connected with the conduct of that trade or business will generally be subject to regular United States federal income tax in the same manner as discussed in the previous section relating to the
taxation of United States Holders. In addition, if you are a corporate Non-United States Holder, your earnings and profits that are attributable to the effectively connected income, subject to certain adjustments, may be subject to an additional
"branch profits" tax at a rate of 30%, or at a lower rate as may be specified by an applicable United States income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements if you are a non-corporate United States
Holder. Such payments or distributions may also be subject to backup withholding if you are a non-corporate United States Holder and you:
|
•
|
fail to provide an accurate taxpayer identification number;
|
|
•
|
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
|
|
•
|
in certain circumstances, fail to comply with applicable certification requirements.
|
Non-United States Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as
applicable.
30
If you are a Non-United States Holder and you sell your common shares to or through a United States office of a broker, the payment of the proceeds is subject to both United States backup withholding
and information reporting unless you certify that you are a non-United States person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-United States office of a non-United States broker
and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, United States information reporting requirements, but not backup withholding, will
apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common shares through a non-United States office of a broker that is a United States person or has some other contacts with the
United States. Such information reporting requirements will not apply, however, if the broker has documentary evidence in its records that you are a non-United States person and certain other conditions are met, or you otherwise establish an
exemption.
Backup withholding is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your United States federal income tax
liability by filing a refund claim with the IRS.
Individuals who are United States Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-United States Holders and certain United States entities)
who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at
any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, our common stock,
unless the shares are held through an account maintained with a United States financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to
willful neglect. Additionally, the statute of limitations on the assessment and collection of United States federal income tax with respect to a taxable year for which the filing of IRS Form 8938 is required may not close until three years after the
date on which IRS Form 8938 is filed. United States Holders (including United States entities) and Non-United States Holders are encouraged to consult their own tax advisors regarding their reporting obligations under Section 6038D of the Code.
31
EXPENSES
The following are the estimated expenses of the issuance and distribution of the securities being registered under the registration statement of which this prospectus forms a part, all of which will be paid by us.
|
SEC registration fee
|
$
|
166
|
||
|
FINRA fee
|
*
|
|||
|
Legal fees and expenses
|
$
|
*
|
||
|
Accounting fees and expenses
|
$
|
*
|
||
|
Indenture trustee fees and expenses
|
*
|
|||
|
Rating agency fees
|
*
|
|||
|
Transfer Agent fees
|
*
|
|||
|
Miscellaneous
|
$
|
*
|
||
|
Total
|
$
|
166
|
*
|
| * |
To be updated, if necessary, by amendment, supplement or as an exhibit to Report on Form 6-K that is incorporated by reference in this registration statement.
|
EXPERTS
The consolidated financial statements of Euroseas Ltd. as of December 31, 2021 and 2020, and for each of the three years in the period ended December 31, 2021, incorporated by reference in this Prospectus by reference
to Euroseas Ltd.’s annual report on Form 20-F for the year ended December 31, 2021, have been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report. Such consolidated
financial statements are incorporated by reference in reliance upon the report of such firm, given their authority as experts in accounting and auditing. The offices of Deloitte Certified Public Accountants S.A. are located at Fragoklissias 3a &
Granikou Street, Maroussi, Athens 151 25, Greece.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon for us by Seward & Kissel LLP, New York, New York, with respect to matters of the law of the Republic of the Marshall Islands and with
respect to matters of United States and New York law.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As required by the Securities Act of 1933, we filed a registration statement relating to the securities offered by this prospectus with the Commission. This prospectus is a part of that registration statement, which
includes additional information.
Government Filings
We file annual and special reports with the Commission. You may read and copy any document that we file and obtain copies at prescribed rates from the Commission's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the Commission. In addition, you can obtain information about us at the offices of the Nasdaq Capital Market. Further information about our company is
available on our website at http://www.euroseas.gr. The information on our website does not constitute a part of this prospectus.
Information Incorporated by Reference
The Commission allows us to "incorporate by reference" information that we file with it. This means that we can disclose important information to you by referring you to those filed documents. The
information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the Commission prior to the termination of this offering will also be considered to be part of this prospectus and will
automatically update and supersede previously filed information, including information contained in this document.
In addition to the documents identified elsewhere in this prospectus as being incorporated by reference, we incorporate by reference the documents listed below and any future filings made with the
Commission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act:
|
•
|
Our Annual Report on Form 20-F for the year ended December 31, 2021, filed
with the Commission on April 22, 2022, which contains our audited consolidated financial statements for the most recent fiscal year for which those statements have been filed.
|
|
•
|
Exhibit 99.1 to our Report of Foreign Private Issuer on Form 6-K filed with the Commission
on July 26, 2022, which contains the results of the Company’s 2022 Annual General Meeting, held on July 22, 2022.
|
32
| • |
Exhibit 1 to our Report of Foreign Private Issuer on Form 6-K filed with the
Commission on October 11, 2022, which contains the Management’s Discussion and Analysis of Financial Condition and Results of Operations and unaudited interim condensed consolidated financial statements and related information of the
Company as of and for the six-month period ended June 30, 2022.
|
|
•
|
Exhibit 1 to our Report of Foreign Private Issuer on Form 6-K filed with the Commission
on November 14, 2022 (except for the paragraph beginning with “Aristides Pittas, Chairman and CEO of Euroseas commented:” and the next three paragraphs), which contains a press release reporting the Company’s results for the nine-month
period and quarter ended September 30, 2022.
|
|
•
|
Exhibit 1 to our Report of Foreign Private Issuer on Form 6-K filed with the Commission on December 29, 2022,
which contains a press release announcing the Company’s agreement to sell M/V Akinada Bridge.
|
We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the Commission and certain current reports on Form 6-K that we furnish to the Commission after the
date of this prospectus (if they state that they are incorporated by reference into this prospectus) until we file a post-effective amendment indicating that the offering of the securities made by this prospectus has been terminated. In all cases,
you should rely on the later information over different information included in this prospectus or any prospectus supplement.
You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not, and any underwriters have not, authorized
any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and any underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any accompanying prospectus supplement as well as the information we previously filed with the Commission and incorporated
by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.
You may request a free copy of the above-mentioned filings or any subsequent filing we incorporated by reference in this prospectus by writing or telephoning us at the following address:
Euroseas Ltd.
4 Messogiou & Evropis Street
151 24 Maroussi, Greece
+30-211-1804005
Information provided by the Company
We will furnish holders of our common shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm, and intend to furnish
quarterly reports containing selected unaudited financial data for each quarter of each fiscal year. The audited financial statements will be prepared in accordance with accounting principles generally accepted in the United States and those reports
will include a "Management's Discussion and Analysis of Financial Condition and Results of Operations" section for the relevant periods. As a "foreign private issuer", we are exempt from the rules under the Exchange Act prescribing the furnishing
and content of proxy statements to shareholders. While we intend to furnish proxy statements to any shareholder in accordance with the rules of the Nasdaq Capital Market, those proxy statements are not expected to conform to Schedule 14A of the
proxy rules promulgated under the Exchange Act. In addition, as a "foreign private issuer", we are exempt from the rules under the Exchange Act relating to short swing profit reporting and liability.
33
GLOSSARY OF SHIPPING TERMS
The following are definitions of certain terms that are commonly used in the shipping industry and in this prospectus.
Annual survey. The inspection of a vessel pursuant to international conventions, by a classification society surveyor, on behalf of the flag state, that takes
place every year.
Ballast. A voyage during which the vessel is not laden with cargo.
Bareboat charter. A charter of a vessel under which the shipowner is usually paid a fixed daily or monthly rate for a certain period of time during which the
charterer is responsible for the vessel operating expenses and voyage expenses of the vessel and for the management of the vessel. In this case, all voyage related costs, including vessel fuel, or bunker, and port dues as well as all vessel operating
expenses, such as day-to-day operations, maintenance, crewing and insurance are paid by the charterer. A bareboat charter is also known as a "demise charter" or a "time charter by demise" and involves the use of a vessel usually over longer periods
of time ranging over several years. The owner of the vessel receives monthly charterhire payments on a per day basis and is responsible only for the payment of capital costs related to the vessel.
Bunkers. Fuel oil used to operate a vessel's engines, generators and boilers.
Charter. The hire of a vessel for a specified period of time or to carry a cargo for a fixed fee from a loading port to a discharging port. The contract for a
charter is called a charterparty.
Charterer. The company that hires a vessel pursuant to a charter.
Charterhire. Money paid to the shipowner by a charterer for the use of a vessel under charter. Such payments are usually made during the course of the charter
every 15 or 30 days in advance or in arrears by multiplying the daily charter rate times the number of days and, under a time charter only, subtracting any time the vessel was deemed to be off-hire. Under a bareboat charter such payments are usually
made monthly and are calculated on a 360 or 365 day calendar year basis.
Charter rate. The amount of money agreed between the charterer and the shipowner accrued on a daily or monthly basis that is used to calculate the vessel's
charterhire.
Classification society. An independent society that certifies that a vessel has been built and maintained according to the society's rules for that type of
vessel and complies with the applicable rules and regulations of the country in which the vessel is registered, as well as the international conventions which that country has ratified. A vessel that receives its certification is referred to as being
"in class" as of the date of issuance.
Containerships. Vessels which are specially designed and built to carry large numbers of containers.
Deadweight ton or "dwt". A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel's dwt or
total deadweight is the total weight the vessel can carry when loaded to a particular load line.
Deep sea containership. A Deep Sea containership has a cargo carrying capacity of more than 3,000 teu and mostly serves the mainlane East-West container trade
routes.
Drybulk. Non-liquid cargoes of commodities shipped in an unpackaged state.
Drybulk carriers. Vessels which are specially designed and built to carry large volumes of drybulk.
Drydocking. The removal of a vessel from the water for inspection and/or repair of those parts of a vessel which are below the water line. During drydockings,
which are required to be carried out periodically, certain mandatory classification society inspections are carried out and relevant certifications issued. Drydockings are generally required once every 30 to 60 months.
Feeder. A short-sea containership having a cargo carrying capacity of less than 3,499 teu that transfers cargo between a central "hub" port and smaller
"spoke" ports.
Fully cellular containership. A containership equipped throughout with fixed cell guides for containers.
Freight. Money paid to the shipowner by a charterer for the use of a vessel under a voyage charter. Such payment is usually made on a lump-sum basis upon
loading or discharging the cargo and is derived by multiplying the tons of cargo loaded on board by the cost per cargo ton, as agreed to transport that cargo between the specific ports.
Gross ton. A unit of measurement for the total enclosed space within a ship equal to 100 cubic feet or 2.831 cubic meters used in arriving at the calculation
of gross tonnage.
34
Hull. Shell or body of a ship.
IMO. International Maritime Organization, a United Nations agency that issues international regulations and standards for seaborne transportation.
Intermediate containership. An Intermediate containership has a cargo carrying capacity between 3,500 and 6,000 teu and mostly serves the North-South and
Intermediate container trade routes.
Intermediate survey. The inspection of a vessel by a classification society surveyor which takes place between two and three years before and after each
Special Survey for such vessel pursuant to the rules of international conventions and classification societies.
Metric ton. A unit of weight equal to 1,000 kilograms.
Newbuilding. A new vessel under construction or just completed.
Off-Hire. The period a vessel is unable to perform the services for which it is required under a charter. Off-hire periods typically include days spent
undergoing repairs and drydocking, whether or not scheduled.
OPA. Oil Pollution Act of 1990 of the United States (as amended).
Period charter. A period charter is an industry term referring to both time and bareboat charters that last for more than a single voyage.
Pools. Pooling arrangements that enable participating vessels to combine their revenues. Vessels may be employed either exclusively in spot charters or a
combination of spot and period charters and contacts of affreightment. Pools are administered by the pool manager who secures employment for the participating vessels. The contract between a vessel in a shipping pool and the pool manager is a period
charter where the charter hire is based on the vessel's corresponding share of the income generated by all the vessels that participate in the pool. The corresponding share of every vessel in the pool is based on a pre-determined formula rating the
technical specifications of each vessel. Pools have the size and scope to combine spot market voyages, time charters and contracts of affreightment with freight forward agreements for hedging purposes to perform more efficient vessel scheduling
thereby increasing fleet utilization.
Protection and indemnity (or P&I) insurance. Insurance obtained through mutual associations (called "Clubs") formed by shipowners to provide liability
insurance protection against a large financial loss by one member by contribution towards that loss by all members. To a great extent, the risks are reinsured.
Scrapping. The disposal of old or damaged vessel tonnage by way of sale as scrap metal.
Short fund. A contract of affreightment to carry cargo.
SOLAS. The International Convention for the Safety of Life at Sea 1974, as amended, adopted under the auspices of the IMO.
Special survey. An extensive inspection of a vessel by classification society surveyors that must be completed within five years. Special surveys require a
vessel to be drydocked.
Spot charter. A spot charter is an industry term referring to both voyage and trip time charters. These charters are referred to as spot charters or spot
market charters due to their short term duration, constituting mostly of a single voyage between one load port and one discharge port.
Spot market. The market for the immediate chartering of a vessel usually for single voyages.
TEU. Twenty-foot equivalent unit, the international standard measure for containers and containership capacity.
TCE. Time charter equivalent, a standard industry measure of the average daily revenue performance of a vessel. The TCE rate achieved on a given voyage is
expressed in $ per day and is generally calculated by subtracting voyage expenses, including bunkers and port charges, from voyage revenues gross of commissions and dividing the net amount (time charter equivalent revenues) by the voyage days,
including the trip to the loading port. TCE is a standard seaborne transportation industry performance measure used primarily to compare period-to-period changes in a seaborne transportation company's performance despite changes in the mix of charter
types (i.e., voyage charters, time charters and bareboat charters) under which the vessels may be employed during specific periods. Our definition of TCE may not be comparable to that used by other companies in the shipping industry.
Time charter. A time charter is a contract under which a charterer pays a fixed daily hire rate usually on a semi-monthly basis for use of the vessel for an
agreed period. This is either a specific fixed period of time or a specific number of loaded voyages.
35
Subject to any restrictions in the charter, the charterer decides the type and quantity of cargo to be carried and the ports of loading and unloading. The charterer pays the voyage related expenses such as fuel, canal
tolls, and port charges. The shipowner pays all vessel operating expenses such as the management expenses and crew costs as well as for the capital costs of the vessel. Any delays at port or during the voyages are the responsibility of the charterer,
save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.
Trip time charter. A trip time charter is a short term time charter where the vessel performs a single voyage between load port(s) and discharge port(s) and
the charterer pays a fixed daily hire rate usually on a semi-monthly basis for use of the vessel. The difference between a trip time charter and a voyage charter is only in the form of payment for use of the vessel and the respective financial
responsibilities of the charterer and shipowner as described under Time Charter and Voyage Charter.
Ton. See "Metric ton."
Vessel operating expenses. The costs of operating a vessel that is incurred during a charter, primarily consisting of crew wages and associated costs,
insurance premiums, lubricants and spare parts, and repair and maintenance costs. Vessel operating expenses exclude fuel and port charges, which are known as "voyage expenses." For a time charter, the shipowner pays vessel operating expenses. For a
bareboat charter, the charterer pays vessel operating expenses.
Voyage charter. A voyage charter involves the carriage of a specific amount and type of cargo from specific load port(s) to specific discharge port(s),
subject to various cargo handling terms. Most of these charters are of a single voyage nature between two specific ports, as trading patterns do not encourage round voyage trading. The owner of the vessel receives one payment derived by multiplying
the tons of cargo loaded on board by the cost per cargo ton, as agreed to transport that cargo between the specific ports. The owner is responsible for the payment of all expenses including voyage, operating and capital costs of the vessel. The
charterer is typically responsible for any delay at the loading or discharging ports.
Voyage expenses. Expenses incurred due to a vessel's traveling from a loading port to a discharging port, such as fuel (bunker) cost, port expenses, agent's
fees, canal dues and extra war risk insurance, as well as commissions.
36
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 8. Indemnification of
Directors and Officers.
The bylaws, as amended, of the Registrant provide that any person who is or was a director or officer of the Registrant, or is or was serving at the request of the Registrant as a director or officer
of another, partnership, joint venture, trust or other enterprise, shall be entitled to be indemnified by the Registrant upon the same terms, under the same conditions, and to the same extent as authorized by Section 60 of the BCA, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 60 of the BCA provides as follows:
Indemnification of directors and officers.
(1) Actions not by or in right of the corporation. A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) Actions by or in right of the corporation. A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him or in connection with the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not, opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
(3) When director or officer successful. To the extent that a director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred
to in subsections (1) or (2) of this section, or in the defense of a claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.
(4) Payment of expenses in advance. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding as
authorized by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation
as authorized in this section.
(5) Indemnification pursuant to other rights. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
(6) Continuation of indemnification. The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(7) Insurance. A corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation or is or was serving at the request
of the corporation as a director or officer against any liability asserted against him and incurred by him in such capacity whether or not the corporation would have the power to indemnify him against such liability under the provisions of this
section.
II-1
Item 9. Exhibits
A list of exhibits included as part of this registration statement is set forth in the Description of Exhibits which immediately precedes such exhibits and is incorporated herein by reference.
