RISK FACTORS
Participating in the exchange offer is subject to a number of risks. You should carefully consider the risks and
uncertainties set forth below and the risks and uncertainties incorporated by reference in this prospectus, including the information included under "Risk Factors" in our Annual Report on
Form 10-K for the year ended December 31, 2016 and other documents that we subsequently file with the SEC.
Risks Related to the Exchange Offer and Holding the New Notes
Holders who fail to exchange their old notes will continue to be subject to restrictions on transfer.
If you do not exchange your old notes for new notes in the exchange offer, you will continue to be subject to the restrictions on transfer of
your old notes described in the legend on the certificates for your old notes. The restrictions on transfer of your old notes arise because we issued the old notes under exemptions from, or in
transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, you may only offer or sell the old notes if they are registered under
the Securities Act and applicable state securities laws, or offered and sold under an exemption from these requirements. We do not plan to register the old notes under the Securities Act. For further
information regarding the consequences of not tendering your old notes in the exchange offer, see the discussion below under the caption "The Exchange OfferConsequences of Exchanging or
Failing to Exchange Old Notes."
You must comply with the exchange offer procedures in order to receive freely tradable new notes.
Delivery of new notes in exchange for old notes tendered and accepted for exchange pursuant to the exchange offer will be made only after timely
receipt by the exchange agent of the following:
-
-
certificates for old notes or a book-entry confirmation of a book-entry transfer of old notes into the exchange agent's account at DTC, New
York, New York, as depository;
-
-
a completed and signed letter of transmittal (or facsimile thereof), with any required signature guarantees, or an agent's message in lieu of
the letter of transmittal; and
-
-
any other documents required by the letter of transmittal.
Therefore,
holders of old notes who would like to tender old notes in exchange for new notes should be sure to allow enough time for the old notes to be delivered on time. We are not
required to notify you of defects or irregularities in tenders of old notes for exchange. Old notes that are not tendered or that are tendered but we do not accept for exchange will, following
consummation of the exchange offer, continue to be subject to the existing transfer restrictions under the Securities Act and, upon consummation of the exchange offer, certain registration and other
rights under the registration rights agreement will terminate. See "The Exchange OfferExchange Offer Procedures" and "The Exchange OfferConsequences of Exchanging or Failing
to Exchange Old Notes."
Some holders who exchange their old notes may be deemed to be underwriters and these holders will be required
to comply with the registration and prospectus delivery requirements in connection with any resale transaction.
If you exchange your old notes in the exchange offer for the purpose of participating in a distribution of the new notes, you may be deemed to
have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.
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Our debt could adversely affect our business.
As of December 31, 2016, after giving effect to this exchange offer, our consolidated indebtedness would have been approximately
$4.9 billion. Our debt burden could have important consequences, including: increasing our vulnerability to general adverse economic and industry conditions; limiting our flexibility in
planning for, or reacting to, changes in our business and our industry; requiring the dedication of a substantial portion of any cash flow from operations for the payment of principal and interest on,
our indebtedness, thereby reducing the availability of cash flow to fund our operations, growth strategy, working capital, capital expenditures, future business
opportunities, and other general corporate purposes; exposing us to the risk of increased interest rates with respect to any borrowings that are at floating rates of interest; restricting us from
making strategic acquisitions or causing us to make non-strategic divestitures; limiting our ability to obtain additional financing for working capital, capital expenditures, research and development,
acquisitions and general corporate or other purposes; limiting our ability to adjust to changing market conditions; and placing us at a competitive disadvantage relative to our competitors who are
less highly leveraged. In addition, a significant portion of our cash and investments are held outside the United States, and we may not be able to service our debt without undergoing the costs of
repatriating those funds.
The agreements governing our debt, including the new notes, contain various covenants that impose
restrictions on us that may affect our ability to operate our business.
Agreements governing our indebtedness, including our Credit Agreement and the indentures governing our notes, impose operating and financial
restrictions on our activities. These restrictions require us to comply with or maintain certain financial tests and ratios. In addition, under certain circumstances our, Credit Agreement and
indentures may limit or prohibit our ability to, among other things: incur additional debt and guarantees; pay distributions or dividends and repurchase stock; make other restricted payments,
including without limitation, certain investments; create liens; enter into agreements that restrict dividends from subsidiaries; engage in transactions with affiliates; and enter into mergers,
consolidations or sales of substantially all of our assets. In addition, we are required to maintain a maximum total net debt ratio calculated pursuant to a financial maintenance covenant under our
credit agreement. Further, various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants. Failure to comply with any of the covenants in our
financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. Such a default would permit lenders to accelerate the maturity of
the debt under these agreements. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, including our obligations under our Credit
Agreement or the indentures governing our notes. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly
impair our ability to obtain other financing. There can be no assurances that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these
agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.
If we default on our obligations under our other indebtedness, we may not be able to make payments on the new
notes.
Any default under the agreements governing our indebtedness, including a default under the Credit Facilities, that is not waived by the required
percentage of lenders could result in our inability to pay principal, premium and additional amounts, if any, and interest on the new notes and substantially decrease the market value of the new
notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness,
or if we otherwise fail to comply with the various
covenants, including financial and operating covenants, in the agreements governing our indebtedness, we could be
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in
default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be
due and payable, together with accrued and unpaid interest, the lenders under the Credit Facilities could elect to terminate their commitments, cease making further loans and institute foreclosure
proceedings against our assets, and we may seek protection under the bankruptcy code.
If
we breach our covenants under the Indenture, under the Credit Facilities or under any agreements governing future senior credit facilities or other indebtedness, we may need to
request waivers from the required percentage of lenders or required percentage of holders to avoid being in default. If we are unable to obtain a waiver from the lenders or holders, we would be in
default under the instrument governing that indebtedness, the lenders or holders could exercise their rights as described above, and we may seek protection under the bankruptcy code.
Because none of our subsidiaries are guaranteeing the new notes, your right to receive payment on the new
notes will be structurally subordinated to the liabilities of our subsidiaries.
None of our subsidiaries will be required to guarantee the new notes on their issue date. Creditors of our subsidiaries (including trade
creditors) will generally be entitled to payment from the assets of those subsidiaries before those assets can be distributed for the benefit of noteholders. As a result, the new notes will be
structurally subordinated to the prior payment of all of the existing and future debt and other liabilities (including trade payables) of our subsidiaries. In the event of a bankruptcy, liquidation or
reorganization of any of our subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before
any assets are made available for distribution to the Issuer of the Notes. For the year ended December 31, 2016, after intercompany eliminations the subsidiaries accounted for approximately
100% of our total revenue and Adjusted EBITDA. In addition, as of December 31, 2016, our subsidiaries had outstanding approximately $3.3 billion of total liabilities.
The new notes are our unsecured obligations and are effectively subordinated to our secured debt to the
extent of the collateral securing such indebtedness.
The new notes will be our senior unsecured obligations. Holders of our existing and future secured indebtedness will have claims that are senior
to the claims of the holders of the new notes, to the extent of the value of the assets securing such other indebtedness. As a result, in the event of any distribution or payment of our assets in any
bankruptcy, liquidation or dissolution, holders of secured indebtedness will have a prior claim to those assets that constitute their collateral. In any of the foregoing events, there can be no
assurance that there will be sufficient assets to pay all amounts due on the new notes.
As
of December 31, 2016, after giving effect to the exchange of the new notes, we would have had $4.9 billion of total indebtedness of which none would have been secured
indebtedness. We would also have had $250 million of borrowings available under our Revolver, which remains undrawn as of the date hereof.
Our ability to service and repay the new notes will be dependent on the cash flow generated by our
subsidiaries, primarily our domestic subsidiaries.
