CITE

    15 USC Sec. 77ooo                                           01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2A - SECURITIES AND TRUST INDENTURES
    SUBCHAPTER III - TRUST INDENTURES

HEAD

    Sec. 77ooo. Duties and responsibility of the trustee

STATUTE

    (a) Duties prior to default
      The indenture to be qualified shall automatically be deemed
    (unless it is expressly provided therein that any such provision is
    excluded) to provide that, prior to default (as such term is
    defined in such indenture) -
        (1) the indenture trustee shall not be liable except for the
      performance of such duties as are specifically set out in such
      indenture; and
        (2) the indenture trustee may conclusively rely, as to the
      truth of the statements and the correctness of the opinions
      expressed therein, in the absence of bad faith on the part of
      such trustee, upon certificates or opinions conforming to the
      requirements of the indenture;
    but the indenture trustee shall examine the evidence furnished to
    it pursuant to section 77nnn of this title to determine whether or
    not such evidence conforms to the requirements of the indenture.
    (b) Notice of defaults
      The indenture trustee shall give to the indenture security
    holders, in the manner and to the extent provided in subsection (c)
    of section 77mmm of this title, notice of all defaults known to the
    trustee, within ninety days after the occurrence thereof: Provided,
    That such indenture shall automatically be deemed (unless it is
    expressly provided therein that such provision is excluded) to
    provide that, except in the case of default in the payment of the
    principal of or interest on any indenture security, or in the
    payment of any sinking or purchase fund installment, the trustee
    shall be protected in withholding such notice if and so long as the
    board of directors, the executive committee, or a trust committee
    of directors and/or responsible officers, of the trustee in good
    faith determine that the withholding of such notice is in the
    interests of the indenture security holders.
    (c) Duties of the trustee in case of default
      The indenture trustee shall exercise in case of default (as such
    term is defined in such indenture) such of the rights and powers
    vested in it by such indenture, and to use the same degree of care
    and skill in their exercise, as a prudent man would exercise or use
    under the circumstances in the conduct of his own affairs.
    (d) Responsibility of the trustee
      The indenture to be qualified shall not contain any provisions
    relieving the indenture trustee from liability for its own
    negligent action, its own negligent failure to act, or its own
    willful misconduct, except that -
        (1) such indenture shall automatically be deemed (unless it is
      expressly provided therein that any such provision is excluded)
      to contain the provisions authorized by paragraphs (1) and (2) of
      subsection (a) of this section;
        (2) such indenture shall automatically be deemed (unless it is
      expressly provided therein that any such provision is excluded)
      to contain provisions protecting the indenture trustee from
      liability for any error of judgment made in good faith by a
      responsible officer or officers of such trustee, unless it shall
      be proved that such trustee was negligent in ascertaining the
      pertinent facts; and
        (3) such indenture shall automatically be deemed (unless it is
      expressly provided therein that any such provision is excluded)
      to contain provisions protecting the indenture trustee with
      respect to any action taken or omitted to be taken by it in good
      faith in accordance with the direction of the holders of not less
      than a majority in principal amount of the indenture securities
      at the time outstanding (determined as provided in subsection (a)
      of section 77ppp of this title) relating to the time, method, and
      place of conducting any proceeding for any remedy available to
      such trustee, or exercising any trust or power conferred upon
      such trustee, under such indenture.
    (e) Undertaking for costs
      The indenture to be qualified shall automatically be deemed
    (unless it is expressly provided therein that any such provision is
    excluded) to contain provisions to the effect that all parties
    thereto, including the indenture security holders, agree that the
    court may in its discretion require, in any suit for the
    enforcement of any right or remedy under such indenture, or in any
    suit against the trustee for any action taken 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
    attorney's 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: Provided, That the provisions of this
    subsection shall not apply to any suit instituted by such trustee,
    to any suit instituted by any indenture security holder, or group
    of indenture security holders, holding in the aggregate more than
    10 per centum in principal amount of the indenture securities
    outstanding, or to any suit instituted by any indenture security
    holder for the enforcement of the payment of the principal of or
    interest on any indenture security, on or after the respective due
    dates expressed in such indenture security.

SOURCE

    (May 27, 1933, ch. 38, title III, Sec. 315, as added Aug. 3, 1939,
    ch. 411, 53 Stat. 1171; amended Pub. L. 101-550, title IV, Sec.
    414, Nov. 15, 1990, 104 Stat. 2730.)

AMENDMENTS

      1990 - Subsec. (a). Pub. L. 101-550, Sec. 414(1), (2),
    substituted "The indenture to be qualified shall automatically be
    deemed (unless it is expressly provided therein that any such
    provision is excluded) to" for "The indenture to be qualified may"
    and "the indenture trustee shall examine" for "such indenture shall
    contain provisions requiring the indenture trustee to examine".
      Subsec. (b). Pub. L. 101-550, Sec. 414(3), (4), substituted "The
    indenture trustee shall" for "The indenture to be qualified shall
    contain provisions requiring the indenture trustee to" and "That
    such indenture shall automatically be deemed (unless it is
    expressly provided therein that such provision is excluded) to" for
    "That such indenture may".
      Subsec. (c). Pub. L. 101-550, Sec. 414(3), substituted "The
    indenture trustee shall" for "The indenture to be qualified shall
    contain provisions requiring the indenture trustee to".
      Subsec. (d)(1) to (3). Pub. L. 101-550, Sec. 414(5), substituted
    "such indenture shall automatically be deemed (unless it is
    expressly provided therein that any such provision is excluded) to"
    for "such indenture may".
      Subsec. (e). Pub. L. 101-550, Sec. 414(1), substituted "The
    indenture to be qualified shall automatically be deemed (unless it
    is expressly provided therein that any such provision is excluded)
    to" for "The indenture to be qualified may".