Item 10. Undertakings
The undersigned registrant hereby undertakes:
| (a) |
Under Rule 415 of the Securities Act,
|
| (1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement unless the information required to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of
a prospectus filed pursuant to Rule 424(b) that is part of the registration statement;
|
| (i) |
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
|
| (ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
|
| (iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
|
| (2) |
That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
| (3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
| (4) |
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Rule 3-19 under the Securities Act
of 1933 if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
|
| (5)(i) |
That, for the purpose of determining any liability under the Securities Act of 1933, as amended, to any purchaser;
|
| (A) |
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this Registration Statement as of the date the filed prospectus was deemed part of and included in this Registration Statement; and
|
II-2
| (B) |
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness
or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed
to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
|
| (6) |
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of
the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
| (i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
|
| (ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
| (iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
|
| (iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
| (b) |
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
(c)–(d) Not applicable.
| (e) |
The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X
is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such
interim financial information.
|
| (f)–(g) |
Not applicable.
|
| (h) |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
|
| (i) |
Not applicable.
|
| (j) |
The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Trust Indenture Act.
|
| (k) |
Not applicable.
|
II-3
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has
duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Maroussi, country of Greece on December 29, 2022.
|
EUROSEAS LTD.
|
||
|
By:
|
/s/ Aristides J. Pittas
|
|
|
Name:
|
Aristides J. Pittas
|
|
|
Title:
|
President and Chief Executive Officer
|
|
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Aristides J. Pittas and Dr. Anastasios Aslidis his true and lawful attorney-in-fact and
agent, with full powers of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
|
/s/ Aristides J. Pittas
|
Chairman of the Board of Directors,
|
December 29, 2022
|
|
|
Aristides J. Pittas
|
President, Chief Executive Officer
|
||
|
(Principal Executive Officer)
|
|||
|
/s/ Dr. Anastasios Aslidis
|
Chief Financial Officer, Treasurer and Director
|
December 29, 2022
|
|
|
Dr. Anastasios Aslidis
|
(Principal Financial and Accounting Officer)
|
||
|
/s/ Aristides P. Pittas
|
Vice Chairman and Director
|
December 29, 2022
|
|
|
Aristides P. Pittas
|
|||
|
/s/ Apostolos Tamvakakis
|
Director
|
December 29, 2022
|
|
|
Apostolos Tamvakakis
|
|||
|
/s/ Panagiotis Kyriakopoulos
|
Director
|
December 29, 2022
|
|
|
Panagiotis Kyriakopoulos
|
|||
|
/s/ George Taniskidis
|
Director
|
December 29, 2022
|
|
|
George Taniskidis
|
|||
|
/s/ Andreas Papathomas
|
Director
|
December 29, 2022
|
|
|
Andreas Papathomas
|
II-4
AUTHORIZED UNITED STATES REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Euroseas Ltd., has signed this Registration
Statement on Form F-3 in the City of Watchung, New Jersey on December 29, 2022.
|
By:
|
/s/ Dr. Anastasios Aslidis
|
||
|
Name: Dr. Anastasios Aslidis
|
|||
|
Authorized Representative in the United States
|
|||
II-5
|
Exhibits
|
Description of Exhibits
|
|
1.1
|
Form of Underwriting Agreement *
|
|
4.1
|
|
|
4.2
|
Specimen preferred share certificate *
|
|
4.3
|
Form of warrant agreement *
|
|
4.4
|
Form of unit agreement *
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
5.1
|
|
|
8.1
|
|
|
23.1
|
|
|
23.2
|
|
|
24.1
|
|
|
25.1
|
Form of T-1 Statement of Eligibility (senior indenture) *
|
|
25.2
|
Form of T-1 Statement of Eligibility (subordinated indenture) *
|
|
107
|
| * |
To be filed as an amendment or as an exhibit to a report filed pursuant to the Securities Exchange Act of 1934, as amended, and incorporated by reference herein.
|
| (1) |
Incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement (File No. 333-152089) filed with the Commission on July 2, 2008.
|
| (2) |
Incorporated herein by reference to Exhibit 1 to the Company's report on Form 6-K filed with the Commission on February 1, 2021.
|
| (3) |
Incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 6-K filed with the Commission on May 27, 2019.
|
| (4) |
Incorporated herein by reference to Exhibit 4.1 to the Company's report on Form 6-K filed with the Commission on May 27, 2019.
|
| (5) |
Incorporated herein by reference to Exhibit 4.20 to the Company’s Annual Report on Form 20-F filed with the Commission on April 22, 2022.
|
|
|
II-6
Exhibit 4.5
EUROSEAS LTD.
FORM OF
SENIOR INDENTURE
Dated as of [ ], 20[ ]
[ ]
Trustee
TABLE OF CONTENTS
PAGE
|
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
|
1
|
|
SECTION 1.01. Definitions.
|
1
|
|
SECTION 1.02. Other Definitions.
|
5
|
|
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act.
|
5
|
|
SECTION 1.04. Rules of Construction.
|
6
|
|
ARTICLE II THE SECURITIES
|
6
|
|
SECTION 2.01. Issuable in Series.
|
6
|
|
SECTION 2.02. Establishment of Terms of Series of Securities.
|
7
|
|
SECTION 2.03. Execution and Authentication.
|
9
|
|
SECTION 2.04. Registrar and Paying Agent.
|
10
|
|
SECTION 2.05. Paying Agent to Hold Money in Trust.
|
10
|
|
SECTION 2.06. Securityholder Lists.
|
11
|
|
SECTION 2.07. Transfer and Exchange.
|
11
|
|
SECTION 2.08. Mutilated, Destroyed, Lost and Stolen
Securities.
|
12
|
|
SECTION 2.09. Outstanding Securities.
|
12
|
|
SECTION 2.10. Treasury Securities.
|
13
|
|
SECTION 2.11. Temporary Securities.
|
13
|
|
SECTION 2.12. Cancellation.
|
13
|
|
SECTION 2.13. Defaulted Interest.
|
14
|
|
SECTION 2.14. Global Securities.
|
14
|
|
SECTION 2.15. CUSIP Numbers.
|
15
|
|
ARTICLE III REDEMPTION
|
15
|
|
SECTION 3.01. Notice to Trustee.
|
15
|
|
SECTION 3.02. Selection of Securities to be Redeemed.
|
15
|
|
SECTION 3.03. Notice of Redemption.
|
16
|
|
SECTION 3.04. Effect of Notice of Redemption.
|
16
|
|
SECTION 3.05. Deposit of Redemption Price.
|
17
|
|
SECTION 3.06. Securities Redeemed in Part.
|
17
|
|
ARTICLE IV COVENANTS
|
17
|
|
SECTION 4.01. Payment of Principal and Interest.
|
17
|
|
SECTION 4.02. SEC Reports.
|
17
|
|
SECTION 4.03. Compliance Certificate.
|
18
|
|
SECTION 4.04. Stay, Extension and Usury Laws.
|
19
|
|
SECTION 4.05. Corporate Existence.
|
19
|
|
SECTION 4.06. Taxes.
|
19
|
|
SECTION 4.07. Additional Interest Notice.
|
19
|
|
SECTION 4.08. Further Instruments and Acts.
|
19
|
|
ARTICLE V SUCCESSORS
|
20
|
|
SECTION 5.01. When Company May Merge, Etc.
|
20
|
|
SECTION 5.02. Successor Corporation Substituted.
|
20
|
|
ARTICLE VI DEFAULTS AND REMEDIES
|
20
|
|
SECTION 6.01. Events of Default.
|
20
|
|
SECTION 6.02. Acceleration of Maturity; Rescission and
Annulment.
|
22
|
|
SECTION 6.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
|
24
|
|
SECTION 6.04. Trustee May File Proofs of Claim.
|
24
|
|
SECTION 6.05. Trustee May Enforce Claims Without Possession of
Securities.
|
25
|
|
SECTION 6.06. Application of Money Collected.
|
25
|
|
SECTION 6.07. Limitation on Suits.
|
25
|
|
SECTION 6.08. Unconditional Right of Holders to Receive
Principal and Interest.
|
26
|
|
SECTION 6.09. Restoration of Rights and Remedies.
|
26
|
|
SECTION 6.10. Rights and Remedies Cumulative.
|
26
|
|
SECTION 6.11. Delay or Omission Not Waiver.
|
26
|
|
SECTION 6.12. Control by Holders.
|
27
|
|
SECTION 6.13. Waiver of Past Defaults.
|
27
|
|
SECTION 6.14. Undertaking for Costs.
|
27
|
|
ARTICLE VII TRUSTEE
|
28
|
|
SECTION 7.01. Duties of Trustee.
|
28
|
|
SECTION 7.02. Rights of Trustee.
|
29
|
|
SECTION 7.03. Individual Rights of Trustee.
|
30
|
|
SECTION 7.04. Trustee's Disclaimer.
|
30
|
|
SECTION 7.05. Notice of Defaults.
|
30
|
|
SECTION 7.06. Reports by Trustee to Holders.
|
30
|
|
SECTION 7.07. Compensation and Indemnity.
|
31
|
|
SECTION 7.08. Replacement of Trustee.
|
31
|
|
SECTION 7.09. Successor Trustee by Merger, etc.
|
32
|
|
SECTION 7.10. Eligibility; Disqualification.
|
32
|
|
SECTION 7.11. Preferential Collection of Claims Against
Company.
|
33
|
|
ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE
|
33
|
|
SECTION 8.01. Satisfaction and Discharge of Indenture.
|
33
|
|
SECTION 8.02. Application of Trust Funds; Indemnification.
|
34
|
|
SECTION 8.03. Legal Defeasance of Securities of any Series.
|
35
|
|
SECTION 8.04. Covenant Defeasance.
|
36
|
|
SECTION 8.05. Repayment to Company.
|
37
|
|
ARTICLE IX AMENDMENTS AND WAIVERS
|
37
|
|
SECTION 9.01. Without Consent of Holders.
|
37
|
|
SECTION 9.02. With Consent of Holders.
|
38
|
|
SECTION 9.03. Limitations.
|
39
|
|
SECTION 9.04. Compliance with Trust Indenture Act.
|
39
|
|
SECTION 9.05. Revocation and Effect of Consents.
|
40
|
|
SECTION 9.06. Notation on or Exchange of Securities.
|
40
|
|
SECTION 9.07. Trustee Protected.
|
40
|
|
SECTION 9.08. Effect of Supplemental Indenture.
|
40
|
|
ARTICLE X MISCELLANEOUS
|
41
|
|
SECTION 10.01. Trust Indenture Act Controls.
|
41
|
|
SECTION 10.02. Notices.
|
41
|
|
SECTION 10.03. Communication by Holders with Other Holders.
|
42
|
|
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent.
|
42
|
|
SECTION 10.05. Statements Required in Certificate or Opinion.
|
42
|
|
SECTION 10.06. Record Date for Vote or Consent of Holders.
|
43
|
|
SECTION 10.07. Rules by Trustee and Agents.
|
43
|
|
SECTION 10.08. Legal Holidays.
|
43
|
|
SECTION 10.09. No Recourse Against Others.
|
43
|
|
SECTION 10.10. Counterparts.
|
43
|
|
SECTION 10.11. Governing Laws and Submission to Jurisdiction.
|
44
|
|
SECTION 10.12. No Adverse Interpretation of Other Agreements.
|
44
|
|
SECTION 10.13. Successors.
|
44
|
|
SECTION 10.14. Severability.
|
44
|
|
SECTION 10.15. Table of Contents, Headings, Etc.
|
44
|
|
SECTION 10.16. Securities in a Foreign Currency or in ECU.
|
45
|
|
SECTION 10.17. Judgment Currency.
|
45
|
|
SECTION 10.18. Compliance with Applicable Anti-Terrorism and
Money Laundering Regulations.
|
46
|
|
ARTICLE XI SINKING FUNDS
|
46
|
|
SECTION 11.01. Applicability of Article.
|
46
|
|
SECTION 11.02. Satisfaction of Sinking Fund Payments with
Securities.
|
47
|
|
SECTION 11.03. Redemption of Securities for Sinking Fund.
|
47
|
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
Dated as of [ ], 20[ ]
|
Section 310(a)(1)
|
7.10
|
|
(a)(2)
|
7.10
|
|
(a)(3)
|
Not Applicable
|
|
(a)(4)
|
Not Applicable
|
|
(a)(5)
|
7.10
|
|
(b)
|
7.10
|
|
(c)
|
Not Applicable
|
|
Section 311(a)
|
7.11
|
|
(b)
|
7.11
|
|
(c)
|
Not Applicable
|
|
Section 312(a)
|
2.06
|
|
(b)
|
10.03
|
|
(c)
|
10.03
|
|
Section 313(a)
|
7.06
|
|
(b)(1)
|
7.06
|
|
(b)(2)
|
7.06
|
|
(c)(1)
|
7.06
|
|
(d)
|
7.06
|
|
Section 314(a)
|
4.02, 10.05
|
|
(b)
|
Not Applicable
|
|
(c)(1)
|
10.04
|
|
(c)(2)
|
10.04
|
|
(c)(3)
|
Not Applicable
|
|
(d)
|
Not Applicable
|
|
(e)
|
10.05
|
|
(f)
|
Not Applicable
|
|
Section 315(a)
|
7.01
|
|
(b)
|
7.05
|
|
(c)
|
7.01
|
|
(d)
|
7.01
|
|
(e)
|
6.14
|
|
Section 316(a)(1)(A)
|
6.12
|
|
(a)(1)(B)
|
6.13
|
|
(a)(2)
|
Not Applicable
|
|
(b)
|
6.13
|
|
(c)
|
10.06
|
|
Section 317(a)(1)
|
6.03
|
|
(a)(2)
|
6.04
|
|
(b)
|
2.05
|
|
Section 318(a)
|
10.01
|
Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.
Indenture dated as of [ ], 20[ ] between Euroseas Ltd., a company organized under the
laws of the Republic of the Marshall Islands (the "Company") and [ ] (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of
debtors.
"Board of Directors" means the board of directors of the Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been adopted by
the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee.
"Business Day" means any day other than a (x) Saturday, (y) Sunday or (z) day on which state or federally chartered banking institutions in
New York, New York are not required to be open.
"Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) equity of such Person, but excluding any debt securities convertible into such equity.
1
"Certificated Securities" means Securities in the form of physical, certificated Securities in registered form.
"Company" means the party named as such above until a successor replaces it in accordance with the terms of this Indenture and thereafter
means the successor.
"Company Order" means a written order signed in the name of the Company by two Officers, one of whom must be the Company's principal
executive officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the Company by its Chairman of the Board, a President or a Vice President,
and by its Chief Financial Officer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally
administered which office at the date of the execution of this Indenture is [], Attention: [], or at such other address as the Trustee may designate from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.
"Default" or "default" means any event which is, or after notice or passage of time or both would be, an Event of Default.
"Default Rate" means the default rate of interest specified in the Securities.
"Depository" means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, "Depository" as used with respect to
the Securities of any Series shall mean the Depository with respect to the Securities of such Series.
"Discount Security" means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the Commission of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a government other than the government of The United States of America.
2
"Foreign Government Obligations" means with respect to Securities of any Series that are denominated in a Foreign Currency, (i) direct
obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) or (ii), are not callable or redeemable at the option of
the issuer thereof.
"Global Security" or "Global Securities" means a Security or Securities, as the case may be, in the
form established pursuant to Section 2.02 evidencing all or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee.
"Holder" or "Securityholder" means a person in whose name a Security is registered.
"Indenture" means this Indenture as amended and supplemented from time to time and shall include the form and terms of particular Series of
Securities established as contemplated hereunder.
"Interest," in respect of the Securities, unless the context otherwise requires, refers to interest payable on the Securities, including any
additional interest that may become payable pursuant to Section 6.02(b).
"Maturity," when used with respect to any Security or installment of principal thereof, means the date on which the principal of such
Security or such installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect repayment or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is, and which opinion is, acceptable to the Trustee and its counsel. Such
legal counsel may be an employee of or counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof.
"Principal" or "principal" of a Security means the principal of the Security plus, when appropriate,
the premium, if any, on, and any Additional Amounts in respect of, the Security.
3
"Responsible Officer" means any officer of the Trustee in its Corporate Trust Office and also means, any vice president, managing director,
director, associate, assistant vice president, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular corporate trust matter, any
other officer to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Security" or "Securities" means the debentures, notes or other debt instruments of the Company of
any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures, notes or other debt instruments
of the Company created pursuant to Sections 2.01 and 2.02 hereof.
"Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
"Subordinated Indebtedness" means any indebtedness which is expressly subordinated to the indebtedness evidenced by Securities.
"Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, "Trustee" as used with respect to the
Securities of any Series shall mean the Trustee with respect to Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct obligations of The United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of The United States of America the payment of which is unconditionally guaranteed as a full faith and credit
obligation by The United States of America, and which in the case of (i) and (ii) are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depository receipt.
4
SECTION 1.02. Other Definitions.
|
TERM
|
DEFINED IN SECTION
|
|
"Applicable Law"
|
10.18
|
|
"Event of Default"
|
6.01
|
|
"Instrument"
|
6.01
|
|
"Journal"
|
10.16
|
|
"Judgment Currency"
|
10.17
|
|
"Legal Holiday"
|
10.08
|
|
"mandatory sinking fund payment"
|
11.01
|
|
"Market Exchange Rate"
|
10.16
|
|
"New York Banking Day"
|
10.17
|
|
"optional sinking fund payment"
|
11.01
|
|
"Paying Agent"
|
2.04
|
|
"Registrar"
|
2.04
|
|
"Required Currency"
|
10.17
|
|
"successor person"
|
5.01
|
|
"Temporary Securities"
|
2.11
|
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. This Indenture shall also include those
provisions of the TIA required to be included herein by the provisions of the Trust Indenture Reform Act of 1990. The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein
are used herein as so defined.
5
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles;
(c) references to "generally accepted accounting principles" shall mean generally accepted accounting
principles in effect as of the time when and for the period as to which such accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural include the singular;
(f) provisions apply to successive events and transactions;
(g) references to agreements and other instruments include subsequent amendments thereto;
(h) the term "merger" includes a statutory share exchange, and the term "merged" has a correlative meaning;
and
(i) "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE II
THE SECURITIES
THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more Series. All
Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers' Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a Board Resolution.
In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers' Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, maturity date, record date or date
from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.
6
SECTION 2.02. Establishment of Terms of Series of Securities.