Repayment of the new notes will depend on our subsidiaries' generation of cash flow, which will, in turn, depend principally upon future
operating performance, and our subsidiaries' ability to make such cash available to us, by dividend, debt repayment or otherwise. As a result, prevailing economic conditions and financial, business
and other factors, many of which are beyond our control, will affect our ability to make payments on our debt. In particular, due to the seasonal nature of the interactive entertainment industry, with
the highest levels of consumer demand occurring during the year-end
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holiday
buying season in the fourth quarter of the year, our subsidiaries' cash flow in the first half of the year may be less than in the second half of the year, which may affect our ability to
satisfy our debt service obligations, including to service the new notes offered hereby. In addition, we earn a significant amount of our operating income, and hold a significant portion of our cash
and investments, in our foreign subsidiaries outside the United States. As of December 31, 2016, the amount of cash and cash equivalents held outside of the United States by our foreign
subsidiaries was $1.9 billion. If our domestic subsidiaries are not able to generate sufficient cash flow to satisfy our debt service obligations,
including to service the new notes, we may need to repatriate these funds and we may be subject to a higher effective tax rate.
If
we do not generate sufficient cash flow to satisfy our debt service obligations, including payments on the new notes, we may have to undertake alternative financing plans, such as
refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. Our ability to restructure or refinance our debt will depend on
the capital markets and our financial condition at such time. Any refinancing of our debt could result in higher interest rates and may require us to comply with more onerous covenants, which could
further restrict our business operations. The terms of the Indenture or any existing debt instruments or future debt instruments that we may enter into may restrict us from adopting some of these
alternatives. The inability of our subsidiaries to generate sufficient cash flow to satisfy our debt service obligations, including the inability to service the new notes offered hereby, or to
refinance our obligations on commercially reasonable terms, could have a material adverse effect on our business, financial condition, results of operations, profitability, cash flows or liquidity
financial and may impact our ability to satisfy our obligations in respect of the new notes.
Our
subsidiaries will not have any obligation to pay amounts due on the new notes or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be
permitted to, make distributions or debt repayments to enable us to make payments in respect of the new notes. Each such subsidiary is a distinct legal entity and may be subject to legal or
contractual restrictions which, under certain circumstances, may limit our ability to obtain cash from them. While under certain circumstances our Credit Agreement and the indentures governing our
notes may limit, the ability of our restricted subsidiaries to incur consensual encumbrances that include restrictions on their ability to pay dividends or make other intercompany payments to us,
these limitations are subject to certain qualifications and exceptions. In the event that we do not receive sufficient cash from our subsidiaries, we will be unable to make required principal,
premium, if any, and interest payments on the new notes.
We may incur substantially more debt, including secured debt, or take other actions which may affect our
ability to satisfy our obligations under the new notes.
Although the terms of the indentures governing our notes and the Credit Agreement governing our Credit Facilities restrict our and our
restricted subsidiaries' ability to incur additional indebtedness and/or liens, such restrictions are subject to several exceptions and qualifications. Accordingly, our existing debt agreements and
the Indenture allow us to incur additional indebtedness, including secured debt. Such additional indebtedness may be substantial. Our ability to recapitalize, incur additional debt and take a number
of other actions that are not prohibited by the terms of the new notes could have the effect of diminishing our ability to make payments on the new notes when due, and may also require us to dedicate
a substantial portion of our cash flow from operations to payments on our other indebtedness, which would reduce the availability of cash flow to fund our operations, working capital and capital
expenditures. In addition, if we incur any additional indebtedness that ranks
pari passu
in right of payment to a series of the new notes, the holders
of that debt will be able to share ratably with the holders of such series of the new notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or
other winding
up of us. If our subsidiaries incur any indebtedness, all of such debt will be structurally senior to the new notes, and the holders of that
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debt
will benefit prior to the holders of the new notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of any such entity.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service
obligations to increase.
As of December 31, 2016, after giving effect to this exchange offer, $2.7 billion, or approximately 54% of our total debt, would
have been at variable rates of interest. Borrowings under our Credit Facilities are at variable rates of interest and expose us to interest rate risk. If interest rates were to increase, our debt
service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our
indebtedness, will correspondingly decrease. For every 1.0% increase or decrease in our variable interest rate debt, our estimated annual cash interest expense is expected to change by approximately
$27 million. In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we
may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.
Our credit ratings may not reflect the risks of investing in the new notes.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due and include many subjective factors.
Consequently, real or anticipated changes in our credit ratings will generally affect the value of the new notes. Also, these credit ratings may not reflect the potential impact of risks relating to
structure or marketing of the new notes. Agency ratings are not a recommendation to buy, sell or hold any security and may be revised or withdrawn at any time by the issuing organization. Each
agency's rating should be evaluated independently of any other agency's rating. There can be no assurance that our credit ratings will remain in effect for any given period of time or that such
ratings will not be lowered, suspended or withdrawn entirely by a rating agency, if, in that rating agency's judgment, circumstances so warrant. There can also be no assurance that our credit ratings
will reflect all of the factors that would be important to holders of the new notes. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings
are under further review for a downgrade, could affect the value of the new notes, may increase our borrowing costs and may negatively impact our ability to incur additional debt. The reports of the
rating agencies do not form a part of, and are not incorporated by reference into, this prospectus.
Redemption may adversely affect your return on the new notes.
Each series of the new notes is redeemable at our option, and therefore we may choose to redeem the new notes at times when prevailing interest
rates are relatively low. As a result, you may not be able to reinvest the proceeds you receive from the redemption in a comparable security at an effective interest rate as high as the interest rate
on your new notes being redeemed.
We may not be able to purchase the new notes upon the occurrence of a Change of Control Repurchase Event,
which would result in a default under the Indenture and would adversely affect our business and financial condition.
Upon the occurrence of a "Change of Control Repurchase Event" within the meaning of the Indenture, each holder of the new notes will have the
right to require us to repurchase all or any part of such holder's new notes at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to but excluding the purchase date. We
may not have sufficient funds available to make any required repurchases of the new notes, and we may be unable to receive distributions or advances from our subsidiaries in the future sufficient to
meet such repurchase obligation. In addition, a change of control may also accelerate obligations to repurchase amounts outstanding under our and our
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subsidiaries'
indebtedness and require us (or our subsidiaries), among other things, to make similar offerings in respect of our and their outstanding indebtedness. In addition, restrictions under
future debt instruments may not permit us to repurchase the new notes. If we fail to repurchase new notes in that circumstance, we will be in default under the indenture governing the new notes. If,
due to a default, the repayment of related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay such indebtedness or the new
notes. See "Description of the New NotesRepurchase of Notes upon a Change of Control Repurchase Event."
Some significant restructuring transactions may not constitute a change of control, in which case we would
not be obligated to offer to purchase the new notes.
Upon the occurrence of a Change of Control Repurchase Event within the meaning of the Indenture, holders of new notes have the right to require
us to purchase their new notes. However, the change of control provisions will not afford protection to holders of new notes in the event of certain transactions. For example, transactions such as
leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us may not constitute a change of control requiring us to purchase the new notes. Further, various transactions
might not constitute a change of control under the new notes but could constitute a change of control as defined under our other debt. In the event of any such transaction, the holders would not have
the right to require us to purchase the new notes, even though such transaction could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit
ratings, thereby adversely affecting the holders of new notes.
The ability of holders of the new notes to require us to repurchase new notes as a result of a disposition of
"substantially all" assets may be uncertain.
The definition of change of control in the Indenture includes a phrase relating to the direct or indirect sale, transfer, conveyance or other
disposition of "all or substantially all" of the assets of the Issuer and its restricted subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase
"substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of new notes to require us to repurchase such new notes as a
result of a sale, transfer, conveyance or other disposition of less than all of our assets and the assets of our restricted subsidiaries taken as a whole to another person or group may be uncertain.
Trading markets for the new notes may not develop.
The new notes are new issues of securities with no established trading markets. We do not intend to apply for listing of any of the new notes on
any national securities exchange or for inclusion of any of the new notes on any automated dealer quotation system.
Therefore,
a liquid trading market may not develop for any series of the new notes. If a market develops, the new notes of any series could trade at prices that may be lower than the
initial offering
price of such series of the new notes. Further, if an active market does not develop or is not maintained, the price and liquidity of any series of the new notes may be adversely affected.
