Indenture With Covenants In Queens
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If a deed restriction is not enforceable, you can choose to ignore it and take on the risk of a neighbor filing suit, or you can seek out a judge's ruling to have the covenant removed from the deed. Obtaining that ruling is easier when no one is actively enforcing the covenant.
A covenant is a promise to take an action (an affirmative covenant) or to refrain from taking an action (a negative covenant). Indentures contain a variety of covenants from the issuer to the trustee on behalf of the bondholders.
For example, a positive covenant might require the issuer to disclose audit reports to creditors periodically or to insure its assets adequately. While positive or affirmative covenants do not limit the operations of a business, negative covenants materially limit a business' operations.
Bond covenants are designed to protect the interests of both parties. Negative or restrictive covenants forbid the issuer from undertaking certain activities; positive or affirmative covenants require the issuer to meet specific requirements.
Affirmative Bond Covenants Examples of affirmative covenants include requirements to maintain adequate levels of insurance, requirements to furnish audited financial statements to the lender, compliance with applicable laws, and maintenance of proper accounting books and credit rating, if applicable.
A contract between an Issuer and a Trustee (normally a commercial bank with trust powers) under which the Issuer issues Bonds and specifies their Maturities, Interest Rates, Redemption provisions, form, exchange provisions, security and other terms.
All bond covenants are part of a bond's legal documentation and are part of corporate bonds and government bonds. A bond's indenture is the portion that contains the covenants, both positive and negative, and is enforceable throughout the entire life of the bond until maturity.
(6) when, by reason of the fact that trust indentures are commonly prepared by the obligor or underwriter in advance of the public offering of the securities to be issued thereunder, such investors are unable to participate in the preparation thereof, and, by reason of their lack of understanding of the situation, such ...
The Trust Indenture Act requires certain prospectus disclosure about the debt securities in registered offerings. Most offerings of debt securities that are exempt from registration under the Securities Act of 1933 are also exempt from the Trust Indenture Act requirements.