At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection (a), and either as to such
Securities within the Series or as to the Series generally in the case of Subsections (b) through (t) by a Board Resolution, a supplemental indenture or an Officers' Certificate pursuant to authority granted under a Board Resolution:
(a) the title, designation, aggregate principal amount and authorized denominations of the Securities of the
Series;
(b) the price or prices, (expressed as a percentage of the aggregate principal amount thereof) at which the
Securities of the Series will be issued;
(c) the date or dates on which the principal of the Securities of the Series is payable;
(d) the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to
determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if
any, shall commence and be payable and any regular record date for the interest payable on any interest payment date;
(e) any optional or mandatory sinking fund provisions or conversion or exchangeability provisions upon which
Securities of the Series shall be redeemed, purchased, converted or exchanged;
(f) the date, if any, after which and the price or prices at which the Securities of the Series may be
optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory provisions;
(g) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the
Securities of the Series shall be issuable;
(h) if other than the full principal amount, the portion of the principal amount of the Securities of the
Series that shall be payable upon declaration of acceleration pursuant to Section 6.02 or provable in bankruptcy;
(i) any addition to or change in the Events of Default which applies to any Securities of the Series and any
change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.02;
(j) the currency or currencies, including composite currencies, in which payments of principal of, premium or
interest, if any, on the Securities of the Series will be payable, if other than the currency of the United States of America;
7
(k) if payments of principal of, premium or interest, if any, on the Securities of the Series will be payable,
at the Company's election or at the election of any Holder, in a currency other than that in which the Securities of the Series are stated to be payable, the period or periods within which, and the terms and conditions upon which, the election may be
made;
(l) if payments of interest, if any, on the Securities of the Series will be payable, at the Company's
election or at the election of any Holder, in cash or additional securities, and the terms and conditions upon which the election may be made;
(m) if denominated in a currency or currencies other than the currency of the United States of America, the
equivalent price of the Securities of the Series in the currency of the United States of America for purposes of determining the voting rights of Holders of the Securities of the Series;
(n) if the amount of payments of principal, premium or interest may be determined with reference to an index,
formula or other method based on a coin or currency other than that in which the Securities of the Series are stated to be payable, the manner in which the amounts will be determined;
(o) any restrictive covenants or other material terms relating to the Securities of the Series;
(p) whether the Securities of the Series will be issued in the form of global securities or certificates in
registered form;
(q) any terms with respect to subordination;
(r) any listing on any securities exchange or quotation system;
(s) additional provisions, if any, related to defeasance and discharge of the offered debt securities; and
(t) the applicability of any guarantees, which would be governed by New York law.
All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant
to the Board Resolution, supplemental indenture or Officers' Certificate referred to above, and the authorized principal amount of any Series may not be increased to provide for issuance of additional Securities of such Series, unless otherwise
provided in such Board Resolution, supplemental Indenture or Officers' Certificate.
8
SECTION 2.03. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security
has been authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture
hereto or Officers' Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which
oral instructions shall be promptly confirmed in writing. Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board
Resolution, supplemental indenture hereto or Officers' Certificate delivered pursuant to Section 2.02, except as provided in Section 2.08.
Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.02) shall be fully protected in relying on: (a) the Board Resolution,
supplemental indenture hereto or Officers Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers'
Certificate complying with Section 10.04, and (c) an Opinion of Counsel complying with Section 10.04.
The Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action may
not lawfully be taken; or (b) if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may
do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate.
If any successor that has replaced the Company in accordance with Article 5 has executed an indenture supplemental hereto with the Trustee pursuant to Section 5.01, any of the
Securities authenticated or delivered prior to such transaction may, from time to time, at the request of such successor, be exchanged for other Securities executed in the name of the such successor with such changes in phraseology and form as may be
appropriate, but otherwise identical to the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon receipt of a Company Order of such successor, shall authenticate and deliver Securities as specified in such
order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of such successor pursuant to this provision of Section 2.03 in exchange or substitution for or upon registration of transfer of
any Securities, such successor, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities then outstanding for Securities authenticated and delivered in such new name.
9
SECTION 2.04. Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.02, an office or agency
where Securities of such Series may be presented or surrendered for payment ("Paying Agent") and where Securities of such Series may be surrendered for registration of transfer or exchange ("Registrar"). The Registrar shall keep a register with
respect to each Series of Securities and to their transfer and exchange. The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar and Paying Agent. If at any time
the Company shall fail to maintain any such required Registrar or Paying Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations and surrenders may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations and surrenders.
The Company may also from time to time designate one or more co-registrars or additional paying agents and may from time to time rescind such designations; provided, however, that
no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar or Paying Agent in each place so specified pursuant to Section 2.02 for Securities of any Series for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar or additional paying agent. The term "Registrar" includes any co-registrar; and the term "Paying Agent"
includes any additional paying agent.
The Company hereby appoints [ ] as the initial Registrar and Paying Agent
for each Series unless another Registrar or Paying Agent as the case may be, is appointed prior to the time Securities of that Series are first issued. Each Registrar and Paying Agent shall be entitled to all of the rights, protections, exculpations
and indemnities afforded to the Trustee in connection with its roles as Registrar and Paying Agent.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if
other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Securityholders of any Series of
Securities all money held by it as Paying Agent.
10
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of
Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least [ ] days before each interest payment date and at such other times as the Trustee may request in
writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of each Series of Securities.
SECTION 2.07. Transfer and Exchange.
Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities
of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's
request. Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge required by law; provided that this sentence shall not apply to
any exchange pursuant to Section 2.11, 2.08, 3.06 or 9.06.
Neither the Company nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening of
business [ ] days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange
Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part.
All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange. Any Registrar appointed pursuant to Section 2.04 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such Registrar of
Securities upon transfer or exchange of Securities. Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Security in violation of
any provision of this Indenture and/or applicable U.S. federal or state securities law.
11
SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Registrar, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same
Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Registrar (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity
as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Registrar that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new
Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company 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.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions
in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds on the Maturity of Securities of a Series money sufficient to pay such Securities
payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue.
12
A Security does not cease to be outstanding because the Company or an Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.02.
SECTION 2.10. Treasury Securities.
In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction, notice, consent or
waiver Securities of a Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice,
consent or waiver only Securities of a Series that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.11. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary securities upon a Company Order ("Temporary Securities").
Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee upon
written request shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities. Until so exchanged, temporary securities shall have the same rights under this Indenture as the definitive
Securities.
SECTION 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, payment or conversion. The Trustee and no one else shall cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, payment, conversion or cancellation and shall
deliver the cancelled Securities to the Company. No Security shall be authenticated in exchange for any Security cancelled pursuant to this Section 2.12.
The Company may, to the extent permitted by law, purchase Securities in the open market or by tender offer at any price or by private agreement. Any Securities purchased or
otherwise acquired by the Company or any of its Subsidiaries prior to the final maturity of such Securities may, to the extent permitted by law, be reissued or resold or may, at the option of the Company, be surrendered to the Trustee for
cancellation. Any Securities surrendered for cancellation may not be reissued or resold and shall be promptly cancelled by the Trustee, and the Company may not hold or resell such Securities or issue any new Securities to replace any such
Securities.
13
SECTION 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on a Series of Securities, it shall pay defaulted interest, plus, to the extent permitted by law, any interest payable on the
defaulted interest at the Default Rate, to the persons who are Security holders of the Series on a subsequent special record date. The Company shall fix the record date and payment date. At least [ ] days before the record date, the Company shall
mail to the Trustee and the Paying Agent and to each Securityholder of the Series a notice that states the record date, the payment date and the amount of interest to be paid. The Company may pay defaulted interest in any other lawful manner.
SECTION 2.14. Global Securities.
(a) A Board Resolution, a supplemental indenture hereto or an Officers' Certificate shall establish whether
the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or Securities.
(b) (i) Notwithstanding
any provisions to the contrary contained in Section 2.07 of the Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.07 of the Indenture for Securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (A) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered
under the Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 90 days of such event, (B) the Company executes and delivers to the Trustee an Officers' Certificate to the effect that such Global Security shall
be so exchangeable or (C) an Event of Default with respect to the Securities represented by such Global Security shall have happened and be continuing.
(ii) Except as provided in this Section 2.14(b), a Global Security may not be transferred except as a
whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository.
(iii) Securities issued in exchange for a Global Security or any portion thereof shall be issued in
definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized
denominations as the Depository shall designate and shall bear the applicable legends provided for herein. Any Global Security to be exchanged in whole shall be surrendered by the Depository to the Trustee, as Registrar. With regard to any
Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Registrar is acting as custodian for the Depository or its nominee with respect to such Global Security, the principal amount
thereof shall be reduced by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver
the Security issuable on such exchange to or upon the order of the Depository or an authorized representative thereof.
(iv) The registered Holder may grant proxies and otherwise authorize any Person, including participants
in the Depository and persons that may hold interests through participants in the Depository, to take any action which a Holder is entitled to take under this Indenture or the Securities.
(v) In the event of the occurrence of any of the events specified in 2.14(b)(i), the Company will
promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons. If (A) an event described in Section 2.14(b)(i)(A) or (B) occurs and definitive Certificated
Securities are not issued promptly to all beneficial owners or (B) the Registrar receives from a beneficial owner instructions to obtain definitive Certificated Securities due to an event described in Section 2.14(b)(i)(C) and definitive
Certificated Securities are not issued promptly to any such beneficial owner, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.07 hereof, the right of any beneficial owner of
Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner's Securities as if such definitive certificated Securities had been issued.
(vi) Notwithstanding any provision to the contrary in this Indenture, so long as a Global Security
remains outstanding and is held by or on behalf of the Depository, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Section 2.07, this Section 2.14(b) and the rules
and procedures of the Depository for such Global Security to the extent applicable to such transaction and as in effect from time to time.
(c) Any Global Security issued hereunder shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository. This
Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a
nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository."
(d) The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any
request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.
14
(e) Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by
Section 2.02, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof at their registered office.
(f) At all times the Securities are held in book-entry form with a Depository, (i) the Trustee may deal with
such Depository as the authorized representative of the Holders, (ii) the rights of the Holders shall be exercised only through the Depository and shall be limited to those established by law and agreement between the Holders and the Depository
and/or direct participants of the Depository, (iii) the Depository will make book-entry transfers among the direct participants of the Depository and will receive and transmit distributions of principal and interest on the Securities to such direct
participants; and (iv) the direct participants of the Depository shall have no rights under this Indenture, or any supplement hereto, under or with respect to any of the Securities held on their behalf by the Depository, and the Depository may be
treated by the Trustee and its agents, employees, officers and directors as the absolute owner of the Securities for all purposes whatsoever.
SECTION 2.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP", "CCN", "ISIN" or other identification numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP", "CCN",
"ISIN" or such other identification numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE III
REDEMPTION
REDEMPTION
SECTION 3.01. Notice to Trustee.
The Company may, with respect to any series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities or
any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated Maturity thereof all
or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee and Registrar in writing of the redemption date and the principal amount of Series of Securities to be redeemed. The Company shall give the
notice at least [ ] days before the redemption date (or such shorter notice as may be acceptable to the Trustee and Registrar).
SECTION 3.02. Selection of Securities to be Redeemed.
Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers' Certificate, if less than all the Securities of a Series are to be
redeemed, the Registrar shall select the Securities of the Series to be redeemed in accordance with its customary procedures. The Registrar shall make the selection from Securities of the Series outstanding not previously called for redemption. The
Registrar may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000. Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole multiples of $1,000
or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(g), the minimum principal denomination for each Series and integral multiples thereof. Provisions of this Indenture that apply to Securities of a
Series called for redemption also apply to portions of Securities of that Series called for redemption.
15
SECTION 3.03. Notice of Redemption.
Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers' Certificate, at least [ ] days but not more than [ ] days
before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities of the Series to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the
redemption price;
(e) that interest on Securities of the Series called for redemption ceases to accrue on and after the
redemption date; and
(f) any other information as may be required by the terms of the particular Series or the Securities of a
Series being redeemed.
At the Company's written request, the Trustee shall distribute the notice of redemption prepared by the Company in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed or published as provided in Section 3.03, Securities of a Series called for redemption become due and payable on the redemption date and at the
redemption price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date.
16
SECTION 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to
be redeemed on that date.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
COVENANTS
SECTION 4.01. Payment of Principal and Interest.
The Company covenants and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and interest, if any, on the Securities of that Series
in accordance with the terms of such Securities and this Indenture.
Unless otherwise provided under the terms of a particular Series of Securities:
(a) an installment of principal or interest shall be considered paid on the date it is due if the Paying Agent
(other than the Company) holds by [ ] [a].m., New York City time, on that date money, deposited by the Company or an Affiliate thereof, sufficient to pay such installment. The Company shall
(in immediately available funds), to the fullest extent permitted by law, pay interest on overdue principal and overdue installments of interest at the rate borne by the Securities per annum; and
(b) payment of the principal of and interest on the Securities shall be made at the office or agency of the
Company maintained for that purpose in [ ] (which shall initially be [ ], the Paying Agent) in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the register; provided, further, that a Holder with an aggregate principal amount in excess of $[] will be paid by wire transfer in
immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Company at least [ ] Business Days prior to the payment date.
SECTION 4.02. SEC Reports.
So long as any Securities are outstanding, the Company shall (i) file with the SEC within the time periods prescribed by its rules and regulations and (ii) furnish to the Trustee
and the Holders of the Securities within [ ] days after the date on which the Company would be required to file the same with the SEC pursuant to its rules and regulations (giving effect to any grace period provided by Rule 12b-25 under the Exchange
Act), all quarterly and annual financial information required to be furnished or filed with the SEC pursuant to Section 13 and Section 15(d) of the Exchange Act and, with respect to the annual consolidated financial statements only, a report thereon
by the Company's independent auditors. The Company also shall comply with the other provisions of TIA Section 314(a).
17
Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). The
Company shall not be required to file any report or other information with the SEC if the SEC does not permit such filing, although such reports shall be furnished to the Trustee. Documents filed by the Company with the SEC via the SEC's EDGAR
system (or any successor thereto) will be deemed furnished to the Trustee and the Holders of the Securities as of the time such documents are filed via EDGAR (or such successor).
SECTION 4.03. Compliance Certificate.
The Company shall deliver to the Trustee, within [ ] days after the end of each fiscal year of the Company, an officers certificate signed by two of the Company's officers stating
that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have
knowledge in reasonable detail and the efforts to remedy the same). For purposes of this Section 4.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture.
The Company shall deliver to the Trustee, within [ ] days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of Default described in
Section 6.01(e), (f), (g) or (h) and any event of which it becomes aware that with the giving of notice or the lapse of time would become such an Event of Default, its status and what action the Company is taking or proposes to take with respect
thereto. For the avoidance of doubt, a breach of a covenant under an Instrument that is not a payment default and that has not given rise to a right of acceleration under such Instrument shall not trigger the requirement to provide notice under this
paragraph.
18
SECTION 4.04. Stay, Extension and Usury Laws.
The Company 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 Indenture or the Securities; and the Company (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 4.05. Corporate Existence.
Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Subsidiary in accordance with the respective organizational documents of each Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.
SECTION 4.06. Taxes.
The Company shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by
appropriate proceedings.
SECTION 4.07. Additional Interest Notice.
In the event that the Company is required to pay additional interest to Holders of Securities pursuant to Section 6.02(b) hereof, the Company shall provide a direction or order in
the form of a written notice to the Trustee (and if the Trustee is not the Paying Agent, the Paying Agent) of the Company's obligation to pay such additional interest no later than [ ] Business Days prior to date on which any such additional
interest is scheduled to be paid. Such notice shall set forth the amount of additional interest to be paid by the Company on such payment date and direct the Trustee (or, if the Trustee is not the Paying Agent, the Paying Agent) to make payment to
the extent it receives funds from the Company to do so. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether additional interest is payable, or with respect to the nature, extent, or calculation of
the amount of additional interest owed, or with respect to the method employed in such calculation of additional interest.
SECTION 4.08. Further Instruments and Acts.
The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this
Indenture.
19
ARTICLE V
SUCCESSORS
SUCCESSORS
SECTION 5.01. When Company May Merge, Etc.
The Company shall not consolidate with, enter into a binding share exchange, or merge into any other Person in a transaction in which it is not the surviving entity, or sell,
assign, convey, transfer or lease or otherwise dispose of all or substantially all of its properties and assets to any Person (a "successor person"), unless:
(a) the successor person (if any) is a corporation, partnership, trust or other entity organized and validly
existing under the laws of the Republic of the Marshall Islands, [ ], the United States, any state of the United States or the District of Columbia and expressly assumes by a supplemental
indenture executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and any interest on, all Securities and the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(b) immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred
and be continuing; and
(c) the Company shall have delivered to the Trustee, prior to the consummation of the proposed transaction, an
Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, the
successor person formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor person has been named as the Company herein; provided, however, that the predecessor company in the case of a sale, lease, conveyance or other disposition of all or substantially
all of the assets of the Company shall not be released from the obligation to pay the principal of and interest, if any, on the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
"Event of Default," wherever used herein with respect to securities of any Series, means any one of the following events, unless in the establishing Board Resolution, supplemental
indenture or Officers' Certificate, it is provided that such Series shall not have the benefit of said Event of Default:
20
(a) default in the payment of any interest on any Security of that Series when it becomes due and payable, and
continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying Agent prior to the expiration of such period of 30 days); or
(b) default in the payment of any principal of any Security of that Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as due in respect of any Security of that
Series; or
(d) the Company fails to perform or comply with any of its other covenants or agreements contained in the
Securities or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clauses (a), (b) or (c) of this Section 6.01) and the default continues for 60 days after notice is given
as specified below;
(e) any indebtedness under any bond, debenture, note or other evidence of indebtedness for money borrowed by
the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by, or any other payment obligation of, the Company or any
Subsidiary (an "Instrument") with a principal amount then, individually or in the aggregate, outstanding in excess of $[], whether such indebtedness now exists or shall hereafter be created, is not paid at Maturity or when otherwise due or is
accelerated, and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least [ ]% in aggregate principal amount of the outstanding Securities of that Series a written notice specifying such default and requiring the Company to cause such indebtedness to be
discharged or cause such default to be cured or waived or such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder. A payment obligation (other than indebtedness under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the
Company or any Subsidiary) shall not be deemed to have matured, come due, or been accelerated to the extent that it is being disputed by the relevant obligor or obligors in good faith. For the avoidance of doubt, the Maturity of an Instrument is the
Maturity as set forth in that Instrument, as it may be amended from time to time in accordance with the terms of that Instrument;
(f) the Company or any Subsidiary fails to pay one or more final and non-appealable judgments entered by a
court or courts of competent jurisdiction, the aggregate uninsured or unbonded portion of which is in excess of $[], if the judgments are not paid, discharged, waived or stayed within [ ] days;
21
(g) the Company or any Subsidiary of the Company, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property;
or
(iv) makes a general assignment for the benefit of its creditors; or
(v) or generally is unable to pay its debts as the same become due; or
(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its Subsidiaries in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any of its Subsidiaries for all or substantially all of the
property of the Company or any such Subsidiary; or
(iii) orders the liquidation of the Company or any of its Subsidiaries;
and the case of each of clause (i), (ii) and (iii), the order or decree remains unstayed and in effect for [ ] consecutive days; or
(i) any other Event of Default provided with respect to Securities of that Series, which is specified in a
Board Resolution, a supplemental indenture hereto or an Officers' Certificate, in accordance with Section 2.02(i).