Historically, debt markets have been subject to disruptions that have caused substantial volatility in the prices of securities similar to the new notes. The market, if any, for any series of the new
notes may not be free from similar disruptions and any such disruptions may adversely affect the prices at which holders of new notes may sell their new notes. In addition, subsequent to their initial
issuance, any series of the new notes may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar notes, our performance and other
factors.
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DESCRIPTION OF THE NEW NOTES
General
Certain terms used in this description are defined under the subheading "Certain Definitions." In this description, (i) the term
"Issuer"
refers to Activision Blizzard, Inc. and not to any of its Subsidiaries, and (ii) the terms
"we,"
"our"
and
"us"
each refer to the Issuer and its consolidated Subsidiaries.
The
Issuer will issue $650,000,000 aggregate principal amount of new 2.300% Senior Notes due 2021 (the
"New 2021 Notes")
and $850,000,000
aggregate principal amount of new 3.400% Senior Notes due 2026 (the
"New 2026 Notes"
and, together with the 2021 Notes, the
"New
Notes")
under an indenture dated as of September 19, 2016 (the
"Indenture")
among the Issuer, the Guarantors and Wells
Fargo Bank, National Association, as trustee (the
"Trustee").
This is the same indenture under which the Old Notes were issued. Except as set forth
herein, the terms of the New Notes will be substantially identical and include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The New 2021
Notes and the New 2026 Notes will be issued under the same Indenture, but will be separate series of notes. As a result, among other things, holders of each series of notes will have separate and
independent rights to give notice of a Default or to direct the Trustee to exercise remedies in the event of a Default or otherwise. References to the "Old Notes," "Old 2021 Notes" or "Old 2026 Notes"
refer to the notes in exchange for which the New Notes are being offered. References to the "Notes" refer to the New Notes and the Old Notes, collectively. References to the "2021 Notes" refer to the
Old 2021 Notes and the New 2021 Notes, collectively. References to the "2026 Notes" refer to the Old 2026 Notes and the New 2026 Notes, collectively. Any Old Notes of a series that remain outstanding
after the completion of the exchange offer, together with the New Notes of such series issued in the exchange offer, will be treated as a single class of securities under the Indenture and are
referred to in this section as a "series" of Notes.
The
following description is only a summary of the material provisions of the Indenture and does not purport to be complete and is qualified in its entirety by reference to the
provisions of the Indenture, including the definitions therein of certain terms used below. We urge you to read the Indenture because it, not this description, defines your rights as Holders of the
applicable Notes. You may request copies of the Indenture at our address set forth under the heading "Where You Can Find More Information; Incorporation By Reference."
Brief Description of New Notes
The New Notes:
-
-
will be unsecured senior obligations of the Issuer;
-
-
will be
pari passu
in right of payment with all existing and future senior indebtedness
(including the Senior Credit Facilities and the 6.125% Senior Notes due 2023 (the
"Existing Notes"
)) of the Issuer;
-
-
will be effectively subordinated to all secured Indebtedness of the Issuer to the extent of the value of the assets securing such Indebtedness;
-
-
will be senior in right of payment to any future Subordinated Indebtedness of the Issuer; and
-
-
will be structurally subordinated to all existing and future Indebtedness and other liabilities of the Issuer's non-Guarantor Subsidiaries.
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Guarantees
Any Restricted Subsidiaries that guarantee the Senior Credit Facilities will be required to Guarantee the Notes. The Guarantors, if any, as
primary obligors and not merely as sureties, will jointly and severally irrevocably and unconditionally Guarantee, on an unsecured senior basis, the performance and full and punctual payment when due,
whether at maturity, by acceleration or otherwise, of all obligations of the Issuer under the Indenture and the Notes, whether for payment of principal of or interest on the Notes, expenses,
indemnification or otherwise, on the terms set forth in the Indenture by executing the Indenture.
Each
of the Guarantees of the Notes, if any, will be a general unsecured obligation of each Guarantor, will be
pari passu
in right of
payment with all existing and future senior indebtedness of each such entity (including the guarantees of the Senior Credit Facilities and the Existing Notes), will be effectively subordinated to all
secured Indebtedness of each such entity (to the extent of the value of the assets securing such Indebtedness) and will be senior in right of payment to all existing and future Subordinated
Indebtedness of each such entity. The Guarantees will be structurally subordinated to Indebtedness and other liabilities of Subsidiaries of the Issuer that do not Guarantee the Notes.
None
of the Issuer's Subsidiaries currently Guarantee the Old Notes and none of the Issuer's Subsidiaries will initially Guarantee the New Notes. In the event of a bankruptcy,
liquidation or reorganization of any of these non-Guarantor Subsidiaries, the non-Guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to
distribute or contribute, as the case may be, any of their assets to the Issuer or a Guarantor, if any. As a result, all of the existing and future liabilities of our non-Guarantor Subsidiaries,
including any claims of trade creditors, are structurally senior to the Notes. For the year ended December 31, 2016, after intercompany eliminations the subsidiaries accounted for approximately
100% of our total revenue and Adjusted EBITDA. In addition, as of December 31, 2016, our subsidiaries had outstanding approximately $3.3 billion of total liabilities.
The
obligations of each Guarantor, if any, under its Guarantees will be limited as necessary to prevent the Guarantees from constituting a fraudulent conveyance under applicable law and
therefore, are limited to the amount that such Guarantor could guarantee without such Guarantee constituting a fraudulent conveyance; this limitation, however, may not be effective to prevent such
Guarantee from constituting a fraudulent conveyance.
Any
entity that makes a payment under its Guarantee will be entitled upon payment in full of all guaranteed obligations under the Indenture to a contribution from each other Guarantor in
an amount equal to such other Guarantor's pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
If
a Guarantee was rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable Guarantor,
and, depending on the amount of such indebtedness, a Guarantor's liability on its Guarantee could be reduced to zero.
A
Guarantee by a Guarantor shall provide by its terms that it shall be automatically and unconditionally released and discharged upon:
(1) (a)
any sale, exchange or transfer (by merger, consolidation or otherwise) of
(i) the
Capital Stock of such Guarantor (including any sale, exchange or transfer), after which the applicable Guarantor is no longer a Restricted Subsidiary, or
(ii) all or substantially all the assets of such Guarantor;
(b) the
release or discharge of the guarantee by such Guarantor of the Senior Credit Facilities, except a discharge or release by or as a result of payment under such
guarantee;
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(c) the
proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary; or
(d) the
Issuer exercising its legal defeasance option or covenant defeasance option as described under "Legal Defeasance and Covenant Defeasance" or the Issuer's obligations
under the Indenture being discharged in a manner not in violation of the terms of the Indenture; and
(2) such
Guarantor delivering to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture
relating to such transaction have been complied with.
Ranking
The payment of the principal of, premium, if any, and interest on the New Notes and the payment of any Guarantee will rank
pari passu
in
right of payment with all senior indebtedness of the Issuer or the relevant Guarantor, as the case may be, including the obligations of
the Issuer or such Guarantor under the Senior Credit Facilities and the Existing Notes.
The
New Notes will be effectively subordinated to all of the existing and future secured Indebtedness of the Issuer and each Guarantor, if any, to the extent of the value of the assets
securing such Indebtedness. As of December 31, 2016, after giving effect to the exchange of the New Notes, we would have had $4.9 billion of total indebtedness of which none would have
been secured indebtedness. We would also have had $250 million of borrowings available under our Revolver, which remains undrawn as of the date hereof.
Paying Agent and Registrar for the Notes
The Issuer will maintain one or more paying agents for the Notes in Minnesota or New York. The initial paying agent for the Notes will be the
Trustee.
The
Issuer will also maintain a registrar with offices in Minnesota or New York. The initial registrar will be the Trustee. The registrar will maintain a register reflecting ownership of
the Notes outstanding from time to time and will make payments on and facilitate transfer of Notes on behalf of the Issuer.
