EXHIBIT 4.1
FORM OF PREFERRED SECURITIES CERTIFICATE
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A
NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS
PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE
BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF
DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC TO CAPSTEAD MORTGAGE TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND SUCH PREFERRED SECURITIES OR ANY INTEREST
THEREIN MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED
SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES
FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED
SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
TRUST, OR (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
PURCHASER" (AS DEFINED IN SECTION 2(A)(51) OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED
SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
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THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY
INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
PRINCIPAL OF OR INTEREST ON SUCH PREFERRED SECURITIES, OR ANY INTEREST THEREIN,
AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN
SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN
ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY
OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE PREFERRED SECURITIES OR
ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF
SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.
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CERTIFICATE NUMBER: P-__ THIRTY FIVE MILLION AGGREGATE LIQUIDATION AMOUNT
PREFERRED SECURITIES
CUSIP NO.
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CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
CAPSTEAD MORTGAGE TRUST I
PREFERRED SECURITIES
(LIQUIDATION AMOUNT $1,000 PER PREFERRED SECURITY)
Capstead Mortgage Trust I, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Holder") is the registered owner of 35,000 Preferred
Securities [IF THE PREFERRED SECURITY IS A GLOBAL SECURITY, THEN INSERT - or
such other number of Preferred Securities represented hereby as may be set forth
in the records of the Securities Registrar hereinafter referred to in accordance
with the Trust Agreement (as defined below)] of the Trust representing an
undivided preferred beneficial interest in the assets of the Trust and
designated the Capstead Mortgage Trust I Preferred Securities, (liquidation
amount $1,000 per Preferred Security) (the "Preferred Securities"). Subject to
the terms of the Trust Agreement (as defined below), the Preferred Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.7 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust, dated as of September 26, 2005 as the
same may be amended from time to time (the "Trust Agreement"), among Capstead
Mortgage Corporation, as Depositor, Wells Fargo Bank, National Association, as
Property Trustee, Wells Fargo Delaware Trust Company, as Delaware Trustee, the
Administrative Trustees named therein and the Holders, from time to time, of
Trust Securities. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Property Trustee at its
Corporate Trust Office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and
is entitled to the benefits thereunder.
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This Preferred Securities Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
All capitalized terms used but not defined in this Preferred Securities
Certificate are used with the meanings specified in the Trust Agreement,
including the Schedules and Exhibits thereto.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed
on behalf of the Trust this certificate this ___ day of ___________, 2005.
CAPSTEAD MORTGAGE TRUST I
By:
---------------------------------
Name:
Administrative Trustee
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
Dated:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Property Trustee
By:
-------------------------------
Authorized signatory
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[FORM OF REVERSE OF SECURITY]
The Trust promises to pay Distributions from September 26, 2005, or
from the most recent Distribution Date to which Distributions have been paid or
duly provided for, quarterly in arrears on January 30, April 30, July 30 and
October 30 of each year, commencing on October 30, 2005, at a fixed rate equal
to 8.19% per annum through the interest payment date on October 30, 2015 ("Fixed
Rate Period") and thereafter at a variable rate equal to LIBOR plus 3.5% per
annum of the Liquidation Amount of the Preferred Securities represented by this
Preferred Securities Certificate, together with any Additional Interest Amounts,
in respect to such period.
Distributions on the Trust Securities shall be made by the Paying
Agent from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Distributions.
Distributions on the Securities must be paid on the dates payable to
the extent that the Trust has funds available for the payment of such
Distributions in the Payment Account of the Trust. The Trust's funds available
for Distribution to the Holders of the Preferred Securities will be limited to
payments received from the Depositor.
During an Event of Default, the Depositor shall not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Depositor's capital stock or
(ii) make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Depositor that rank pari
passu in all respects with or junior in interest to the Notes (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Depositor in connection with (1) any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or stockholder
stock purchase plan or (3) the issuance of capital stock of the Depositor (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to such Event of
Default, (b) as a result of an exchange or conversion of any class or series of
the Depositor's capital stock (or any capital stock of a Subsidiary (as defined
in the Indenture) of the Depositor) for any class or series of the Depositor's
capital stock or of any class or series of the Depositor's indebtedness for any
class or series of the Depositor's capital stock, (c) the purchase of fractional
interests in shares of the Depositor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any Rights Plan
(as defined in the Indenture), the issuance of rights, stock or other property
under any Rights Plan, or the redemption or repurchase of rights pursuant
thereto or (e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).
On each Note Redemption Date, on the stated maturity (or any date of
principal repayment upon early maturity) of the Notes and on each other date on
(or in respect of) which any principal on the Notes is repaid, the Trust will be
required to redeem a Like Amount of Trust
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Securities at the Redemption Price. Under the Indenture, the Notes may be
redeemed by the Depositor on any Interest Payment Date, at the Depositor's
option, on or after October 30, 2010 in whole or in part from time to time at
the Optional Note Redemption Price of the principal amount thereof or the
redeemed portion thereof, as applicable, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, to but
excluding the date fixed for redemption. The Notes may also be redeemed by the
Depositor, at its option, at any time, in whole but not in part, upon the
occurrence of an Investment Company Event or a Tax Event at the Special Note
Redemption Price; provided, that such Investment Company Event or a Tax Event is
continuing on the Redemption Date.
The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Notes. Redemptions of the Trust Securities
(or portion thereof) shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Redemption Price.
Payments of Distributions (including any Additional Interest
Amounts), the Redemption Price, Liquidation Amount or any other amounts in
respect of the Preferred Securities shall be made by wire transfer at such place
and to such account at a banking institution in the United States as may be
designated in writing at least ten (10) Business Days prior to the date for
payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case
such payments shall be made by check mailed to the address of such Person as
such address shall appear in the Security Register. If any Preferred Securities
are held by a Depositary, such Distributions shall be made to the Depositary in
immediately available funds.
The indebtedness evidenced by the Notes is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt (as defined in the Indenture), and this
Security is issued subject to the provisions of the Indenture with respect
thereto.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Securities Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _______________________
Signature: _________________________________________________________________
(Sign exactly as your name appears on the other side of this
Preferred Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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