A default under clause (d) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least [ ]% in aggregate principal amount of the Securities
then outstanding notify the Company and the Trustee, in writing of the default, and the Company does not cure the default within 60 days after receipt of such notice. The notice given pursuant to this Section 6.01 must specify the default, demand
that it be remedied and state that the notice is a "Notice of Default." When any default under this Section 6.01 is cured, it ceases.
The Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate Trust Office of the
Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder.
SECTION 6.02. Acceleration of Maturity; Rescission and Annulment.
22
(a) If an Event of Default (other than an Event of Default specified in clause (g) or (h) of Section 6.01)
occurs and is continuing with respect to any Securities of any Series, then in every such case, the Trustee may, by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Securities of that Series (or, if any
Securities of that Series are Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) then outstanding may, by notice to the Company and the Trustee, declare all unpaid principal of, and accrued
and unpaid interest on to the date of acceleration, the Securities of that Series then outstanding (if not then due and payable) to be due and payable upon any such declaration, and the same shall become and be immediately due and payable. If an
Event of Default specified in clause (g) or (h) of Section 6.01 occurs, all unpaid principal of the Securities then outstanding, and all accrued and unpaid interest thereon to the date of acceleration, shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in aggregate principal amount of the Securities of that Series then outstanding by notice to the Trustee may rescind an acceleration
of such Securities of that Series and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which has become due solely by such declaration of acceleration, have been cured or waived; (b)
to the extent the payment of such interest is lawful, interest (calculated at the Default Rate) on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; (c) the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under Section 7.07 have been made. No such rescission shall affect any subsequent
default or impair any right consequent thereto.
(b) Notwithstanding any of provision of this Article 6, at the election of the Company in its sole discretion,
the sole remedy under this Indenture for an Event of Default relating to the failure to comply with Section 4.02, and for any failure to comply with the requirements of Section 314(a)(1) of the TIA, will consist, for the 180 days after the occurrence
of such an Event of Default, exclusively of the right to receive additional interest on the Securities at a rate equal to 0.50% per annum of the aggregate principal amount of the Securities then outstanding up to, but not including, the 181st day
thereafter (or, if applicable, the earlier date on which the Event of Default relating to Section 4.02 is cured or waived). Any such additional interest will be payable in the same manner and on the same dates as the stated interest payable on the
Securities. In no event shall additional interest accrue under the terms of this Indenture at a rate in excess of 0.50% per annum, in the aggregate, for any violation or default caused by the failure of the Company to be current in respect of its
Exchange Act reporting obligations. If the Event of Default is continuing on the 181st day after an Event of Default relating to a failure to comply with Section 4.02, the Securities will be subject to acceleration as provided in this Section 6.02.
The provisions of this Section 6.02(b) will not affect the rights of Holders in the event of the occurrence of any other Events of Default.
In order to elect to pay additional interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with Section
4.02 in accordance with the immediately preceding paragraph, the Company shall notify all Holders and the Trustee and Paying Agent of such election on or before the close of business on the fifth Business Day after the date on which such Event of
Default otherwise would occur. Upon a failure by the Company to timely give such notice or pay additional interest, the Securities will be immediately subject to acceleration as otherwise provided in this Section 6.02.
23
SECTION 6.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
If an Event of Default with respect to any Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
If an Event of Default in the payment of principal, interest, if any, specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount of principal, and accrued interest remaining unpaid, if any, together with, to the extent that payment of such interest is
lawful, interest on overdue principal, on overdue installments of interest, if any, in each case at the Default Rate, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal 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 the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or deliverable on any such claims and to
distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
24
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of 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 Holder in any such proceeding.
SECTION 6.05. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the
production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 6.06. Application of Money Collected.
Any money 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 money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: and
First: To the payment of all amounts due the Trustee under Section 7.07;
Second: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and
Third: To the Company.
SECTION 6.07. Limitation on Suits.
No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder (except actions for payment of overdue principal and interest), unless:
(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with
respect to the Securities of that Series;
(b) the Holders of not less than [ ]% in principal amount of the outstanding Securities of that Series shall
have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such request;
25
(d) the Trustee for [ ] days after its receipt of such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the Trustee during such [ ]-day
period by the Holders of a majority in principal amount of the outstanding Securities of that Series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such Holders.
SECTION 6.08. Unconditional Right of Holders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of
and interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 6.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.08, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders 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.
SECTION 6.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
26
SECTION 6.12. Control by Holders.
The Holders of a majority in principal amount of the outstanding Securities of any Series 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, with respect to the Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such
direction; and
(c) subject to the provisions of Section 6.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability or would be unduly prejudicial to the rights of another Holder or the
Trustee.
SECTION 6.13. Waiver of Past Defaults.
Subject to Section 9.02, the Holders of not less than a majority in principal amount of the outstanding Securities of any Series may on behalf of the Holders of all the Securities
of such Series waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders of a majority in
principal amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than [ ]% in
principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
27
ARTICLE VII
TRUSTEE
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise 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 person would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are specifically set forth in this Indenture and
no implied duties, covenants or obligations shall be deemed to be imposed upon the Trustee.
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon Officers' Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of this Indenture; however, in the case of any such Officers'
Certificates or Opinions of Counsel which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers' Certificates and Opinions of Counsel to determine whether or not they conform on
their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own its own negligent action, its own negligent
failure to act or willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of Section 7.01 herein.
(ii) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible
Officer.
(iii) The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken
by it with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding Securities of such Series relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b)
and (c) of this Section.
28
(e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives an indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree
in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk or expend its own funds or otherwise
incur liability, financial or otherwise, in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it
against such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent shall be entitled to the same rights,
indemnities, protections and immunities afforded to the Trustee.
(i) The Trustee shall have no duty to monitor the performance or compliance of the Company with its
obligations hereunder or any under supplement hereto, nor shall it have any liability in connection with the malfeasance or nonfeasance by the Company. The Trustee shall have no liability in connection with compliance by the Company with statutory
or regulatory requirements related to this Indenture, any supplement or any Securities issued pursuant hereto or thereto.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on and shall be fully protected in acting or refraining from acting as a
result of its reasonable belief that any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, direction, approval or other paper or document was genuine and had been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it sees fit.
(b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of
Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of, or
for the supervision of, any agent appointed with due care. No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
29
(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or
pursuant to this Indenture at the request, order or direction of any of the Holders of Securities, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction.
SECTION 7.03. Individual Rights of Trustee.
The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee is also subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities and the recitals contained herein and in the Securities shall be taken as
statements of the Company and not of the Trustee, and the Trustee has no responsibility for such recitals. The Trustee shall not be accountable for the Company's use or application of the proceeds from the Securities or for monies paid over to the
Company pursuant to this Indenture, and it shall not be responsible for any statement in the Securities other than its authentication.
SECTION 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if a Responsible Officer of the Trustee has knowledge or receives written
notice of such event, the Trustee shall mail to each Securityholder of the Securities of that Series, notice of a Default or Event of Default within [ ] days after it occurs or, if later, after a Responsible Officer of the Trustee has actual
knowledge of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, including any additional interest that may become payable pursuant to Section
6.02(b), the Trustee may withhold the notice so long as the Trustee in good faith determines that withholding the notice is in the interests of Securityholders of that Series.
SECTION 7.06. Reports by Trustee to Holders.
Within [ ] days after [ ] in each
year, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the register kept by the Registrar, a brief report dated as of such [], in accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each stock exchange on which the Securities of that Series are
listed. The Company shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange.
30
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation for its services as shall be agreed upon in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred by it. Such expenses shall include the reasonable compensation
and expenses of the Trustee's agents, counsel and other persons not regularly in its employ.
The Company shall indemnify, defend and hold harmless the Trustee and its officers, directors, employees, representatives and agents, from and against and reimburse the Trustee for
any and all claims, expenses, obligations, liabilities, losses, damages, injuries (to person, property, or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, reasonable costs and expenses (including reasonable
attorney's and agent's fees and expenses) of whatever kind or nature regardless of their merit, demanded, asserted or claimed against the Trustee directly or indirectly relating to, or arising from, claims against the Trustee by reason of its
participation in the transactions contemplated hereby, including without limitation all reasonable costs required to be associated with claims for damages to persons or property, and reasonable attorneys' and consultants' fees and expenses and court
costs except to the extent caused by the Trustee's negligence or willful misconduct. The provisions of this Section 7.07 shall survive the termination of this Agreement or the earlier resignation or removal of the Trustee. The Company shall defend
any claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld or delayed. This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any loss liability incurred by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee
through negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(f) or (g) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this
Section.
31
The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company. The Holders of a majority in principal amount of the Securities of any
Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or more Series does not take office within [ ] days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least [ ]% in principal amount of the Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer
all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.07, and subject to the payment of any and all amounts then due and owing to the retiring Trustee, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A successor Trustee shall mail a
notice of its succession to each Securityholder of each such Series. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring trustee
with respect to expenses and liabilities incurred by it prior to such replacement.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always have a combined capital and surplus of at
least $25,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b).
32
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TTA
Section 311(a) to the extent indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE; DEFEASANCE
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Order cease to be of further effect (except as hereinafter provided in this Section 8.01), and the Trustee, on the demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than Securities that have been
destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for cancellation have become due and
payable, or
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity within [ ], or
(3) are to be called for redemption within [ ]
under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or
(4) are deemed paid and discharged pursuant to section 8.03, as applicable; and the Company, in the
case of (1), (2) or (3) above, has deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case
may be;
33
(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each meeting
the applicable requirements of Sections 10.04 and 10.05 and each stating that all conditions precedent herein relating to the satisfaction and discharge of this Indenture have been complied with and the Trustee receives written demand from the
Company to discharge.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07, and, if money shall have been deposited with the
Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.04, 2.07, 2.08, 8.01 8.02 and 8.05 shall survive.
SECTION 8.02. Application of Trust Funds; Indemnification.
(a) Subject to the provisions of Section 8.05, all money deposited with the Trustee pursuant to Section 8.01,
all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.03 or 8.04 and all money received by the Trustee in respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund
payments or analogous payments as contemplated by Sections 8.03 or 8.04.
(b) The Company shall pay and shall indemnify the Trustee and the Agents against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.03 or 8.04 or the interest and principal received in respect of such obligations other than any payable by or on behalf of
Holders.
(c) The Trustee shall, in accordance with the terms of this Indenture, deliver or pay to the Company from time
to time, upon Company Request and at the expense of the Company any U.S. Government Obligations or Foreign Government Obligations or money held by it pursuant to this Indenture as provided in Sections 8.03 or 8.04 which, in the opinion of a
nationally recognized firm of independent certified public accountants, expressed in a written certification thereof and delivered to the Trustee together with such Company Request, are then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such U.S. Government Obligations or Foreign Government Obligations or money were deposited or received. This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations
or Foreign Government Obligations held under this Indenture.
34
SECTION 8.03. Legal Defeasance of Securities of any Series.
Unless this Section 8.03 is otherwise specified, pursuant to Section 2.02(s), to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and discharged
the entire indebtedness on all the outstanding Securities of such Series on the [ ] day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding Securities of such
Series, shall no longer be in effect (and the Trustee, at the expense of the company, shall, at Company Request, execute proper instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities of such Series to receive, from the trust funds described in
subparagraph (d) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Stated Maturity of such principal or installment of principal or interest and (ii) the
benefit of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such Series;
(b) the provisions of Sections 2.04, 2.07, 2.08, 2.14, 8.02, 8.03 and 8.05; and
(c) the rights, powers, trust and immunities of the Trustee hereunder; provided that, the following conditions
shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited irrevocably with the Paying Agent as trust
funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities in the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency),
money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Paying
Agent), not later than [ ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to
the Trustee and the Paying Agent, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest, if any, on all the Securities of such Series on the dates such installments of interest or
principal are due;
(e) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of such Series shall have occurred and be
continuing on the date of such deposit or during the period ending on the [ ] day after such date;
35
(g) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to the
effect that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not
made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such deposit constituting an investment company
(as defined in the Investment Company Act of 1940, as amended), or such trust shall be qualified under such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to the defeasance contemplated by this Section have been complied with.
SECTION 8.04. Covenant Defeasance.
Unless this Section 8.04 is otherwise specified pursuant to Section 2.02(s) to be inapplicable to Securities of any Series, on and after the [ ] day after the date of the deposit
referred to in subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections 4.02, 4.03, 4.04, 4.05, 4.06, and 5.01 as well as any additional covenants contained in a supplemental indenture
hereto for a particular Series of Securities or a Board Resolution or an Officers' Certificate delivered pursuant to Section 2.02(s) (and the failure to comply with any such covenants shall not constitute a Default or Event of Default under Section
6.01) and the occurrence of any event described in clause (e) of Section 6.01 shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, provided that the following conditions shall have been
satisfied:
(a) With reference to this Section 8.04, the Company has deposited or caused to be irrevocably deposited
(except as provided in Section 8.02(c)) with the Paying Agent as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of such Series
denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency
(other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax
liability will be imposed on such Paying Agent), not later than [ ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed
in a written certification thereof delivered to the Paying Agent, to pay principal and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series on the dates such installments of interest or principal are due;
36
(b) Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities of such Series shall have occurred and be
continuing on the date of such deposit or during the period ending on the [ ] day after such date;
(d) the company shall have delivered to the Trustee an Opinion of Counsel confirming that Holders of the
Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers' Certificate stating the deposit was not made
by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to the defeasance contemplated by this Section have been complied with.
SECTION 8.05. Repayment to Company.
The Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that remains unclaimed for two years. After that,
Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and all liability of the Paying Agent with respect to that money shall cease.
ARTICLE IX
AMENDMENTS AND WAIVERS
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
37
(c) to provide for uncertificated Securities in addition to or in place of certificated Securities;
(d) to make any change that does not adversely affect the rights of any Securityholder;
(e) to provide for the issuance of and establish the form and terms and conditions of Securities of any Series
as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to
the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;
(g) to comply with requirements of the TIA and any rules promulgated under the TIA; and
(h) to add to the covenants of the Company for the equal and ratable benefit of the Holders or to surrender
any right, power or option conferred upon the Company.
Any amendment or supplement made solely to conform the provisions of this Indenture or the Securities of any Series to the description thereof contained in the final prospectus
relating to such Series will be deemed not to adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders.
The Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities
of all Series affected by such supplemental indenture, taken together as one class (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), 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 Securityholders of each such Series. Except as provided in Section 6.13, the Holders of at
least a majority in principal amount of the outstanding Securities of all Series affected by such waiver by notice to the Trustee, taken together as one class (including consents obtained in connection with a tender offer or exchange offer for the
Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of Securities under this Section 9.02 to approve the particular form of any proposed supplemental indenture or waiver, but
it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this section becomes effective, the Company shall mail to the Holders of Securities affected thereby a notice briefly describing
the supplemental indenture or waiver. Any failure by the Company to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.
38
SECTION 9.03. Limitations.
Without the consent of each Securityholder affected, an amendment or waiver may not:
(a) change the amount of Securities whose Holders must consent to an amendment, supplement or waiver, except
to increase any such amount or to provide that certain provisions of this Indenture cannot be modified, amended or waived without the consent of the Holder of each outstanding Security affected thereby;
(b) reduce the amount of interest, or change the interest payment time, on any Security;
(c) waive a redemption payment or alter the redemption provisions (other than any alteration that would not
materially adversely affect the legal rights of any Holder under this Indenture) or the price at which the Company is required to offer to purchase the Securities;
(d) reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone
the date fixed for, the payment of any sinking fund or analogous obligation;
(e) reduce the principal amount payable of any Security upon Maturity;
(f) waive a Default or Event of Default in the payment of the principal of or interest, if any, on any
Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from such
acceleration);
(g) change the place or currency of payment of principal of or interest, if any, on any Security other than
that stated in the Security;
(h) impair the right of any Holder to receive payment of principal or, or interest on, the Securities of such
Holder on or after the due dates therefor;
(i) impair the right to institute suit for the enforcement of any payment on, or with respect to, any
Security;
(j) make any change in Sections 10.15 or 10.16;
(k) change the ranking of the Securities; or
(l) make any other change which is specified in a Board Resolution, a supplemental indenture hereto or an
Officers' Certificate as a limitation under this Section.
For the avoidance of doubt, any amendment or waiver shall always be subject to the consent of the Company.
SECTION 9.04. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect.
39
SECTION 9.05. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a
Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses (a)
through (g) of Section 9.03 in that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's
Security.
SECTION 9.06. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee and the Trustee may place an
appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company shall issue and the Trustee shall authenticate upon request new Securities of that
Series that reflect the changed terms.
SECTION 9.07. Trustee Protected.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel or an Officer's Certificate, or both stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights, duties or indemnities.
SECTION 9.08. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and each such supplemental indenture shall form part
of this Indenture for all purposes with respect to the relevant Series; and every Holder of Securities of the relevant Series theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
40
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or
deemed provision shall control.
SECTION 10.02. Notices.