The
Issuer may change the paying agents or the registrars without prior notice to the Holders. The Issuer or any of its Subsidiaries may act as a paying agent or registrar.
Transfer and Exchange
A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder to furnish
appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes due on transfer. The Issuer is not required to transfer or exchange
any Note selected for redemption. Also, the Issuer is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
Principal, Maturity and Interest
The Issuer will issue $650,000,000 aggregate principal amount of New 2021 Notes and $850,000,000 aggregate principal amount of New 2026 Notes in
this offering. The New 2021 Notes will mature on September 15, 2021. The New 2026 Notes will mature on September 15, 2026. The Issuer may issue additional 2021 Notes
(
"Additional 2021 Notes"
) and/or additional 2026 Notes (
"Additional 2026 Notes"
and, together with the
Additional 2021 Notes, the
"Additional Notes"
) from time to time after this
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offering
under the Indenture. Each of (i) the 2021 Notes offered by the Issuer and any Additional 2021 Notes subsequently issued under the Indenture and (ii) the 2026 Notes offered by
the Issuer and any Additional 2026 Notes subsequently issued under the Indenture, in each case, will be treated as a single class for all purposes under the Indenture, including waivers, amendments,
redemptions and offers to purchase. Unless the context requires otherwise, references to "Notes" for all purposes of the Indenture and this "Description of the New Notes" include any Additional Notes
that are actually issued;
provided
that Additional Notes will not be issued with the same CUSIP, if any, as existing Notes unless such Additional Notes
are fungible with existing Notes for U.S. federal income tax purposes.
New 2021 Notes
Interest will accrue on the New 2021 Notes at a rate per annum equal to 2.300% from the Issue Date, or from the most recent date to which
interest has been paid or provided for. Interest will be payable semiannually using a 360-day year comprised of twelve 30-day months in cash to Holders of record at the close of business on the
March 1 or September 1 immediately preceding the interest payment date, on March 15 and September 15 of each year, commencing September 15, 2017 (representing the
interest payment date following March 15, 2017, the most recent interest payment date on the Old 2021 Notes).
New 2026 Notes
Interest will accrue on the New 2026 Notes at a rate per annum equal to 3.400% from the Issue Date, or from the most recent date to which
interest has been paid or provided for. Interest will be payable semiannually using a 360-day year comprised of twelve 30-day months in cash to Holders of record at the close of business on the
March 1 or September 1 immediately preceding the interest payment date, on March 15 and September 15 of each year, commencing September 15, 2017 (representing the
interest payment date following March 15, 2017, the most recent interest payment date on the Old 2026 Notes).
Mandatory Redemption; Offers to Purchase; Open Market Purchases
The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the New Notes. However, under certain
circumstances, the Issuer may be required to offer to purchase Notes, including the New Notes, as described under the caption "Repurchase of Notes upon a Change of Control Repurchase Event." We may at
any time and from time to time purchase Notes through open market purchases, negotiated transactions or otherwise, which may include a consent solicitation.
Optional Redemption
New 2021 Notes
Except as set forth below, the Issuer will not be entitled to redeem the New 2021 Notes at its option prior to August 15, 2021.
At
any time prior to August 15, 2021, the Issuer may redeem all or a part of the New 2021 Notes upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail or electronically to the registered address of each Holder or otherwise in accordance with the procedures of The Depository Trust Company ("DTC"), at a redemption price equal to 100%
of the principal amount of New 2021 Notes redeemed plus the Applicable Premium as of the date of redemption (the
"2021 Notes Redemption Date"),
and,
without duplication, accrued and unpaid interest, if any, to, but excluding, the 2021 Notes Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the
relevant interest payment date.
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On
and after August 15, 2021, the Issuer may redeem the New 2021 Notes, in whole or in part, upon notice as described under the heading "Repurchase at the Option of
HoldersSelection and Notice" at a redemption price equal to 100% of the principal amount of the New 2021 Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but
excluding, the applicable 2021 Notes Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.
The
Issuer and its affiliates may acquire New 2021 Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, which may
include a consent solicitation, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.
Any
redemption of New 2021 Notes or notice of redemption may, at the Issuer's discretion, be subject to one or more conditions precedent. In addition, if such redemption or notice is
subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer's discretion, the redemption date may be delayed until such time as any or all such conditions
shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been
satisfied by the redemption date, or by the redemption date so delayed and such redemption provisions may be adjusted to comply with the requirements of any depositary.
The
Trustee shall select the 2021 Notes to be purchased in the manner described under "Repurchase of Notes upon a Change of Control Repurchase EventSelection and Notice."
New 2026 Notes
Except as set forth below, the Issuer will not be entitled to redeem the New 2026 Notes at its option prior to June 15, 2026.
At
any time prior to June 15, 2026, the Issuer may redeem all or a part of the New 2026 Notes upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail or electronically to the registered address of each Holder or otherwise in accordance with the procedures of The Depository Trust Company, at a redemption price equal to 100% of the
principal amount of New 2026 Notes redeemed plus the Applicable Premium as of the date of redemption (the
"2026 Notes Redemption Date"
) and, without
duplication, accrued and unpaid interest, if any, to, but excluding, the 2026 Notes Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the
relevant interest payment date.
On
and after June 15, 2026, the Issuer may redeem the New 2026 Notes, in whole or in part, upon notice as described under the heading "Repurchase at the Option of
HoldersSelection and Notice" at a redemption price equal to 100% of the principal amount of the New 2026 Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but
excluding, the applicable 2026 Notes Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.
The
Issuer and its affiliates may acquire New 2026 Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, which may
include a consent solicitation, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.
Any
redemption of New 2026 Notes or notice of redemption may, at the Issuer's discretion, be subject to one or more conditions precedent. In addition, if such redemption or notice is
subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer's discretion, the redemption date may be delayed until such time as any or all such conditions
shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be
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rescinded
in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed and such redemption provisions may be adjusted to
comply with the requirements of any depositary.
The
Trustee shall select the 2026 Notes to be purchased in the manner described under "Repurchase of Notes upon a Change of Control Repurchase EventSelection and Notice."
Repurchase of Notes upon a Change of Control Repurchase Event
Change of Control
The Notes will provide that if a Change of Control Repurchase Event occurs after the Issue Date, unless the Issuer has previously or
concurrently mailed a redemption notice with respect to all the outstanding Notes as described under "Optional Redemption," the Issuer will make an offer to purchase all of the Notes pursuant to the
offer described below (the
"Change of Control Offer")
at a price in cash (the
"Change of Control
Payment")
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the right of
Holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control Repurchase Event, the
Issuer will send notice of such Change of Control Offer by first-class mail or electronically, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the
security register with a copy to the Trustee or otherwise in accordance with the procedures of The Depository Trust Company, with the following information:
(1) that
a Change of Control Offer is being made pursuant to the covenant entitled "Change of Control," and that all Notes properly tendered pursuant to such Change of
Control Offer will be accepted for payment by the Issuer;
(2) the
purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed, unless the
Change of Control Offer is conditional on the occurrence of the related Change of Control (the
"Change of Control Payment Date");
(3) that
any Note not properly tendered will remain outstanding and continue to accrue interest;
(4) that
unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest on the Change of Control Payment Date;
(5) that
Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date. Notes held in book entry form shall be purchased in accordance with DTC's applicable procedures;
(6) that
Holders will be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes,
provided
that the paying agent receives, not later than the close of business
on the 30th day following the date of the Change of Control
Repurchase Event notice, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is
withdrawing its tendered Notes and its election to have such Notes purchased. Notes held in book entry form shall be withdrawn in accordance with DTC's applicable procedures;
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(7) that
if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal
amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof;
(8) if
such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of
Control, and if applicable, shall state that, in the Issuer's discretion, the Change of Control Payment Date may be delayed until such time as the Change of Control shall occur, or that such
redemption may not occur and such notice may be rescinded in the event that the Issuer shall determine that such condition will not be satisfied by the Change of Control Payment Date or by the Change
of Control Payment as so delayed; and
(9) the
other instructions, as determined by the Issuer, consistent with the covenant described hereunder, that a Holder must follow.