Any notice or communication by the Company, the Trustee, the Paying Agent or the Registrar to another is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
[ ]
Attn: [ ]
Fax: [ ]
Attn: [ ]
Fax: [ ]
if to the Trustee:
if to the Registrar or Paying Agent:
[ ]
Attn: [ ]
Fax: [ ]
with copy to:
[ ]
Attn: [ ]
Fax: [ ]
The Company, the Trustee and each Agent by notice to each other may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by first-class mail to his address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any other Series.
41
If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it.
If the company mails a notice or communication to Securityholders, it will mail a copy to the Trustee and each Agent at the same time.
Whenever a notice is required to be given by the Company, such notice may be given by the Trustee or Registrar on the Company's behalf (and the Company will make any notice it is
required to give to Holders available on its website).
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this
Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of counsel, all such conditions precedent (including
any covenants, compliance with which constitutes a condition precedent) have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section
314(a)(4)) shall comply with the provisions of TIA Section 314(e) and 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;
42
(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.
provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials.
SECTION 10.06. Record Date for Vote or Consent of Holders.
The Company (or, in the event deposits have been made pursuant to Section 11.02, the Trustee) may set a record date for purposes of determining the identity of Holders entitled to
vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than [ ] days prior to the date of the commencement of solicitation of such action. Notwithstanding the provisions of
Section 9.05, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or
to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date.
SECTION 10.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and set reasonable requirements for
its functions.
SECTION 10.08. Legal Holidays.
Unless otherwise provided by Board Resolution, Officers' Certificate or supplemental indenture for a particular Series, a "Legal Holiday" is any day that is not a Business Day. If
a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 10.09. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the
Securities.
SECTION 10.10. Counterparts.
43
This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.
SECTION 10.11. Governing Laws and Submission to Jurisdiction.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCLUDING ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
The Company agrees that any legal suit, action or proceeding arising out of or based upon this Indenture may be instituted in any federal or state court sitting in New York City, and, to the fullest
extent permitted by law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such court in any suit, action or proceeding. The Company,
as long as any Securities remain outstanding or the parties hereto have any obligation under this Indenture, shall have an authorized agent in the United States upon whom process may be served in any such legal action or proceeding. Service of
process upon such agent and written notice of such service mailed or delivered to it shall to the extent permitted by law be deemed in every respect effective service of process upon it in any such legal action or proceeding and, if it fails to
maintain such agent, any such process or summons may be served by mailing a copy thereof by registered mail, or a form of mail substantially equivalent thereto, addressed to it at its address as provided for notices hereunder. The Company hereby
appoints Seward & Kissel LLP, One Battery Park Plaza, New York, NY, 10004, as its agent for such purposes, and covenants and agrees that service of process in any legal action or proceeding may be made upon it at such office of such agent.
SECTION 10.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 10.13. Successors.
All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor.
SECTION 10.14. Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 10.15. Table of Contents, Headings, Etc.
44
The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 10.16. Securities in a Foreign Currency or in ECU.
Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate delivered pursuant to Section 2.02 of this Indenture with respect to a
particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the
time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including ECUs), then the principal amount of Securities of such Series which shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section 10.16, "Market Exchange Rate" shall mean the noon Dollar
buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the
European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the "Journal"). If such Market Exchange Rate is not available for any reason with respect to such
currency, the Trustee shall use, without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or,
in the case of ECUs, rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question or, in the case of ECUs, in Luxembourg or such other quotations or, in the case of ECUs, rates of
exchange as the Trustee, upon consultation with the Company, shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than
Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole
discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders.
SECTION 10.17. Judgment Currency.
45
The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to
convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a
New York Banking Day, then, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking
Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall
short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day
except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.
| SECTION 10.18. | Compliance with Applicable Anti-Terrorism and Money Laundering Regulations. |
In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of
terrorist activities and money laundering ("Applicable Law"), the Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Trustee. Accordingly, each of
the parties agree to provide to the Trustee, upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with the Applicable Law.
ARTICLE XI
SINKING FUNDS
SINKING FUNDS
SECTION 11.01. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a Series, except as otherwise permitted or required by any form of
Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a "mandatory sinking fund payment" and any other
amount provided for by the terms of Securities of such Series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.02. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms of the securities of such Series.
46
SECTION 11.02. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1)
deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series to which such
sinking fund payment is applicable and which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received by the Registrar, together with an Officers'
Certificate with respect thereto, not later than [ ] days prior to the date on which the Registrar begins the process of selecting Securities for redemption, and shall be credited for such purpose by the Registrar at the price specified in such
Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 11.02,
the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $[], the Registrar need not call Securities of such Series for redemption, except upon receipt of a Company Order that
such action be taken, and such cash payment shall be held by the Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Paying Agent shall from time to time upon receipt of a Company Order pay over and
deliver to the Company any cash payment so being held by the Paying Agent upon delivery by the Company to the Registrar of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be
released to the Company.
SECTION 11.03. Redemption of Securities for Sinking Fund.
Not less than [ ] days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officers' Certificate in respect of a particular Series of Securities)
prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee and the Paying Agent an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that Series
pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant to Section
11.02., and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than [ ] days (unless otherwise indicated in
the Board Resolution, Officers' Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment
date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.03. Such notice having been duly given, the redemption of such
Securities shall stated in Sections 3.04, 3.05 and 3.06.
[The remainder of this page is intentionally left blank]
47
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
Euroseas Ltd.
By:__________________________
Name:
Its:
[ ]
as Trustee
By:__________________________
Name:
Its:
By:__________________________
Name:
Its:
[ ]
as Registrar and Paying Agent
as Registrar and Paying Agent
By:__________________________
Name:
Its:
By:__________________________
Name:
Its:
Exhibit 4.6
Euroseas Ltd.
FORM OF
SUBORDINATED INDENTURE
Dated as of [ ], 20[ ]
[ ]
Trustee
TABLE OF CONTENTS
PAGE
|
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
|
1
|
|
SECTION 1.01. Definitions.
|
1
|
|
SECTION 1.02. Other Definitions.
|
5
|
|
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
|
5
|
|
SECTION 1.04. Rules of Construction.
|
5
|
|
ARTICLE II THE SECURITIES
|
5
|
|
SECTION 2.01. Issuable in Series.
|
5
|
|
SECTION 2.02. Establishment of Terms of Series of Securities.
|
6
|
|
SECTION 2.03. Execution and Authentication.
|
7
|
|
SECTION 2.04. Registrar and Paying Agent.
|
8
|
|
SECTION 2.05. Paying Agent to Hold Money in Trust.
|
8
|
|
SECTION 2.06. Securityholder Lists.
|
9
|
|
SECTION 2.07. Transfer and Exchange.
|
9
|
|
SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities.
|
9
|
|
SECTION 2.09. Outstanding Securities.
|
10
|
|
SECTION 2.10. Treasury Securities.
|
10
|
|
SECTION 2.11. Temporary Securities.
|
11
|
|
SECTION 2.12. Cancellation.
|
11
|
|
SECTION 2.13. Defaulted Interest.
|
11
|
|
SECTION 2.14. Global Securities.
|
11
|
|
SECTION 2.15. CUSIP Numbers.
|
13
|
|
ARTICLE III REDEMPTION
|
13
|
|
SECTION 3.01. Notice to Trustee.
|
13
|
|
SECTION 3.02. Selection of Securities to be Redeemed.
|
13
|
|
SECTION 3.03. Notice of Redemption.
|
14
|
|
SECTION 3.04. Effect of Notice of Redemption.
|
14
|
|
SECTION 3.05. Deposit of Redemption Price.
|
14
|
|
SECTION 3.06. Securities Redeemed in Part.
|
14
|
|
ARTICLE IV COVENANTS
|
14
|
|
SECTION 4.01. Payment of Principal and Interest.
|
14
|
|
SECTION 4.02. SEC Reports.
|
15
|
|
SECTION 4.03. Compliance Certificate.
|
15
|
|
SECTION 4.04. Stay, Extension and Usury Laws.
|
16
|
|
SECTION 4.05. Corporate Existence.
|
16
|
|
SECTION 4.06. Taxes.
|
16
|
|
SECTION 4.07. Additional Interest Notice.
|
16
|
|
SECTION 4.08. Further Instruments and Acts.
|
16
|
|
ARTICLE V SUCCESSORS
|
17
|
|
SECTION 5.01. When Company May Merge, Etc.
|
17
|
|
SECTION 5.02. Successor Corporation Substituted.
|
17
|
|
ARTICLE VI DEFAULTS AND REMEDIES
|
17
|
|
SECTION 6.01. Events of Default.
|
17
|
|
SECTION 6.02. Acceleration of Maturity; Rescission and Annulment.
|
19
|
|
SECTION 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee.
|
20
|
|
SECTION 6.04. Trustee May File Proofs of Claim.
|
20
|
|
SECTION 6.05. Trustee May Enforce Claims Without Possession of Securities.
|
21
|
|
SECTION 6.06. Application of Money Collected.
|
21
|
|
SECTION 6.07. Limitation on Suits.
|
21
|
|
SECTION 6.08. Unconditional Right of Holders to Receive Principal and Interest.
|
22
|
|
SECTION 6.09. Restoration of Rights and Remedies.
|
22
|
|
SECTION 6.10. Rights and Remedies Cumulative.
|
22
|
|
SECTION 6.11. Delay or Omission Not Waiver.
|
22
|
|
SECTION 6.12. Control by Holders.
|
23
|
|
SECTION 6.13. Waiver of Past Defaults.
|
23
|
|
SECTION 6.14. Undertaking for Costs.
|
23
|
|
ARTICLE VII TRUSTEE
|
23
|
|
SECTION 7.01. Duties of Trustee.
|
23
|
|
SECTION 7.02. Rights of Trustee.
|
25
|
|
SECTION 7.03. Individual Rights of Trustee.
|
25
|
|
SECTION 7.04. Trustee's Disclaimer.
|
25
|
|
SECTION 7.05. Notice of Defaults.
|
25
|
|
SECTION 7.06. Reports by Trustee to Holders.
|
26
|
|
SECTION 7.07. Compensation and Indemnity.
|
26
|
|
SECTION 7.08. Replacement of Trustee.
|
27
|
|
SECTION 7.09. Successor Trustee by Merger, etc.
|
27
|
|
SECTION 7.10. Eligibility; Disqualification.
|
28
|
|
SECTION 7.11. Preferential Collection of Claims Against Company.
|
28
|
|
ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE
|
28
|
|
SECTION 8.01. Satisfaction and Discharge of Indenture.
|
28
|
|
SECTION 8.02. Application of Trust Funds; Indemnification.
|
29
|
|
SECTION 8.03. Legal Defeasance of Securities of any Series.
|
29
|
|
SECTION 8.04. Covenant Defeasance.
|
31
|
|
SECTION 8.05. Repayment to Company.
|
32
|
|
ARTICLE IX AMENDMENTS AND WAIVERS
|
32
|
|
SECTION 9.01. Without Consent of Holders.
|
32
|
|
SECTION 9.02. With Consent of Holders.
|
32
|
|
SECTION 9.03. Limitations.
|
33
|
|
SECTION 9.04. Compliance with Trust Indenture Act.
|
33
|
|
SECTION 9.05. Revocation and Effect of Consents.
|
34
|
|
SECTION 9.06. Notation on or Exchange of Securities.
|
34
|
|
SECTION 9.07. Trustee Protected.
|
34
|
|
SECTION 9.08. Effect of Supplemental Indenture.
|
34
|
|
ARTICLE X MISCELLANEOUS
|
34
|
|
SECTION 10.01. Trust Indenture Act Controls.
|
34
|
|
SECTION 10.02. Notices.
|
35
|
|
SECTION 10.03. Communication by Holders with Other Holders.
|
35
|
|
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
|
36
|
|
SECTION 10.05. Statements Required in Certificate or Opinion.
|
36
|
|
SECTION 10.06. Record Date for Vote or Consent of Holders.
|
36
|
|
SECTION 10.07. Rules by Trustee and Agents.
|
36
|
|
SECTION 10.08. Legal Holidays.
|
37
|
|
SECTION 10.09. No Recourse Against Others.
|
37
|
|
SECTION 10.10. Counterparts.
|
37
|
|
SECTION 10.11. Governing Laws and Submission to Jurisdiction.
|
37
|
|
SECTION 10.12. No Adverse Interpretation of Other Agreements.
|
37
|
|
SECTION 10.13. Successors.
|
37
|
|
SECTION 10.14. Severability.
|
38
|
|
SECTION 10.15. Table of Contents, Headings, Etc.
|
38
|
|
SECTION 10.16. Securities in a Foreign Currency or in ECU.
|
38
|
|
SECTION 10.17. Judgment Currency.
|
38
|
|
SECTION 10.18. Compliance with Applicable Anti-Terrorism and Money Laundering Regulations.
|
39
|
|
ARTICLE XI SINKING FUNDS
|
39
|
|
SECTION 11.01. Applicability of Article.
|
39
|
|
SECTION 11.02. Satisfaction of Sinking Fund Payments with Securities.
|
39
|
|
SECTION 11.03. Redemption of Securities for Sinking Fund.
|
40
|
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
Dated as of [ ], 20[ ]
|
Section 310(a)(1)
|
7.10
|
|
(a)(2)
|
7.10
|
|
(a)(3)
|
Not Applicable
|
|
(a)(4)
|
Not Applicable
|
|
(a)(5)
|
7.10
|
|
(b)
|
7.10
|
|
(c)
|
Not Applicable
|
|
Section 311(a)
|
7.11
|
|
(b)
|
7.11
|
|
(c)
|
Not Applicable
|
|
Section 312(a)
|
2.06
|
|
(b)
|
10.03
|
|
(c)
|
10.03
|
|
Section 313(a)
|
7.06
|
|
(b)(1)
|
7.06
|
|
(b)(2)
|
7.06
|
|
(c)(1)
|
7.06
|
|
(d)
|
7.06
|
|
Section 314(a)
|
4.02, 10.05
|
|
(b)
|
Not Applicable
|
|
(c)(1)
|
10.04
|
|
(c)(2)
|
10.04
|
|
(c)(3)
|
Not Applicable
|
|
(d)
|
Not Applicable
|
|
(e)
|
10.05
|
|
(f)
|
Not Applicable
|
|
Section 315(a)
|
7.01
|
|
(b)
|
7.05
|
|
(c)
|
7.01
|
|
(d)
|
7.01
|
|
(e)
|
6.14
|
|
Section 316(a)(1)(A)
|
6.12
|
|
(a)(1)(B)
|
6.13
|
|
(a)(2)
|
Not Applicable
|
|
(b)
|
6.13
|
|
(c)
|
10.06
|
|
Section 317(a)(1)
|
6.03
|
|
(a)(2)
|
6.04
|
|
(b)
|
2.05
|
|
Section 318(a)
|
10.01
|
Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.
Indenture dated as of [ ], 20[ ]
between Euroseas Ltd., a company organized under the laws of the Republic of the Marshall Islands (the "Company") and [ ] (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this
Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
DEFINITIONS AND INCORPORATION BY REFERENCE
| SECTION 1.01. | Definitions. |
"Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances
specified herein or therein, to be paid by the Company in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall
mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law
for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to
have been adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee.
"Business Day" means any day other than a (x) Saturday, (y) Sunday or (z) day on which state or federally chartered
banking institutions in New York, New York are not required to be open.
"Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated) equity of such Person, but excluding any debt securities convertible into such equity.
"Certificated Securities" means Securities in the form of physical, certificated Securities in registered form.
"Company" means the party named as such above until a successor replaces it in accordance with the terms of this
Indenture and thereafter means the successor.
1
"Company Order" means a written order signed in the name of the Company by two Officers, one of whom must be the
Company's principal executive officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the Company by its Chairman of the Board, a President or
a Vice President, and by its Chief Financial Officer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business
shall be principally administered which office at the date of the execution of this Indenture is [ ], Attention: [ ], or at such other address as the Trustee may designate from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy
Law.
"Default" or "default" means any event which is, or after notice or passage of time or both would be, an Event of
Default.
"Default Rate" means the default rate of interest specified in the Securities.
"Depository" means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of
one or more Global Securities, the person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, "Depository" as
used with respect to the Securities of any Series shall mean the Depository with respect to the Securities of such Series.
"Discount Security" means any Security that provides for an amount less than the stated principal amount thereof to be
due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the Commission of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a government other than the government of The United
States of America.
"Foreign Government Obligations" means with respect to Securities of any Series that are denominated in a Foreign
Currency, (i) direct obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by or acting as an
agency or instrumentality of such government the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) or (ii), are not callable or redeemable at the
option of the issuer thereof.
"Global Security" or "Global Securities" means a Security or Securities, as the
case may be, in the form established pursuant to Section 2.02 evidencing all or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee.
2
"Holder" or "Securityholder" means a person in whose name a Security is
registered.
"Indenture" means this Indenture as amended and supplemented from time to time and shall include the form and terms of
particular Series of Securities established as contemplated hereunder.
"Interest," in respect of the Securities, unless the context otherwise requires, refers to interest payable on the
Securities, including any additional interest that may become payable pursuant to Section 6.02(b).
"Maturity," when used with respect to any Security or installment of principal thereof, means the date on which the
principal of such Security or such installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect repayment or
otherwise.
"Officer" means the Chairman of the Board, the President, any Vice-President, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Company's principal
executive officer, principal financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is, and which opinion is, acceptable to the Trustee
and its counsel. Such legal counsel may be an employee of or counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint venture, association, limited liability company,
joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
"Principal" or "principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of, the Security.
"Responsible Officer" means any officer of the Trustee in its Corporate Trust Office and also means, any vice president,
managing director, director, associate, assistant vice president, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Security" or "Securities" means the debentures, notes or other debt instruments
of the Company of any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures, notes or
other debt instruments of the Company created pursuant to Sections 2.01 and 2.02 hereof.
"Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon,
means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
"Subordinated Indebtedness" means any indebtedness which is expressly subordinated to the indebtedness evidenced by
Securities.