The
Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations
are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of
the Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof.
On
the Change of Control Payment Date, the Issuer will, to the extent permitted by law,
(1) accept
for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) no
later than 11:00 A.M. (Eastern time) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or
portions thereof so tendered, and
(3) deliver,
or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer's Certificate to the Trustee stating that such Notes or
portions thereof have been tendered to and purchased by the Issuer.
The
Senior Credit Facilities and future credit agreements, indentures or other agreements relating to senior indebtedness to which the Issuer becomes a party may provide that certain
change of control events with respect to the Issuer would constitute a default thereunder (including a Change of Control under the Indenture). If we experience a change of control that triggers a
default under our Senior Credit Facilities, we could seek a waiver of such default or seek to refinance our Senior Credit Facilities. In the event we do not obtain such a waiver or refinance the
Senior Credit Facilities, such default could result in amounts outstanding under our Senior Credit Facilities being declared due and payable.
Our
ability to pay cash to the Holders of Notes following the occurrence of a Change of Control Repurchase Event may be limited by our then-existing financial resources. Therefore,
sufficient funds may not be available when necessary to make any required repurchases.
The
Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent
management. The Change of Control purchase feature is a result of negotiations between the initial purchasers and us. We have no present intention to engage in a transaction involving a Change of
Control after the Issue Date, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions,
including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the
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Indenture,
but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional
Indebtedness are contained in the covenants described under "Certain CovenantsLiens" and "Certain CovenantsSale and Lease-Back Transactions." Such restrictions in the
Indenture can be waived only with the consent of the Holders of a majority in principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the
Indenture does not contain any covenants or provisions that may afford Holders of the Notes protection in the event of a highly leveraged transaction.
We
will not be required to make a Change of Control Offer following a Change of Control Repurchase Event if a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by us and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a
definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
If
Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any
third party making a Change of Control Offer in lieu of the Issuer as described above, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party
will have the right, upon not less than 15 days nor more than 60 days' prior notice,
provided
that such notice is given not more than
30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase on a date (the
"Second Change of Control Payment Date")
at a price in cash equal to the applicable Change of Control Payment in respect of the Second Change of Control
Payment Date.
The
definition of "Change of Control" includes a disposition of all or substantially all of the assets of the Issuer to any Person. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty
as to whether a particular transaction would involve a disposition of "all or substantially all" of the assets of the Issuer. As a result, it may be unclear as to whether a Change of Control has
occurred and whether a Holder of Notes may require the Issuer to make an offer to repurchase the Notes as described above.
The
provisions under the Indenture relative to the Issuer's obligation to make an offer to repurchase the Notes as a result of a Change of Control Repurchase Event may be waived or
modified with the written consent of the Holders of a majority in principal amount of the Notes, whether or not a Change of Control has occurred.
Selection and Notice
If the Issuer is redeeming less than all of the 2021 Notes and/or 2026 Notes at any time, the Trustee will select the Notes of such series to be
redeemed (a) if such series of Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such series of
Notes are listed, (b) on a pro rata basis to the extent practicable or (c) by lot or such other similar method in accordance with the procedures of The Depository Trust Company;
provided
that
no Notes of $2,000 or less shall be redeemed or repurchased in part.
Notices
of purchase or redemption shall be mailed by first-class mail, postage prepaid, or otherwise in accordance with the procedures of The Depository Trust Company, at least
30 days but not more than 60 days before the purchase or redemption date to each Holder of the applicable series of Notes at such Holder's registered address, except that redemption
notices may be mailed more than 60 days
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prior
to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. If any Note is to be purchased or redeemed in part
only, any notice of purchase or redemption that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased or redeemed.
The
Issuer will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note. Notes called
for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.
Certain Covenants
Set forth below are summaries of certain covenants that are contained in the Indenture.
Liens
The Issuer will not, and will not permit any Guarantor to, directly or indirectly, create, incur or assume any Lien (except Permitted Liens)
that secures obligations under any Indebtedness or any related guarantee, on any asset or property of the Issuer or any Guarantor unless:
(1) in
the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property or assets that is senior in priority to
such Liens; or
(2) in
all other cases, the Notes or the Guarantees are equally and ratably secured.
The
foregoing shall not apply to (a) Liens securing the Notes and the related Guarantees and (b) Liens securing other Indebtedness;
provided
that, after giving effect to the incurrence of such
Indebtedness and any substantially concurrent retirement of any Indebtedness secured by
Liens (other than Permitted Liens), the aggregate principal amount of all such Indebtedness secured by Liens pursuant to this subclause (b), together with all attributable debt outstanding
pursuant to the second paragraph of the "Limitation on Sale and Lease-Back Transactions" covenant described below, does not exceed 7.5% of the Issuer's Consolidated Total Assets.
Any
Lien created for the benefit of the Holders of the Notes pursuant to this covenant shall be deemed automatically and unconditionally released and discharged upon the release and
discharge of the applicable Lien described in clauses (1) and (2) above without any further action on the part of the Holders.
Limitation on Sale and Lease-Back Transactions
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Lease-Back Transaction
with another Person (other than with the Issuer or the Restricted Subsidiaries) unless:
(1) such
Sale and Lease-Back Transaction was entered into prior to the Issue Date;
(2) such
Sale and Lease-Back Transaction involves a lease for not more than three years (or which may be terminated by the Issuer or the applicable Restricted Subsidiary
within a period of not more than three years);
(3) the
Lien securing the Indebtedness with respect to such Sale and Lease-Back Transaction is a Permitted Lien; or
(4) the
Issuer or the applicable Restricted Subsidiary applies an amount equal to the net proceeds from the sale of such property to the purchase of other property or assets
used or useful in the business of the Issuer or its Restricted Subsidiaries or to the retirement of Indebtedness that
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is
pari passu
in right of payment with the Notes (including the Notes) within 365 days before or after the effective date of any such Sale and
Lease-Back Transaction;
provided
that, in lieu of applying such amount to the retirement of
pari passu
Indebtedness, the Issuer may deliver Notes to the Trustee for cancellation, such Notes to be credited at the cost thereof to the Issuer.
Notwithstanding
the restrictions set forth in the preceding paragraph, the Issuer and its Restricted Subsidiaries may enter into any Sale and Lease-Back Transaction which would otherwise
be subject to the foregoing restrictions if, after giving effect thereto, the aggregate amount of all attributable debt with respect to all such Sale and Lease-Back Transactions (not including
attributable debt with respect to Sale and Lease-Back Transactions permitted under clauses (1) through (4) above), together with all Indebtedness secured by a Lien outstanding pursuant
to the second paragraph of the "Liens" covenant described above, does not exceed 7.5% of the Issuer's Consolidated Total Assets.
Merger, Consolidation or Sale of All or Substantially All Assets
The Issuer may not consolidate or merge with or into or wind up into (whether or not such Person is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:
(1) the
Issuer is the surviving Person or the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or the Person to whom such sale,
assignment, transfer, lease, conveyance or other disposition will have been made is organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any
territory thereof (such Person, as the case may be, being herein called the
"Successor Company");
(2) the
Successor Company, if other than the Issuer, expressly assumes all the obligations of the Issuer under the Indenture and the Notes pursuant to supplemental
indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(3) immediately
after such transaction, no Default exists; and
(4) the
Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indentures, if any, comply with the Indenture and constitutes the legal, valid and binding obligation of the Issuer enforceable against it in accordance with its terms..
The
Successor Company will succeed to, and be substituted for, the Issuer under the Indenture, the Guarantees and the Notes, as applicable, and except in the case of a lease, the Issuer
will automatically be released and discharged from its obligations under the Indenture and the Notes. Notwithstanding the foregoing:
(1) any
Restricted Subsidiary may consolidate with, merge into or sell, assign, transfer, lease, convey or otherwise dispose of all or part of its properties and assets to
the Issuer, or any Restricted Subsidiary; and
(2) the
Issuer may merge with an Affiliate of the Issuer solely for the purpose of reorganizing the Issuer in a State of the United States, the District of Columbia or any
territory thereof so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.
Subject
to certain limitations described in the Indenture governing the release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor will, and the Issuer
will not permit any such Guarantor to, consolidate or merge with or into or wind up into (whether or not the Issuer or such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey
or otherwise dispose of
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all
or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(a) such
Guarantor is the surviving Person or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as the case may
be, or the laws of the United States, any State thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the
"Successor Person");
(b) the
Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under the Indenture and such Guarantor's related Guarantee
pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(c) immediately
after such transaction, no Default exists; and
(d) the
Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indentures, if any, comply with the Indenture and constitutes the legal, valid and binding obligation enforceable against it in accordance with its terms.
The
Successor Person will succeed to, and be substituted for, such Guarantor under the Indenture and such Guarantor's Guarantee and, except in the case of a lease, such Guarantor will
automatically be released and discharged from its obligations under the Indenture and such Guarantor's Guarantee. Notwithstanding the foregoing, any Guarantor may merge into or transfer all or part of
its properties and assets to another Guarantor or the Issuer.
Reports and Other Information
Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or
otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture requires the Issuer
to file with the SEC (and make available (without exhibits) without cost to (i) Holders of the Notes, upon their request, and (ii) the Trustee, within 15 days after it files them
with the SEC, in each case, to the extent not publicly available on the SEC's EDGAR system or the Issuer's public website) from and after the Issue Date,
(1) within
the time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-K by a non-accelerated filer
(plus any grace period provided by
Rule 12b-25 under the Exchange Act), annual reports on Form 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such
successor or comparable form; and
(2) within
the time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-Q by a non-accelerated filer
(plus any grace period provided by Rule 12b-25 under the Exchange Act), for each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q containing all quarterly
information that would be required to be contained in Form 10-Q, or any successor or comparable form;
in
each case, in a manner that complies in all material respects with the requirements specified in such form;
provided
that the Issuer
shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Issuer will post on its website within 15 days after the time the Issuer
would be required to file such reports with the SEC, if it were subject to Sections 13 or 15(d) of the Exchange Act; and
provided further,
that
that financial information required
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by
Rule 3-10 or 3-16 (or any successor thereto) of Regulation S-X shall not be required and such reports shall not be required to comply with Sections 302, 906 and 404 of the
Sarbanes-Oxley Act of 2002, as amended, or related items 307 and 308 of Regulation S-K, and the Issuer will not be required to provide financial statements in interactive data format
using the eXtensible Business Reporting Language. In addition, to the extent not satisfied by the foregoing, the Issuer will agree that, for so long as any Notes are outstanding, it will furnish to
Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Delivery of
reports, information and documents to the Trustee pursuant to this covenant is for informational purposes only and its receipt of such reports shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including our compliance with any of our covenants under the Indenture or the Notes (as to which the trustee is
entitled to rely exclusively on an Officer's Certificate). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, our compliance with the covenants or with
respect to any reports or other documents filed with the SEC or the SEC's EDGAR system or any website under the Indenture, or participate in any conference calls.
Events of Default and Remedies
The Indenture provides that each of the following is an Event of Default with respect to a particular series of Notes:
(1) default
in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on such series of Notes;
(2) default
for 30 days or more in the payment when due of interest on or with respect to such series of Notes;
(3) the
failure by the Issuer for 90 days after receipt of written notice given by the Trustee or the Holders of not less than 25% in principal amount of the Notes
then outstanding to comply with any of its obligations in the covenant described under "Certain CovenantsReports and Other Information";
(4) failure
by the Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less 25% in principal amount of the
Notes then outstanding to comply with any of its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3) above) contained in the
Indenture or the Notes with respect to such series of Notes;
(5) default
under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the
Issuer, any Guarantor or any Significant Subsidiary or the payment of which is guaranteed by the Issuer or, any Guarantor or any Significant Subsidiary, other than Indebtedness owed to the Issuer or
any of its Subsidiaries, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:
(a) such
default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods)
or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such
Indebtedness to become due prior to its stated maturity; and
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(b) the
principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final
maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $200.0 million or more at any one time outstanding;
(6) certain
events of bankruptcy or insolvency with respect to the Issuer or any Significant Subsidiary; or
(7) the
Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any
Guarantor that is a Significant Subsidiary, as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of
the Indenture or the release of any such Guarantee in accordance with the Indenture.
If any Event of Default (other than of a type specified in clause (6) above) occurs and is continuing under the Indenture with respect to a particular
series of Notes, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes of such series, may declare the principal, premium, if any, interest and any other
monetary obligations on all the then outstanding Notes of such series, to be due and payable immediately.
Upon
the effectiveness of such declaration, such principal and interest with respect to such series of Notes will be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising under clause (6) of the first paragraph of this section, all outstanding Notes will become due and payable without further action or notice. The Indenture
provides that the Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that
withholding notice is in their interest. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interest of
the Holders of the Notes.
The
Indenture provides that the Holders of a majority in aggregate principal amount of the then outstanding Notes of the applicable series by written notice to the Trustee may on behalf
of the Holders of all of the Notes of the applicable series waive any existing Default and its consequences under the Indenture except a continuing Default in the payment of interest on, premium, if
any, or the principal of any Note of the applicable series held by a non-consenting Holder and rescind any acceleration and its consequences with respect to the Notes. In the event of any Event of
Default specified in clause (5) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be
annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 30 days after such Event of Default arose:
(1) the
Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(2) the
holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or
(3) the
default that is the basis for such Event of Default has been cured.
Subject
to the provisions of the Indenture relating to the duties of the Trustee thereunder, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation
to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security
satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if
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any)
or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the applicable series of Notes unless:
(1) such
Holder has previously given the Trustee notice that an Event of Default is continuing with respect to such series of Notes;
(2) Holders
of at least 25% in principal amount of the total outstanding applicable series of Notes have requested the Trustee to pursue the remedy;
(3) Holders
of the applicable series of Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;
(4) the
Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) Holders
of a majority in principal amount at maturity of the total outstanding Notes of the applicable series have not given the Trustee a direction inconsistent with
such request within such 60-day period.
Subject
to certain restrictions, under the Indenture the Holders of a majority in principal amount of the total outstanding Notes of the applicable series are given the right to direct
the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow
any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note of the applicable series or that would involve
the Trustee in personal liability.
The
Indenture provides that the Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required, within ten Business
Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor shall have any liability for any obligations of the
Issuer or the Guarantors under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes
waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against public policy.
Legal Defeasance and Covenant Defeasance
The obligations of the Issuer and the Guarantors under the Indenture with respect to a series of Notes will terminate (other than certain
obligations) and will be released upon payment in full of all of the Notes of such series. The Issuer may, at its option and at any time, elect to have all of its obligations discharged with respect
to a series of Notes and have the Issuer's and each Guarantor's obligation discharged with respect to its related Guarantee
("Legal Defeasance")
and
cure all then existing Events of Default with respect to such series except for:
(1) the
rights of Holders of Notes with respect to such series to receive payments in respect of the principal of, premium, if any, and interest on such series of Notes when
such payments are due solely out of the trust created pursuant to the Indenture;
(2) the
Issuer's obligations with respect to such series of Notes concerning issuing temporary Notes of such series, registration of such Notes of such series, mutilated,
destroyed, lost or stolen
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Notes
of such series and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the
rights, powers, trusts, duties and immunities of the Trustee, and the Issuer's obligations in connection therewith; and
(4) the
Legal Defeasance provisions of the Indenture.
In
addition, the Issuer may, at its option and at any time, elect to have its obligations and those of each Guarantor released with respect to substantially all of the restrictive
covenants in the Indenture with respect to a series of Notes
("Covenant Defeasance")
and thereafter any omission to comply with such obligations shall
not constitute a Default with respect to the Notes of such series. In the event Covenant Defeasance occurs with respect to a series of Notes, certain events (not including bankruptcy, receivership,
rehabilitation and insolvency events pertaining to the Issuer) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to such series of Notes.