3
"Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general
partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this
Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct obligations of The United States of America for the
payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of The United States of America the payment of which is unconditionally guaranteed as a full
faith and credit obligation by The United States of America, and which in the case of (i) and (ii) are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except
as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
| SECTION 1.02. | Other Definitions. |
|
TERM
|
DEFINED IN SECTION
|
|
"Applicable Law"
|
10.18
|
|
"Event of Default"
|
6.01
|
|
"Instrument"
|
6.01
|
|
"Journal"
|
10.16
|
|
"Judgment Currency"
|
10.17
|
|
"Legal Holiday"
|
10.08
|
|
"mandatory sinking fund payment"
|
11.01
|
|
"Market Exchange Rate"
|
10.16
|
|
"New York Banking Day"
|
10.17
|
|
"optional sinking fund payment"
|
11.01
|
|
"Paying Agent"
|
2.04
|
|
"Registrar"
|
2.04
|
|
"Required Currency"
|
10.17
|
|
"successor person"
|
5.01
|
|
"Temporary Securities"
|
2.11
|
4
| SECTION 1.03. | Incorporation by Reference of Trust Indenture Act. |
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. This Indenture shall
also include those provisions of the TIA required to be included herein by the provisions of the Trust Indenture Reform Act of 1990. The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein are used herein as so defined.
| SECTION 1.04. | Rules of Construction. |
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles;
(c) references to "generally accepted accounting principles" shall mean generally
accepted accounting principles in effect as of the time when and for the period as to which such accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural include the singular;
(f) provisions apply to successive events and transactions;
(g) references to agreements and other instruments include subsequent amendments thereto;
(h) the term "merger" includes a statutory share exchange, and the term "merged" has a
correlative meaning; and
(i) "herein," "hereof" and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision.
ARTICLE II
THE SECURITIES
THE SECURITIES
| SECTION 2.01. | Issuable in Series. |
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or
more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers' Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a
Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers' Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, maturity date,
record date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the
Indenture.
5
| SECTION 2.02. | Establishment of Terms of Series of Securities. |
At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection (a),
and either as to such Securities within the Series or as to the Series generally in the case of Subsections (b) through (t) by a Board Resolution, a supplemental indenture or an Officers' Certificate pursuant to authority granted under a Board
Resolution:
(a) the title, designation, aggregate principal amount and authorized denominations of
the Securities of the Series;
(b) the price or prices, (expressed as a percentage of the aggregate principal amount
thereof) at which the Securities of the Series will be issued;
(c) the date or dates on which the principal of the Securities of the Series is payable;
(d) the rate or rates (which may be fixed or variable) per annum or, if applicable, the
method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such
interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date;
(e) any optional or mandatory sinking fund provisions or conversion or exchangeability
provisions upon which Securities of the Series shall be redeemed, purchased, converted or exchanged;
(f) the date, if any, after which and the price or prices at which the Securities of the
Series may be optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory provisions;
(g) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Securities of the Series shall be issuable;
(h) if other than the full principal amount, the portion of the principal amount of the
Securities of the Series that shall be payable upon declaration of acceleration pursuant to Section 6.02 or provable in bankruptcy;
(i) any addition to or change in the Events of Default which applies to any Securities of
the Series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.02;
(j) the currency or currencies, including composite currencies, in which payments of
principal of, premium or interest, if any, on the Securities of the Series will be payable, if other than the currency of the United States of America;
(k) if payments of principal of, premium or interest, if any, on the Securities of the
Series will be payable, at the Company's election or at the election of any Holder, in a currency other than that in which the Securities of the Series are stated to be payable, the period or periods within which, and the terms and conditions upon
which, the election may be made;
(l) if payments of interest, if any, on the Securities of the Series will be payable, at
the Company's election or at the election of any Holder, in cash or additional securities, and the terms and conditions upon which the election may be made;
(m) if denominated in a currency or currencies other than the currency of the United
States of America, the equivalent price of the Securities of the Series in the currency of the United States of America for purposes of determining the voting rights of Holders of the Securities of the Series;
6
(n) if the amount of payments of principal, premium or interest may be determined with
reference to an index, formula or other method based on a coin or currency other than that in which the Securities of the Series are stated to be payable, the manner in which the amounts will be determined;
(o) any restrictive covenants or other material terms relating to the Securities of the
Series;
(p) whether the Securities of the Series will be issued in the form of global securities
or certificates in registered form;
(q) any terms with respect to subordination;
(r) any listing on any securities exchange or quotation system;
(s) additional provisions, if any, related to defeasance and discharge of the offered
debt securities; and
(t) the applicability of any guarantees, which would be governed by New York law.
All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to the Board Resolution, supplemental indenture or Officers' Certificate referred to above, and the authorized principal amount of any Series may not be increased to provide for issuance of additional Securities of such
Series, unless otherwise provided in such Board Resolution, supplemental Indenture or Officers' Certificate.
| SECTION 2.03. | Execution and Authentication. |
Two Officers shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution,
supplemental indenture hereto or Officers' Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized
agent or agents, which oral instructions shall be promptly confirmed in writing. Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers'
Certificate.
The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series
set forth in the Board Resolution, supplemental indenture hereto or Officers' Certificate delivered pursuant to Section 2.02, except as provided in Section 2.08.
Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.02) shall be fully protected in relying on: (a) the
Board Resolution, supplemental indenture hereto or Officers Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b)
an Officers' Certificate complying with Section 10.04, and (c) an Opinion of Counsel complying with Section 10.04.
The Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken; or (b) if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities.
7
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate.
If any successor that has replaced the Company in accordance with Article 5 has executed an indenture supplemental hereto with the Trustee pursuant to Section
5.01, any of the Securities authenticated or delivered prior to such transaction may, from time to time, at the request of such successor, be exchanged for other Securities executed in the name of the such successor with such changes in phraseology
and form as may be appropriate, but otherwise identical to the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon receipt of a Company Order of such successor, shall authenticate and deliver Securities as
specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of such successor pursuant to this provision of Section 2.03 in exchange or substitution for or upon
registration of transfer of any Securities, such successor, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities then outstanding for Securities authenticated and delivered in such new name.
| SECTION 2.04. | Registrar and Paying Agent. |
The Company shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.02, an
office or agency where Securities of such Series may be presented or surrendered for payment ("Paying Agent") and where Securities of such Series may be surrendered for registration of transfer or exchange ("Registrar"). The Registrar shall keep a
register with respect to each Series of Securities and to their transfer and exchange. The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar and Paying Agent. If
at any time the Company shall fail to maintain any such required Registrar or Paying Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations and surrenders may be made or served at the Corporate Trust Office
of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations and surrenders.
The Company may also from time to time designate one or more co-registrars or additional paying agents and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar or Paying Agent in each place so specified pursuant to Section 2.02 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar or additional paying agent. The term "Registrar" includes any co-registrar;
and the term "Paying Agent" includes any additional paying agent.
The Company hereby appoints [ ] as the initial Registrar and Paying Agent for each Series unless another Registrar or Paying Agent as the case may be,
is appointed prior to the time Securities of that Series are first issued. Each Registrar and Paying Agent shall be entitled to all of the rights, protections, exculpations and indemnities afforded to the Trustee in connection with its roles as
Registrar and Paying Agent.
| SECTION 2.05. | Paying Agent to Hold Money in Trust. |
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of
Securityholders of any Series of Securities all money held by it as Paying Agent.
8
| SECTION 2.06. | Securityholder Lists. |
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders
of each Series of Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least [ ] days before each interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of each Series of Securities.
| SECTION 2.07. | Transfer and Exchange. |
Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal
amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities
at the Registrar's request. Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge required by law; provided that this sentence
shall not apply to any exchange pursuant to Section 2.11, 2.08, 3.06 or 9.06.
Neither the Company nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at
the opening of business [ ] days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or
exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part.
All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such transfer or exchange. Any Registrar appointed pursuant to Section 2.04 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such
Registrar of Securities upon transfer or exchange of Securities. Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Security in
violation of any provision of this Indenture and/or applicable U.S. federal or state securities law.
| SECTION 2.08. | Mutilated, Destroyed, Lost and Stolen Securities. |
If any mutilated Security is surrendered to the Registrar, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Registrar (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Registrar that such Security has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
9
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company 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.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other
Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.
| SECTION 2.09. | Outstanding Securities. |
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds on the Maturity of Securities of a Series money sufficient to
pay such Securities payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
| SECTION 2.10. | Treasury Securities. |
In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction,
notice, consent or waiver Securities of a Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver only Securities of a Series that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.
10
| SECTION 2.11. | Temporary Securities. |
Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary securities upon a Company Order
("Temporary Securities"). Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall
prepare and the Trustee upon written request shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities. Until so exchanged, temporary securities shall have the same rights under this
Indenture as the definitive Securities.
| SECTION 2.12. | Cancellation. |
The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee or its agent
any Securities surrendered to them for transfer, exchange, payment or conversion. The Trustee and no one else shall cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, payment, conversion or
cancellation and shall deliver the cancelled Securities to the Company. No Security shall be authenticated in exchange for any Security cancelled pursuant to this Section 2.12.
The Company may, to the extent permitted by law, purchase Securities in the open market or by tender offer at any price or by private agreement. Any Securities
purchased or otherwise acquired by the Company or any of its Subsidiaries prior to the final maturity of such Securities may, to the extent permitted by law, be reissued or resold or may, at the option of the Company, be surrendered to the Trustee
for cancellation. Any Securities surrendered for cancellation may not be reissued or resold and shall be promptly cancelled by the Trustee, and the Company may not hold or resell such Securities or issue any new Securities to replace any such
Securities.
| SECTION 2.13. | Defaulted Interest. |
If the Company defaults in a payment of interest on a Series of Securities, it shall pay defaulted interest, plus, to the extent permitted by law, any interest
payable on the defaulted interest at the Default Rate, to the persons who are Security holders of the Series on a subsequent special record date. The Company shall fix the record date and payment date. At least [ ] days before the record date, the
Company shall mail to the Trustee and the Paying Agent and to each Securityholder of the Series a notice that states the record date, the payment date and the amount of interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
| SECTION 2.14. | Global Securities. |
(a) A Board Resolution, a supplemental indenture hereto or an Officers' Certificate shall
establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or Securities.
(b) (i) Notwithstanding
any provisions to the contrary contained in Section 2.07 of the Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.07 of the Indenture for Securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (A) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered
under the Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 90 days of such event, (B) the Company executes and delivers to the Trustee an Officers' Certificate to the effect that such Global Security shall
be so exchangeable or (C) an Event of Default with respect to the Securities represented by such Global Security shall have happened and be continuing.
11
(ii) Except as provided in this Section 2.14(b), a Global Security may
not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such a successor Depository.
(iii) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depository shall designate and shall bear the applicable legends provided for herein. Any Global Security to be exchanged in whole shall be surrendered by the Depository to the Trustee, as Registrar.
With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Registrar is acting as custodian for the Depository or its nominee with respect to such Global Security, the
principal amount thereof shall be reduced by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate
and deliver the Security issuable on such exchange to or upon the order of the Depository or an authorized representative thereof.
(iv) The registered Holder may grant proxies and otherwise authorize
any Person, including participants in the Depository and persons that may hold interests through participants in the Depository, to take any action which a Holder is entitled to take under this Indenture or the Securities.
(v) In the event of the occurrence of any of the events specified in
2.14(b)(i), the Company will promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons. If (A) an event described in Section 2.14(b)(i)(A) or (B) occurs and
definitive Certificated Securities are not issued promptly to all beneficial owners or (B) the Registrar receives from a beneficial owner instructions to obtain definitive Certificated Securities due to an event described in Section 2.14(b)(i)(C) and
definitive Certificated Securities are not issued promptly to any such beneficial owner, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.07 hereof, the right of any beneficial owner
of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner's Securities as if such definitive certificated Securities had been issued.
(vi) Notwithstanding any provision to the contrary in this Indenture,
so long as a Global Security remains outstanding and is held by or on behalf of the Depository, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Section 2.07, this
Section 2.14(b) and the rules and procedures of the Depository for such Global Security to the extent applicable to such transaction and as in effect from time to time.
(c) Any Global Security issued hereunder shall bear a legend in substantially the
following form:
"This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of
the Depository. This Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by
the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository."
12
(d) The Depository, as a Holder, may appoint agents and otherwise authorize participants
to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.
(e) Notwithstanding the other provisions of this Indenture, unless otherwise specified as
contemplated by Section 2.02, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof at their registered office.
(f) At all times the Securities are held in book-entry form with a Depository, (i) the
Trustee may deal with such Depository as the authorized representative of the Holders, (ii) the rights of the Holders shall be exercised only through the Depository and shall be limited to those established by law and agreement between the Holders
and the Depository and/or direct participants of the Depository, (iii) the Depository will make book-entry transfers among the direct participants of the Depository and will receive and transmit distributions of principal and interest on the
Securities to such direct participants; and (iv) the direct participants of the Depository shall have no rights under this Indenture, or any supplement hereto, under or with respect to any of the Securities held on their behalf by the Depository, and
the Depository may be treated by the Trustee and its agents, employees, officers and directors as the absolute owner of the Securities for all purposes whatsoever.
| SECTION 2.15. | CUSIP Numbers. |
The Company in issuing the Securities may use "CUSIP", "CCN", "ISIN" or other identification numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP", "CCN", "ISIN" or such other identification numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on
the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers.
ARTICLE III
REDEMPTION
REDEMPTION
| SECTION 3.01. | Notice to Trustee. |
The Company may, with respect to any series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the
Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the
Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee and Registrar in writing of the redemption date and the principal amount of Series of Securities to be redeemed.
The Company shall give the notice at least [ ] days before the redemption date (or such shorter notice as may be acceptable to the Trustee and Registrar).
| SECTION 3.02. | Selection of Securities to be Redeemed. |
Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers' Certificate, if less than all the Securities
of a Series are to be redeemed, the Registrar shall select the Securities of the Series to be redeemed in accordance with its customary procedures. The Registrar shall make the selection from Securities of the Series outstanding not previously
called for redemption. The Registrar may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000. Securities of the Series and portions of them it selects shall be in amounts of $1,000
or whole multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(g), the minimum principal denomination for each Series and integral multiples thereof. Provisions of this Indenture
that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption.
13
| SECTION 3.03. | Notice of Redemption. |
Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers' Certificate, at least [ ] days but not
more than [ ] days before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities of the Series to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption ceases to accrue on
and after the redemption date; and
(f) any other information as may be required by the terms of the particular Series or the
Securities of a Series being redeemed.
At the Company's written request, the Trustee shall distribute the notice of redemption prepared by the Company in the Company's name and at its expense.
| SECTION 3.04. | Effect of Notice of Redemption. |
Once notice of redemption is mailed or published as provided in Section 3.03, Securities of a Series called for redemption become due and payable on the
redemption date and at the redemption price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date.
| SECTION 3.05. | Deposit of Redemption Price. |
On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any,
on all Securities to be redeemed on that date.
| SECTION 3.06. | Securities Redeemed in Part. |
Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
COVENANTS
| SECTION 4.01. | Payment of Principal and Interest. |
The Company covenants and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and interest, if any, on the
Securities of that Series in accordance with the terms of such Securities and this Indenture.
14
Unless otherwise provided under the terms of a particular Series of Securities:
(a) an installment of principal or interest shall be considered paid on the date it is
due if the Paying Agent (other than the Company) holds by [ ] [a].m., New York City time, on that date money, deposited by the Company or an Affiliate thereof, sufficient to pay such installment. The Company shall (in immediately available
funds), to the fullest extent permitted by law, pay interest on overdue principal and overdue installments of interest at the rate borne by the Securities per annum; and
(b) payment of the principal of and interest on the Securities shall be made at the
office or agency of the Company maintained for that purpose in [ ] (which shall initially be [ ], the Paying Agent) in such coin or currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address appears in the
register; provided, further, that a Holder with an aggregate principal amount in excess of $[ ] will be paid by wire transfer in immediately available funds at the election of such Holder if such Holder
has provided wire transfer instructions to the Company at least [ ] Business Days prior to the payment date.
| SECTION 4.02. | SEC Reports. |
So long as any Securities are outstanding, the Company shall (i) file with the SEC within the time periods prescribed by its rules and regulations and (ii)
furnish to the Trustee and the Holders of the Securities within [ ] days after the date on which the Company would be required to file the same with the SEC pursuant to its rules and regulations (giving effect to any grace period provided by Rule
12b-25 under the Exchange Act), all quarterly and annual financial information required to be furnished or filed with the SEC pursuant to Section 13 and Section 15(d) of the Exchange Act and, with respect to the annual consolidated financial
statements only, a report thereon by the Company's independent auditors. The Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates). The Company shall not be required to file any report or other information with the SEC if the SEC does not permit such filing, although such reports shall be furnished to the Trustee. Documents filed by the Company with the SEC via
the SEC's EDGAR system (or any successor thereto) will be deemed furnished to the Trustee and the Holders of the Securities as of the time such documents are filed via EDGAR (or such successor).
| SECTION 4.03. | Compliance Certificate. |
The Company shall deliver to the Trustee, within [ ] days after the end of each fiscal year of the Company, an officers certificate signed by two of the
Company's officers stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge in reasonable detail and the efforts to remedy the same). For purposes of this Section 4.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the
terms of this Indenture.