In
order to exercise either Legal Defeasance or Covenant Defeasance with respect to a series of Notes:
(1) the
Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of such series of Notes, cash in U.S. dollars, Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal amount of, premium, if any, and
interest due on such series of Notes on the stated maturity date or on the redemption date, as the case may be, of such principal amount, premium, if any, or interest on such series of Notes and the
Issuer must specify whether such series of Notes are being defeased to maturity or to a particular redemption date;
provided,
that in connection with
any defeasance to a redemption date prior to August 15, 2021, in the case of the 2021 Notes, or June 15, 2026, in the case of the 2026 Notes, the amount deposited in respect of the
Applicable Premium shall be sufficient for purpose of the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the deposit,
with any deficit on such redemption date (any such amount, the
"Applicable Premium Deficit")
only required to be deposited with the Trustee on or prior
to the corresponding redemption date, and with any excess on such redemption date required to be returned to the Issuer by the Trustee. Any Applicable Premium Deficit shall be set forth in an
Officer's Certificate delivered to the Trustee simultaneously with the deposit of
such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;
(2) in
the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions,
(a) the
Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or
(b) since
the issuance of such series of Notes, there has been a change in the applicable U.S. federal income tax law,
in
either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of such series of Notes will not recognize
income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had not occurred;
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(3) in
the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, the Holders of such series of Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will
be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no
Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness,
and, in each case the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit with respect to such series of Notes;
(5) such
Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Senior Credit Facilities or any other
material agreement or instrument
(other than the Indenture) to which, the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than that resulting from borrowing funds to be applied to make such
deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);
(6) the
Issuer shall have delivered to the Trustee an Officer's Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering,
delaying or defrauding any creditors of the Issuer or any Guarantor or others; and
(7) the
Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and
exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as to a series of Notes, when either:
(1) all
Notes of such series theretofore authenticated and delivered, except lost, stolen or destroyed Notes of such series which have been replaced or paid and Notes of
such series for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(2) (a)
all Notes of such series not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or
otherwise, will become due and payable within one year or are to be called for redemption and redeemed within one year 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 Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders of the Notes of such series cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of
any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to
the date of maturity or redemption;
provided,
that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall
be sufficient for purpose of the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any
Applicable Premium Deficit only required to be deposited with the Trustee on or prior to the redemption date, and with any excess on such redemption date required to be returned to the Issuer by the
Trustee. Any Applicable
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Premium
Deficit shall be set forth in an Officer's Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium
Deficit shall be applied toward such redemption;
(b) no
Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness
and, in each case, the granting of Liens in connection therewith) with respect to the Indenture as it relates to such series of Notes or the Notes of such series shall have occurred and be continuing
on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the Senior Credit Facilities or any
other material agreement or instrument governing Indebtedness (other than the Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than
that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection
therewith);
(c) the
Issuer has paid or caused to be paid all sums payable by it under the Indenture; and
(d) the
Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes of such series at maturity or the
redemption date, as the case may be.
In
addition, the Issuer must deliver an Officer's Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the Indenture, any Guarantee and the Notes of any series may be amended or
supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes of such series then outstanding, including consents obtained in connection with a purchase of, or tender offer or exchange offer for
Notes of such series, and any existing Default or compliance with any provision of the Indenture or the Notes of such series issued thereunder may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes of such series, other than Notes of such series beneficially owned by the Issuer or its Affiliates (including consents obtained in connection
with a purchase of or tender offer or exchange offer for the Notes of such series).
The
Indenture provides that, without the consent of each affected Holder of Notes, an amendment or waiver may not, with respect to any Notes of a series held by a non-consenting Holder:
(1) reduce
the principal amount of such series of Notes whose Holders must consent to an amendment, supplement or waiver;
(2) reduce
the principal amount of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other
than provisions relating to the covenants described above under the caption "Repurchase of Notes upon a Change of Control Repurchase Event");
(3) reduce
the rate of or change the time for payment of interest on any Note of such series;
(4) waive
a Default in the payment of principal of or premium, if any, or interest on the Notes of such series, except a rescission of acceleration of the Notes of such
series by the Holders of at least a majority in aggregate principal amount of the Notes of such series and a waiver of the payment default that resulted from such acceleration, or in respect of a
covenant or provision contained in the Indenture or any Guarantee which cannot be amended or modified without the consent of all Holders;
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(5) make
any such Note payable in money other than that stated therein;
(6) make
any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any,
or interest on the Notes of such series;
(7) make
any change in these amendment and waiver provisions as it relates to such series of Notes;
(8) amend
the contractual right expressly set forth in the Indenture of any Holder to receive payment of principal of, premium, if any, and interest on, such Holder's Notes
on or after the due dates thereof or to institute suit for the enforcement of any such payment on or after such due dates;
(9) make
any change to or modify the ranking of the Notes of such series that would adversely affect the Holders; or
(10) except
as expressly permitted by the Indenture, modify the Guarantees of any Significant Subsidiary in any manner adverse to the Holders of the Notes of such series.
Notwithstanding
the foregoing, the Issuer, any Guarantor (with respect to a Guarantee or the Indenture to which it is a party) and the Trustee may amend or supplement the Indenture and
any Guarantee or the Notes without the consent of any Holder;
(1) to
cure any ambiguity, omission, mistake, defect or inconsistency;
(2) to
provide for uncertificated Notes of such series in addition to or in place of certificated Notes or to provide for the issuance of Additional Notes;
(3) to
comply with the covenant relating to mergers, consolidations and sales of assets;
(4) to
provide the assumption of the Issuer's or any Guarantor's obligations to the Holders;
(5) to
secure the Notes or make any change that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights
under the Indenture of any such Holder;
(6) to
add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor;
(7) to
comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
(8) to
evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee thereunder pursuant to the requirements thereof;
(9) to
provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;
(10) to
add a Guarantor under the Indenture or release Guarantors from Guarantees as provided by the terms of the Indenture;
(11) to
conform the text of the Indenture, Guarantees or the Notes to any provision of the "Description of Notes" section of the Offering Memorandum to the extent that such
provision in such "Description of Notes" section was intended to be a verbatim recitation of a provision of the Indenture, Guarantee or Notes as set forth in an Officer's Certificate; or
(12) making
any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including, without limitation to
facilitate the issuance and administration of the Notes or comply with the procedures of any securities
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despoitary;
provided, however,
that (i) compliance with the Indenture as so amended would not result in Notes being transferred in violation of
the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.
The
consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the
proposed amendment.
Notices
Notices given by publication will be deemed given on the first date on which publication is made and notices given by first-class mail, postage
prepaid, will be deemed given five calendar days after mailing.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the Trustee thereunder, should it become a creditor of the Issuer, to obtain payment
of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if
it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.
The
Indenture provides that the Holders of a majority in principal amount of the outstanding Notes of a series will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the
Trustee will be required, in the exercise of its power, to use the degree of care that a prudent person would use under the circumstances in the conduct of his own affairs. Subject to such provisions,
the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of the Notes, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense.
Governing Law
The Indenture, the Notes and the Guarantees will be governed by and construed in accordance with the laws of the State of New York.
Certain Definitions
Set forth below are certain defined terms used in the Indenture. For purposes of the Indenture, unless otherwise specifically indicated, the
term "consolidated" with respect to any Person refers to such Person consolidated with the Issuer and its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as
if such Unrestricted Subsidiary were not an Affiliate of such Person.
"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 purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "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, by agreement or otherwise.