15
The Company shall deliver to the Trustee, within [ ] days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of
Default described in Section 6.01(e), (f), (g) or (h) and any event of which it becomes aware that with the giving of notice or the lapse of time would become such an Event of Default, its status and what action the Company is taking or proposes to
take with respect thereto. For the avoidance of doubt, a breach of a covenant under an Instrument that is not a payment default and that has not given rise to a right of acceleration under such Instrument shall not trigger the requirement to provide
notice under this paragraph.
| SECTION 4.04. | Stay, Extension and Usury Laws. |
The Company 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 Indenture or the Securities; and the Company (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 4.05. | Corporate Existence. |
Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Subsidiary in accordance with the respective organizational documents of each Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.
| SECTION 4.06. | Taxes. |
The Company shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in
good faith and by appropriate proceedings.
| SECTION 4.07. | Additional Interest Notice. |
In the event that the Company is required to pay additional interest to Holders of Securities pursuant to Section 6.02(b) hereof, the Company shall provide a
direction or order in the form of a written notice to the Trustee (and if the Trustee is not the Paying Agent, the Paying Agent) of the Company's obligation to pay such additional interest no later than [ ] Business Days prior to date on which any
such additional interest is scheduled to be paid. Such notice shall set forth the amount of additional interest to be paid by the Company on such payment date and direct the Trustee (or, if the Trustee is not the Paying Agent, the Paying Agent) to
make payment to the extent it receives funds from the Company to do so. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether additional interest is payable, or with respect to the nature, extent,
or calculation of the amount of additional interest owed, or with respect to the method employed in such calculation of additional interest.
| SECTION 4.08. | Further Instruments and Acts. |
The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively
the purposes of this Indenture.
16
ARTICLE V
SUCCESSORS
SUCCESSORS
| SECTION 5.01. | When Company May Merge, Etc. |
The Company shall not consolidate with, enter into a binding share exchange, or merge into any other Person in a transaction in which it is not the surviving
entity, or sell, assign, convey, transfer or lease or otherwise dispose of all or substantially all of its properties and assets to any Person (a "successor person"), unless:
(a) the successor person (if any) is a corporation, partnership, trust or other entity
organized and validly existing under the laws of the Republic of the Marshall Islands, [ ], the United States, any state of the United States or the District of Columbia and expressly assumes by a supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and any interest on, all Securities and the performance or observance of every covenant of this Indenture on the part of the Company to
be performed or observed;
(b) immediately after giving effect to the transaction, no Default or Event of Default,
shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee, prior to the consummation of the
proposed transaction, an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture.
| SECTION 5.02. | Successor Corporation Substituted. |
Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance
with Section 5.01, the successor person formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if such successor person has been named as the Company herein; provided, however, that the predecessor company in the case of a sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company shall not be released from the obligation to pay the principal of and interest, if any, on the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
DEFAULTS AND REMEDIES
| SECTION 6.01. | Events of Default. |
"Event of Default," wherever used herein with respect to securities of any Series, means any one of the following events, unless in the establishing Board
Resolution, supplemental indenture or Officers' Certificate, it is provided that such Series shall not have the benefit of said Event of Default:
(a) default in the payment of any interest on any Security of that Series when it becomes
due and payable, and continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying Agent prior to the expiration of such period of 30 days); or
17
(b) default in the payment of any principal of any Security of that Series at its
Maturity; or
(c) default in the deposit of any sinking fund payment, when and as due in respect of any
Security of that Series; or
(d) the Company fails to perform or comply with any of its other covenants or agreements
contained in the Securities or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clauses (a), (b) or (c) of this Section 6.01) and the default continues for 60 days
after notice is given as specified below;
(e) any indebtedness under any bond, debenture, note or other evidence of indebtedness
for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by, or any other payment obligation
of, the Company or any Subsidiary (an "Instrument") with a principal amount then, individually or in the aggregate, outstanding in excess of $[ ], whether such indebtedness now exists or shall hereafter be created, is not paid at Maturity
or when otherwise due or is accelerated, and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within a period of 30 days after there shall have been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the Holders of at least [ ]% in aggregate principal amount of the outstanding Securities of that Series a written notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such default to be cured or waived or such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder. A payment obligation (other than indebtedness under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any Subsidiary) shall not be deemed to have matured, come due, or been accelerated to the extent that it is being disputed by the relevant obligor or obligors in good faith. For the avoidance of doubt, the Maturity
of an Instrument is the Maturity as set forth in that Instrument, as it may be amended from time to time in accordance with the terms of that Instrument;
(f) the Company or any Subsidiary fails to pay one or more final and non-appealable
judgments entered by a court or courts of competent jurisdiction, the aggregate uninsured or unbonded portion of which is in excess of $[ ], if the judgments are not paid, discharged, waived or stayed within [ ] days;
(g) the Company or any Subsidiary of the Company, pursuant to or within the meaning of
any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors; or
(v) or generally is unable to pay its debts as the same become due; or
18
(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(i) is for relief against the Company or any of its Subsidiaries in an
involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any of its Subsidiaries
for all or substantially all of the property of the Company or any such Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Subsidiaries;
and the case of each of clause (i), (ii) and (iii), the order or decree remains unstayed and in effect for [ ] consecutive days; or
(i) any other Event of Default provided with respect to Securities of that Series, which
is specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate, in accordance with Section 2.02(i).
A default under clause (d) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least [ ]% in aggregate principal
amount of the Securities then outstanding notify the Company and the Trustee, in writing of the default, and the Company does not cure the default within 60 days after receipt of such notice. The notice given pursuant to this Section 6.01 must
specify the default, demand that it be remedied and state that the notice is a "Notice of Default." When any default under this Section 6.01 is cured, it ceases.
The Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate
Trust Office of the Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder.
| SECTION 6.02. | Acceleration of Maturity; Rescission and Annulment. |
(a) If an Event of Default (other than an Event of Default specified in clause (g) or (h)
of Section 6.01) occurs and is continuing with respect to any Securities of any Series, then in every such case, the Trustee may, by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Securities of that Series
(or, if any Securities of that Series are Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) then outstanding may, by notice to the Company and the Trustee, declare all unpaid principal of,
and accrued and unpaid interest on to the date of acceleration, the Securities of that Series then outstanding (if not then due and payable) to be due and payable upon any such declaration, and the same shall become and be immediately due and
payable. If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs, all unpaid principal of the Securities then outstanding, and all accrued and unpaid interest thereon to the date of acceleration, shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in aggregate principal amount of the Securities of that Series then outstanding by notice to the Trustee may rescind
an acceleration of such Securities of that Series and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which has become due solely by such declaration of acceleration, have been
cured or waived; (b) to the extent the payment of such interest is lawful, interest (calculated at the Default Rate) on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration,
has been paid; (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under Section 7.07 have been made. No such rescission shall
affect any subsequent default or impair any right consequent thereto.
19
(b) Notwithstanding any of provision of this Article 6, at the election of the Company in
its sole discretion, the sole remedy under this Indenture for an Event of Default relating to the failure to comply with Section 4.02, and for any failure to comply with the requirements of Section 314(a)(1) of the TIA, will consist, for the 180 days
after the occurrence of such an Event of Default, exclusively of the right to receive additional interest on the Securities at a rate equal to 0.50% per annum of the aggregate principal amount of the Securities then outstanding up to, but not
including, the 181st day thereafter (or, if applicable, the earlier date on which the Event of Default relating to Section 4.02 is cured or waived). Any such additional interest will be payable in the same manner and on the same dates as the stated
interest payable on the Securities. In no event shall additional interest accrue under the terms of this Indenture at a rate in excess of 0.50% per annum, in the aggregate, for any violation or default caused by the failure of the Company to be
current in respect of its Exchange Act reporting obligations. If the Event of Default is continuing on the 181st day after an Event of Default relating to a failure to comply with Section 4.02, the Securities will be subject to acceleration as
provided in this Section 6.02. The provisions of this Section 6.02(b) will not affect the rights of Holders in the event of the occurrence of any other Events of Default.
In order to elect to pay additional interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to
comply with Section 4.02 in accordance with the immediately preceding paragraph, the Company shall notify all Holders and the Trustee and Paying Agent of such election on or before the close of business on the fifth Business Day after the date on
which such Event of Default otherwise would occur. Upon a failure by the Company to timely give such notice or pay additional interest, the Securities will be immediately subject to acceleration as otherwise provided in this Section 6.02.
| SECTION 6.03. | Collection of Indebtedness and Suits for Enforcement by Trustee. |
If an Event of Default with respect to any Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
If an Event of Default in the payment of principal, interest, if any, specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount of principal, and accrued interest remaining unpaid, if any, together with, to the extent that payment
of such interest is lawful, interest on overdue principal, on overdue installments of interest, if any, in each case at the Default Rate, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
| SECTION 6.04. | Trustee May File Proofs of Claim. |
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
20
(a) to file and prove a claim for the whole amount of principal 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 the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
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 Holder in any such proceeding.
| SECTION 6.05. | Trustee May Enforce Claims Without Possession of Securities. |
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
| SECTION 6.06. | Application of Money Collected. |
Any money 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 money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: and
First: To the payment of all amounts due the Trustee under Section 7.07;
Second: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and
Third: To the Company.
| SECTION 6.07. | Limitation on Suits. |
No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder (except actions for payment of overdue principal and interest), unless:
(a) such Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the Securities of that Series;
(b) the Holders of not less than [ ]% in principal amount of the outstanding Securities
of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
21
(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for [ ] days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the Trustee
during such [ ]-day period by the Holders of a majority in principal amount of the outstanding Securities of that Series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.
| SECTION 6.08. | Unconditional Right of Holders to Receive Principal and Interest. |
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment
of the principal of and interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
| SECTION 6.09. | Restoration of Rights and Remedies. |
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
| SECTION 6.10. | Rights and Remedies Cumulative. |
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.08, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders 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.
| SECTION 6.11. | Delay or Omission Not Waiver. |
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
22
| SECTION 6.12. | Control by Holders. |
The Holders of a majority in principal amount of the outstanding Securities of any Series 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, with respect to the Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction; and
(c) subject to the provisions of Section 6.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability or would be unduly prejudicial to the rights
of another Holder or the Trustee.
| SECTION 6.13. | Waiver of Past Defaults. |
Subject to Section 9.02, the Holders of not less than a majority in principal amount of the outstanding Securities of any Series may on behalf of the Holders of
all the Securities of such Series waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders
of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
| SECTION 6.14. | Undertaking for Costs. |
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than [ ]% in principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the Stated Maturity or
Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date).
ARTICLE VII
TRUSTEE
TRUSTEE
| SECTION 7.01. | Duties of Trustee. |
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise 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 person would exercise or use under the circumstances in the conduct of his own affairs.
23
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no implied duties, covenants or obligations shall be deemed to be imposed upon the Trustee.
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon Officers' Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of this Indenture; however, in
the case of any such Officers' Certificates or Opinions of Counsel which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers' Certificates and Opinions of Counsel to determine
whether or not they conform on their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own its own negligent action,
its own negligent failure to act or willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
Section 7.01 herein.
(ii) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer.
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding Securities of such Series relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject
to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or power unless it
receives an indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur liability, financial or otherwise, in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent shall be entitled to the
same rights, indemnities, protections and immunities afforded to the Trustee.
(i) The Trustee shall have no duty to monitor the performance or compliance of the
Company with its obligations hereunder or any under supplement hereto, nor shall it have any liability in connection with the malfeasance or nonfeasance by the Company. The Trustee shall have no liability in connection with compliance by the Company
with statutory or regulatory requirements related to this Indenture, any supplement or any Securities issued pursuant hereto or thereto.
24
| SECTION 7.02. | Rights of Trustee. |
(a) The Trustee may conclusively rely on and shall be fully protected in acting or
refraining from acting as a result of its reasonable belief that any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, direction, approval or other paper or document was genuine and had been signed or
presented by the proper person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it sees fit.
(b) Before the Trustee acts or refrains from acting, it may require an Officers'
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of, or for the supervision of, any agent appointed with due care. No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by or pursuant to this Indenture at the request, order or direction of any of the Holders of Securities, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such request or direction.
| SECTION 7.03. | Individual Rights of Trustee. |
The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with
the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee is also subject to Sections 7.10 and 7.11.
| SECTION 7.04. | Trustee's Disclaimer. |
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities and the recitals contained herein and in the Securities
shall be taken as statements of the Company and not of the Trustee, and the Trustee has no responsibility for such recitals. The Trustee shall not be accountable for the Company's use or application of the proceeds from the Securities or for monies
paid over to the Company pursuant to this Indenture, and it shall not be responsible for any statement in the Securities other than its authentication.
| SECTION 7.05. | Notice of Defaults. |
If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if a Responsible Officer of the Trustee has knowledge
or receives written notice of such event, the Trustee shall mail to each Securityholder of the Securities of that Series, notice of a Default or Event of Default within [ ] days after it occurs or, if later, after a Responsible Officer of the
Trustee has actual knowledge of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, including any additional interest that may become payable
pursuant to Section 6.02(b), the Trustee may withhold the notice so long as the Trustee in good faith determines that withholding the notice is in the interests of Securityholders of that Series.
25
| SECTION 7.06. | Reports by Trustee to Holders. |
Within [ ] days after [ ] in each year, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar, a brief report dated as of such [ ], in accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each stock exchange on which the Securities of
that Series are listed. The Company shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange.
| SECTION 7.07. | Compensation and Indemnity. |
The Company shall pay to the Trustee from time to time such compensation for its services as shall be agreed upon in writing. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents, counsel and other persons not regularly in its employ.
The Company shall indemnify, defend and hold harmless the Trustee and its officers, directors, employees, representatives and agents, from and against and
reimburse the Trustee for any and all claims, expenses, obligations, liabilities, losses, damages, injuries (to person, property, or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, reasonable costs and expenses
(including reasonable attorney's and agent's fees and expenses) of whatever kind or nature regardless of their merit, demanded, asserted or claimed against the Trustee directly or indirectly relating to, or arising from, claims against the Trustee by
reason of its participation in the transactions contemplated hereby, including without limitation all reasonable costs required to be associated with claims for damages to persons or property, and reasonable attorneys' and consultants' fees and
expenses and court costs except to the extent caused by the Trustee's negligence or willful misconduct. The provisions of this Section 7.07 shall survive the termination of this Agreement or the earlier resignation or removal of the Trustee. The
Company shall defend any claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld or delayed. This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any loss liability incurred by the Trustee or by any officer, director, employee, shareholder or
agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held
or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(f) or (g) occurs, the expenses and the compensation for
the services are intended to constitute expenses of administration under any Bankruptcy Law.
26
| SECTION 7.08. | Replacement of Trustee. |
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company. The Holders of a majority in principal amount of the
Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or more Series does not take office within [ ] days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least [ ]% in principal amount of the Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.07, and subject to the payment of any and all amounts then due and owing to the retiring Trustee, the resignation or
removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A
successor Trustee shall mail a notice of its succession to each Securityholder of each such Series. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring trustee with respect to expenses and liabilities incurred by it prior to such replacement.
| SECTION 7.09. | Successor Trustee by Merger, etc. |
If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.
27
| SECTION 7.10. | Eligibility; Disqualification. |
This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b).
| SECTION 7.11. | Preferential Collection of Claims Against Company. |
The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed
shall be subject to TTA Section 311(a) to the extent indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE; DEFEASANCE
SATISFACTION AND DISCHARGE; DEFEASANCE
| SECTION 8.01. | Satisfaction and Discharge of Indenture. |
This Indenture shall upon Company Order cease to be of further effect (except as hereinafter provided in this Section 8.01), and the Trustee, on the demand of
and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than
Securities that have been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation have become due and payable, or
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity within [
], or
(3) are to be called for redemption within [ ] under
arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or
(4) are deemed paid and discharged pursuant to section 8.03, as
applicable; and the Company, in the case of (1), (2) or (3) above, has deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable on or prior to the date of such deposit) or to the Stated
Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the
Company; and
28
(c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each meeting the applicable requirements of Sections 10.04 and 10.05 and each stating that all conditions precedent herein relating to the satisfaction and discharge of this Indenture have been complied with and the Trustee receives written
demand from the Company to discharge.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07, and, if money shall have
been deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.04, 2.07, 2.08, 8.01 8.02 and 8.05 shall survive.
| SECTION 8.02. | Application of Trust Funds; Indemnification. |
(a) Subject to the provisions of Section 8.05, all money deposited with the Trustee
pursuant to Section 8.01, all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.03 or 8.04 and all money received by the Trustee in respect of U.S. Government Obligations or
Foreign Government Obligations deposited with the Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to
make mandatory sinking fund payments or analogous payments as contemplated by Sections 8.03 or 8.04.
(b) The Company shall pay and shall indemnify the Trustee and the Agents against any tax,
fee or other charge imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.03 or 8.04 or the interest and principal received in respect of such obligations other than any payable
by or on behalf of Holders.
(c) The Trustee shall, in accordance with the terms of this Indenture, deliver or pay to
the Company from time to time, upon Company Request and at the expense of the Company any U.S. Government Obligations or Foreign Government Obligations or money held by it pursuant to this Indenture as provided in Sections 8.03 or 8.04 which, in the
opinion of a nationally recognized firm of independent certified public accountants, expressed in a written certification thereof and delivered to the Trustee together with such Company Request, are then in excess of the amount thereof which then
would have been required to be deposited for the purpose for which such U.S. Government Obligations or Foreign Government Obligations or money were deposited or received. This provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations or Foreign Government Obligations held under this Indenture.
| SECTION 8.03. | Legal Defeasance of Securities of any Series. |
Unless this Section 8.03 is otherwise specified, pursuant to Section 2.02(s), to be inapplicable to Securities of any Series, the Company shall be deemed to
have paid and discharged the entire indebtedness on all the outstanding Securities of such Series on the [ ] day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such
outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the company, shall, at Company Request, execute proper instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities of such Series to receive, from the trust funds
described in subparagraph (d) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Stated Maturity of such principal or installment of principal or interest and
(ii) the benefit of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such Series;
29
(b) the provisions of Sections 2.04, 2.07, 2.08, 2.14, 8.02, 8.03 and 8.05; and
(c) the rights, powers, trust and immunities of the Trustee hereunder; provided that, the
following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited irrevocably with the
Paying Agent as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities in the case of Securities of such Series denominated in
Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a
composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be
imposed on such Paying Agent), not later than [ ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee and the Paying Agent, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest, if any, on all the Securities of such Series on the dates such
installments of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit or during the period ending on the [ ] day after such date;
(g) the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel to the effect that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers' Certificate stating that
the deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the
Company;
(i) such deposit shall not result in the trust arising from such deposit constituting an
investment company (as defined in the Investment Company Act of 1940, as amended), or such trust shall be qualified under such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this Section have been complied with.
30
| SECTION 8.04. | Covenant Defeasance. |
Unless this Section 8.04 is otherwise specified pursuant to Section 2.02(s) to be inapplicable to Securities of any Series, on and after the [ ] day after
the date of the deposit referred to in subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections 4.02, 4.03, 4.04, 4.05, 4.06, and 5.01 as well as any additional covenants contained in a
supplemental indenture hereto for a particular Series of Securities or a Board Resolution or an Officers' Certificate delivered pursuant to Section 2.02(s) (and the failure to comply with any such covenants shall not constitute a Default or Event of
Default under Section 6.01) and the occurrence of any event described in clause (e) of Section 6.01 shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, provided that the following conditions
shall have been satisfied:
(a) With reference to this Section 8.04, the Company has deposited or caused to be
irrevocably deposited (except as provided in Section 8.02(c)) with the Paying Agent as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of
such Series denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no
tax liability will be imposed on such Paying Agent), not later than [ ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Paying Agent, to pay principal and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series on the dates such installments of interest or principal
are due;
(b) Such deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit or during the period ending on the [ ] day after such date;
(d) the company shall have delivered to the Trustee an Opinion of Counsel confirming that
Holders of the Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers' Certificate stating the
deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the
Company; and
(f) The Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated by this Section have been complied with.
31
| SECTION 8.05. | Repayment to Company. |
The Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that remains unclaimed for two years.
After that, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and all liability of the Paying Agent with respect to that money shall
cease.
ARTICLE IX
AMENDMENTS AND WAIVERS
AMENDMENTS AND WAIVERS
| SECTION 9.01. | Without Consent of Holders. |
The Company and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;
(d) to make any change that does not adversely affect the rights of any Securityholder;
(e) to provide for the issuance of and establish the form and terms and conditions of
Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;
(g) to comply with requirements of the TIA and any rules promulgated under the TIA; and
(h) to add to the covenants of the Company for the equal and ratable benefit of the
Holders or to surrender any right, power or option conferred upon the Company.
Any amendment or supplement made solely to conform the provisions of this Indenture or the Securities of any Series to the description thereof contained in the
final prospectus relating to such Series will be deemed not to adversely affect the rights of any Holder.
| SECTION 9.02. | With Consent of Holders. |
The Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the
outstanding Securities of all Series affected by such supplemental indenture, taken together as one class (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), 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 Securityholders of each such Series. Except as provided in Section
6.13, the Holders of at least a majority in principal amount of the outstanding Securities of all Series affected by such waiver by notice to the Trustee, taken together as one class (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series.
32
It shall not be necessary for the consent of the Holders of Securities under this Section 9.02 to approve the particular form of any proposed supplemental
indenture or waiver, but it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this section becomes effective, the Company shall mail to the Holders of Securities affected thereby a
notice briefly describing the supplemental indenture or waiver. Any failure by the Company to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or
waiver.
| SECTION 9.03. | Limitations. |
Without the consent of each Securityholder affected, an amendment or waiver may not:
(a) change the amount of Securities whose Holders must consent to an amendment,
supplement or waiver, except to increase any such amount or to provide that certain provisions of this Indenture cannot be modified, amended or waived without the consent of the Holder of each outstanding Security affected thereby;
(b) reduce the amount of interest, or change the interest payment time, on any Security;
(c) waive a redemption payment or alter the redemption provisions (other than any
alteration that would not materially adversely affect the legal rights of any Holder under this Indenture) or the price at which the Company is required to offer to purchase the Securities;
(d) reduce the principal or change the Stated Maturity of any Security or reduce the
amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;
(e) reduce the principal amount payable of any Security upon Maturity;
(f) waive a Default or Event of Default in the payment of the principal of or interest,
if any, on any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from
such acceleration);
(g) change the place or currency of payment of principal of or interest, if any, on any
Security other than that stated in the Security;
(h) impair the right of any Holder to receive payment of principal or, or interest on,
the Securities of such Holder on or after the due dates therefor;
(i) impair the right to institute suit for the enforcement of any payment on, or with
respect to, any Security;
(j) make any change in Sections 10.15 or 10.16;
(k) change the ranking of the Securities; or
(l) make any other change which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate as a limitation under this Section.
For the avoidance of doubt, any amendment or waiver shall always be subject to the consent of the Company.
| SECTION 9.04. | Compliance with Trust Indenture Act. |
Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as
then in effect.
33
| SECTION 9.05. | Revocation and Effect of Consents. |
Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in
any of clauses (a) through (g) of Section 9.03 in that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security.
| SECTION 9.06. | Notation on or Exchange of Securities. |
If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee and the
Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company shall issue and the Trustee shall authenticate upon request new
Securities of that Series that reflect the changed terms.
| SECTION 9.07. | Trustee Protected. |
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel or an Officer's Certificate, or both stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights, duties or indemnities.
| SECTION 9.08. | Effect of Supplemental Indenture. |
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and each such supplemental
indenture shall form part of this Indenture for all purposes with respect to the relevant Series; and every Holder of Securities of the relevant Series theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
| SECTION 10.01. | Trust Indenture Act Controls. |
If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the
TIA, such required or deemed provision shall control.
34
| SECTION 10.02. | Notices. |
Any notice or communication by the Company, the Trustee, the Paying Agent or the Registrar to another is duly given if in writing and delivered in person or
mailed by first-class mail:
if to the Company:
[ ]
Attn: [ ]
Fax: [ ]
Attn: [ ]
Fax: [ ]
if to the Trustee:
[ ]
Attn: [ ]
Fax: [ ]
Attn: [ ]
Fax: [ ]
if to the Registrar or Paying Agent:
[ ]
Attn: [ ]
Fax: [ ]
with copy to:
[ ]
Attn: [ ]
Fax: [ ]
The Company, the Trustee and each Agent by notice to each other may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by first-class mail to his address shown on the register kept by the Registrar. Failure to mail
a notice or communication to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the company mails a notice or communication to Securityholders, it will mail a copy to the Trustee and each Agent at the same time.
Whenever a notice is required to be given by the Company, such notice may be given by the Trustee or Registrar on the Company's behalf (and the Company will
make any notice it is required to give to Holders available on its website).
| SECTION 10.03. | Communication by Holders with Other Holders. |
Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their
rights under this Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).
35
| SECTION 10.04. | Certificate and Opinion as to Conditions Precedent. |
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of counsel, all such conditions
precedent (including any covenants, compliance with which constitutes a condition precedent) have been complied with.
| SECTION 10.05. | Statements Required in Certificate or Opinion. |
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant
to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and 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.
provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of
public officials.
| SECTION 10.06. | Record Date for Vote or Consent of Holders. |
The Company (or, in the event deposits have been made pursuant to Section 11.02, the Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than [ ] days prior to the date of the commencement of solicitation of such action.
Notwithstanding the provisions of Section 9.05, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date (or their duly designated proxies), and only those persons, shall be entitled to take
such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date.
| SECTION 10.07. | Rules by Trustee and Agents. |
The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and set
reasonable requirements for its functions.
36
| SECTION 10.08. | Legal Holidays. |
Unless otherwise provided by Board Resolution, Officers' Certificate or supplemental indenture for a particular Series, a "Legal Holiday" is any day that is not
a Business Day. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
| SECTION 10.09. | No Recourse Against Others. |
A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for
the issue of the Securities.
| SECTION 10.10. | Counterparts. |
This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement.
| SECTION 10.11. | Governing Laws and Submission to Jurisdiction. |
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCLUDING ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
The Company agrees that any legal suit, action or proceeding arising out of or based upon this Indenture may be instituted in any federal or state court sitting in New York City,
and, to the fullest extent permitted by law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such court in any suit, action or
proceeding. The Company, as long as any Securities remain outstanding or the parties hereto have any obligation under this Indenture, shall have an authorized agent in the United States upon whom process may be served in any such legal action or
proceeding. Service of process upon such agent and written notice of such service mailed or delivered to it shall to the extent permitted by law be deemed in every respect effective service of process upon it in any such legal action or proceeding
and, if it fails to maintain such agent, any such process or summons may be served by mailing a copy thereof by registered mail, or a form of mail substantially equivalent thereto, addressed to it at its address as provided for notices hereunder. The
Company hereby appoints Seward & Kissel LLP, One Battery Park Plaza, New York, NY, 10004, as its agent for such purposes, and covenants and agrees that service of process in any legal action or proceeding may be made upon it at such office of
such agent.
| SECTION 10.12. | No Adverse Interpretation of Other Agreements. |
This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
| SECTION 10.13. | Successors. |
All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
37
| SECTION 10.14. | Severability. |
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
| SECTION 10.15. | Table of Contents, Headings, Etc. |
The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
| SECTION 10.16. | Securities in a Foreign Currency or in ECU. |
Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate delivered pursuant to Section 2.02 of this
Indenture with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by
a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including ECUs), then the principal amount of Securities of such Series
which shall be deemed to be outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section 10.16, "Market Exchange Rate"
shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined
by the Commission of the European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the "Journal"). If such Market Exchange Rate is not available for any
reason with respect to such currency, the Trustee shall use, without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question or, in the case of ECUs, in Luxembourg or such other quotations or,
in the case of ECUs, rates of exchange as the Trustee, upon consultation with the Company, shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series
denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph
shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders.
| SECTION 10.17. | Judgment Currency. |
The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it
is necessary to convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of
exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered,
unless such day is not a New York Banking Day, then, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency
on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery
pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full
amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York
Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.
38
| SECTION 10.18. | Compliance with Applicable Anti-Terrorism and Money Laundering Regulations. |
In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those
relating to the funding of terrorist activities and money laundering ("Applicable Law"), the Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the
Trustee. Accordingly, each of the parties agree to provide to the Trustee, upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with the
Applicable Law.
ARTICLE XI
SINKING FUNDS
SINKING FUNDS
| SECTION 11.01. | Applicability of Article. |
The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a Series, except as otherwise permitted or
required by any form of Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a "mandatory sinking fund
payment" and any other amount provided for by the terms of Securities of such Series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment
may be subject to reduction as provided in Section 11.02. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms of the securities of such Series.
| SECTION 11.02. | Satisfaction of Sinking Fund Payments with Securities. |
The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of
such Securities (1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such
Series to which such sinking fund payment is applicable and which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application
of permitted optional sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received by the Registrar, together with
an Officers' Certificate with respect thereto, not later than [ ] days prior to the date on which the Registrar begins the process of selecting Securities for redemption, and shall be credited for such purpose by the Registrar at the price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.02, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $[ ], the Registrar need not call Securities of such Series for redemption, except upon receipt
of a Company Order that such action be taken, and such cash payment shall be held by the Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Paying Agent shall from time to time upon receipt of a Company
Order pay over and deliver to the Company any cash payment so being held by the Paying Agent upon delivery by the Company to the Registrar of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash
payment required to be released to the Company.
39
| SECTION 11.03. | Redemption of Securities for Sinking Fund. |
Not less than [ ] days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officers' Certificate in respect of a particular
Series of Securities) prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee and the Paying Agent an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment
for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant
to Section 11.02., and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than [ ] days (unless otherwise
indicated in the Board Resolution, Officers' Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.03. Such notice having been duly given, the
redemption of such Securities shall stated in Sections 3.04, 3.05 and 3.06.
[The remainder of this page is intentionally left blank]
40
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
|
Euroseas Ltd.
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Its:
|
||||
|
[ ]
as Trustee
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Its:
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Its:
|
||||
|
[ ]
as Registrar and Paying Agent |
||||
|
By:
|
||||
|
Name:
|
||||
|
Its:
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Its:
|
||||
Exhibit 5.1
|
Seward & Kissel llp
ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
|
||
|
TELEPHONE: (212) 574-1200
FACSIMILE: (212) 480-8421
WWW.SEWKIS.COM
|
901 K STREET, N.W.
WASHINGTON, D.C. 20001
TELEPHONE: (202) 737-8833
FACSIMILE: (202) 737-5184
|
|
|
December 29, 2022
|
Euroseas Ltd.
4 Messogiou & Evropis Street
151 25 Maroussi, Greece
Re: Euroseas Ltd.
Ladies and Gentlemen:
We have acted as counsel to Euroseas Ltd. (the "Company") in connection with the Company's registration statement on Form F-3 (File No. 333- ) (the
"Registration Statement") as filed with the U.S. Securities and Exchange Commission (the "Commission") on December 29, 2022, as thereafter amended or supplemented, with respect to the public offering by the Company (the "Offering") of up to an
aggregate of $400,000,000 of securities which may include common shares ("Common Shares"), preferred shares ("Preferred Shares"), debt securities ("Debt Securities"), warrants ("Warrants") and units ("Units" and, together with the Common Shares,
the Preferred Shares, the Debt Securities and the Warrants, the "Primary Securities").
We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the
Company (the "Prospectus") included in the Registration Statement; (iii) the form of senior indenture to be entered into by the Company (filed as Exhibit 4.5 to the Registration Statement), (iv) the form of subordinated indenture to be entered into
by the Company (filed as Exhibit 4.6 to the Registration Statement), and (v) each document incorporated or deemed to be incorporated by reference into the Registration Statement, and (vi) such corporate documents and records of the Company and such
other instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities to complete the execution of documents.
As to various questions of fact which are material to the opinions hereinafter expressed, we have relied upon statements or certificates of public officials, directors of the Company and others.
We have further assumed for the purposes of this opinion, without investigation, that (i) all documents contemplated by the Prospectus to be executed in
connection with the Offering have been duly authorized, executed and delivered by each of the parties thereto other than the Company, and (ii) the terms of the Offering comply in all respects with the terms, conditions and restrictions set forth in
the Prospectus and all of the instruments, agreements and other documents relating thereto or executed in connection therewith.
Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinion that:
1. Under the laws of the Republic of the Marshall Islands, the Primary Securities have been duly authorized, and when the Primary Securities,
other than Debt Securities and the Warrants, are issued, sold and paid for as contemplated in the Prospectus or any supplement thereto, will be validly issued, fully paid and non-assessable.
2. Under the laws of the Republic of the Marshall Islands, the Primary Securities consisting of Common Shares and Preferred Shares issuable under
the terms of an indenture, Warrants and as part of Units, when issued, sold and paid for as contemplated in the Prospectus or any supplement thereto, will be validly issued, fully paid and non-assessable.
3. Under the laws of the State of New York, the Debt Securities, when issued for value and delivered in accordance with the applicable indenture,
and upon due execution and delivery as contemplated in the Prospectus or any supplement thereto, will constitute legal, valid and binding obligations of the Company in accordance with their terms.
4. Under the laws of the State of New York, the Warrants, when issued pursuant to a validly executed warrant agreement substantially similar to
the Form of Warrant Agreement, will constitute the legal, valid and binding obligations of the Company in accordance with the terms of such warrant agreement.
This opinion is limited to the law of the State of New York and the Federal laws of the United States of America and the laws of the Republic of the Marshall
Islands as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to each reference to us and the discussions of advice provided
by us under the heading "Legal Matters" in the Prospectus, without admitting we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder with respect to any part of the
Registration Statement.
|
|
Very truly yours,
|
|
|
|
|
|
|
|
/s/ Seward & Kissel LLP
|
|
Exhibit 8.1
|
Seward & Kissel llp
ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
|
||
|
TELEPHONE: (212) 574-1200
FACSIMILE: (212) 480-8421
WWW.SEWKIS.COM
|
901 K STREET, N.W.
WASHINGTON, D.C. 20001
TELEPHONE: (202) 737-8833
FACSIMILE: (202) 737-5184
|
|
December 29, 2022
|
Euroseas Ltd.
4 Messogiou & Evropis Street
151 25 Maroussi, Greece
Re: Euroseas Ltd.
Ladies and Gentlemen:
You have requested our opinion regarding certain United States federal income tax matters relating to Euroseas Ltd. (the "Company")
and certain holders of shares of the Company's Common Stock, as described in the Registration Statement filed by the Company on Form F-3 (File No. 333- ) with the Securities and Exchange Commission on December 29, 2022, as thereafter
amended or supplemented (the "Registration Statement").
In formulating our opinion as to these matters, we have examined such documents as we have deemed appropriate, including the
Registration Statement and the prospectus of the Company (the "Prospectus") included in the Registration Statement. We also have obtained such additional information as we have deemed relevant and necessary from representatives of the Company.
Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement.
Based on the facts as set forth in the Registration Statement and the Company's annual report on Form 20-F for the fiscal year ended
December 31, 2021 (the "Annual Report"), which is incorporated by reference into the Registration Statement, and, in particular, on the representations, covenants, assumptions, conditions and qualifications described in the Registration
Statement under the sections entitled "United States Federal Income Tax Considerations" and "Marshall Islands Tax Considerations," under the section entitled "Tax Considerations" and in the risk factors set forth in the Annual Report entitled (i)
"United States tax authorities could treat us as a 'passive foreign investment company', which could have adverse United States federal income tax consequences to United States holders" and (ii) "We may have to pay tax on United States source income,
which would reduce our earnings.," we hereby confirm that the opinions with respect to United States federal income tax matters and Marshall Islands tax matters expressed therein accurately state our views as to the tax matters discussed therein.
Our opinions and the tax discussion as set forth in the Registration Statement are based on the current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service which may be cited or used as precedents, case law, and applicable provisions of Marshall Islands law related
to taxes, any of which may be changed at any time with retroactive effect. No opinion is expressed on any matters other than those specifically referred to above by reference to the Registration Statement and the Annual Report.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the references
to us in the Prospectus. In giving such consent, we do not hereby admit that we are "experts" within the meaning of the Act and the rules and regulations of the Commission promulgated thereunder with respect to any part of the Registration Statement.
|
|
Very truly yours,
|
|
|
|
|
|
|
|
/s/ Seward & Kissel LLP
|
|
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form F-3 of our report dated April 22, 2022, relating to the
consolidated financial statements of Euroseas Ltd., appearing in the Annual Report on Form 20-F of Euroseas Ltd. for the year ended December 31, 2021. We also consent to the reference to us under the heading "Experts" in such Registration Statement.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
December 29, 2022