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"Applicable Premium"
means:
(1) with
respect to any 2021 Note on any redemption date, the excess, if any, of (i) the present value at such redemption date of (A) 100% of the aggregate
principal amount of such 2021 Note on such redemption date, plus (B) all required interest payments due on such 2021 Note through August 15, 2021 (excluding accrued but unpaid interest
to the redemption date), computed using a discount rate equal to the applicable Treasury Rate as of such redemption date plus 20 basis points; over (ii) the principal amount of such 2021 Note;
and
(2) with
respect to any 2026 Note on any redemption date, the excess, if any, of (i) the present value at such redemption date of (A) 100% of the aggregate
principal amount of such 2026 Note on such redemption date, plus (B) all required interest payments due on such 2026 Note through June 15, 2026 (excluding accrued but unpaid interest to
the redemption date), computed using a discount rate equal to the applicable Treasury Rate as of such redemption date plus 30 basis points; over (ii) the principal amount of such 2026 Note.
The
Issuer shall calculate the Applicable Premium.
"Below Investment Grade Rating Event"
means the occurrence of a Change of Control that is accompanied or followed by a downgrade of the
Notes within the Ratings Decline Period by each of the Rating Agencies to a rating that is not an Investment Grade Rating. Notwithstanding anything to the contrary, no Change of Control Repurchase
Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.
"Business Day"
means each day which is not a Legal Holiday.
"Capital Stock"
means:
(1) in
the case of a corporation, corporate stock;
(2) in
the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in
the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents"
means:
(1) United
States dollars;
(2) (a)
Canadian dollars, Swiss Francs, Euro, British Pounds or any national currency of any participating member state of the EMU; or
(b) in
the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by them from time to time in the ordinary course of business;
(3) securities
issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which
are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition;
(4) certificates
of deposit, time deposits and dollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities
not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of
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not
less than $500.0 million in the case of U.S. banks and $100.0 million (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;
(5) repurchase
obligations for underlying securities of the types described in clauses (3) and (4) entered into with any financial institution meeting the
qualifications specified in clause (4) above;
(6) commercial
paper rated at least P-1 by Moody's or at least A-1 by S&P and in each case maturing within 24 months after the date of creation thereof;
(7) marketable
short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody's or S&P, respectively (or, if at any time neither
Moody's nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;
(8) investment
funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above and (9) through
(11) below;
(9) readily
marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having
an Investment Grade Rating from either Moody's or S&P with maturities of 24 months or less from the date of acquisition;
(10) Indebtedness
or preferred stock issued by Persons with a rating of "A' or higher from S&P or "A2" or higher from Moody's with maturities of 24 months or less
from the date of acquisition; and
(11) Investments
with average maturities of 24 months or less from the date of acquisition in money market funds rated AAA (or the equivalent
thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody's.
Notwithstanding
the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above,
provided
that such amounts are converted into any
currency listed in clauses (1) and (2) as promptly as practicable and in any event
within ten Business Days following the receipt of such amounts.
"Change of Control"
means the occurrence of any of the following:
(1) the
sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole,
to any Person;
(2) the
Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or
disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision), in a single transaction or in a related series of transactions, by way of
merger, consolidation or other business combination or purchase, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of a majority or
more of the total voting power of the Voting Stock of the Issuer; or
(3) the
approval of any plan or proposal for the winding up or liquidation of the Issuer.
For
purposes of this definition, any direct or indirect holding company of the Issuer shall not itself be considered a "Person" or "group" for purposes of clause (2) above;
provided
that no "Person" or
"group" beneficially owns, directly or indirectly, more than a majority of the total voting power of the Voting Stock of
such holding company.
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"Change of Control Repurchase Event"
means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
"Consolidated Total Assets"
means, as of any date of determination, the total assets of the Issuer and its Restricted Subsidiaries on a
consolidated basis as shown on or reflected in the Issuer's most recent internal consolidated balance sheet (including, without duplication, the notes related thereto) prepared in accordance with
GAAP,
provided
that Consolidated Total Assets shall be calculated after giving pro forma effect to any investments, acquisitions or dispositions
occurring subsequent to the date of such balance sheet, as well as any such transaction giving rise to the need to calculate Consolidated Total Assets.
"Contingent Obligations"
means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness
("primary obligations")
of any other Person (the
"primary
obligor")
in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to
purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to
advance or supply funds:
(a) for
the purchase or payment of any such primary obligation, or
(b) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or
(3) to
purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation against loss in respect thereof.
"Default"
means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
"EMU"
means economic and monetary union as contemplated in the Treaty on European Union.
"Equity Interests"
means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock.
"euro"
means the single currency of participating member states of the EMU.
"Event of Default"
has the meaning set forth under "Events of Default and Remedies."
"Exchange Act"
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Foreign Subsidiary"
means any Restricted Subsidiary that is not a Guarantor and that is not organized or existing under the laws of the
United States, any state thereof, the District of Columbia, or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.
"GAAP"
means generally accepted accounting principles in the United States which are in effect on the Issue Date.
"Government Securities"
means securities that are:
(1) direct
obligations of, or obligations guaranteed by, the United States of America for the timely payment of which its full faith and credit is pledged; or
(2) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either
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case,
are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of
such 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 Government Securities or the specific payment of principal of or interest on the Government Securities
evidenced by such depository receipt.
"guarantee"
means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
"Guarantee"
means the guarantee by any Guarantor of the Issuer's Obligations under the Indenture.
"Guarantor"
means, each Restricted Subsidiary that Guarantees the Notes in accordance with the terms of the Indenture.
"Hedging Obligations"
means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar
agreement providing for the transfer or mitigation of interest rate or currency risks either generally or under specific contingencies.
"Holder"
means the Person in whose name a Note is registered on the registrar's books.
"Indebtedness"
means, with respect to any Person, indebtedness of such Person for borrowed money, if and to the extent any such
indebtedness would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
provided,
however,
that notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business or
(b) obligations under or in respect of Receivables Facilities.
"Investment Grade Rating"
means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB (or the
equivalent) by S&P, or an equivalent rating by any other Rating Agency, without regard to outlook.
"Issue Date"
means September 19, 2016.
"Issuer"
has the meaning set forth in the first paragraph under "General".
"Legal Holiday"
means a Saturday, a Sunday or a day on which commercial banking institutions or the place of payment are not required to
be open in the State of New York.
"Lien"
means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided
that in no event shall an operating lease be deemed to constitute a Lien.
"Moody's"
means Moody's Investors Service, Inc. and any successor to its rating agency business.
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"Obligations"
means any principal (including any accretion), interest (including any interest accruing subsequent to the filing of a
petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable
state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker's acceptances), damages and other
liabilities, and guarantees of payment of such principal (including any accretion), interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the
documentation governing any Indebtedness.
"Offering Memorandum"
means the offering memorandum, dated September 14, 2016, relating to the sale of the Old Notes.
"Officer"
means the Chief Executive Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the
Treasurer, Assistant Treasurer, the Secretary or the Assistant Secretaries of the Issuer.
"Officer's Certificate"
means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal
executive officer, the principal financial officer, the treasurer, the principal accounting officer or Secretary of the Issuer, which meets the requirements set forth in the Indenture.
"Opinion of Counsel"
means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Issuer or the Trustee.
"Permitted Liens"
means, with respect to any Person:
(1) pledges,
deposits or security by such Person under workmen's compensation laws, unemployment insurance, employers' health tax, and other social security laws or similar
legislation or other insurance related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto) or indemnification
obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith
deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of
such Person or deposits of cash or U.S. government bonds to secure surety, stay, customs or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties
or for the payment of rent, performance and return of money bonds and other similar obligations (including letters of credit issued in lieu of any such bonds or to support the issuance thereof and
including those to secure health, safety and environmental obligations), in each case incurred in the ordinary course of business;
(2) Liens
imposed by law or regulation, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet overdue for a period of more than
30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(3) Liens
for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or
which are being contested in good
faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(4) Liens
in favor of issuers of performance, surety bonds or bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or
letters of
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credit
issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor
survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real
properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the
aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) Liens
securing Indebtedness incurred to finance the construction, acquisition (including acquisition through merger or consolidation), purchase or lease of, or repairs,
improvements or additions to any property, plant or equipment of the Issuer or its Restricted Subsidiaries;
provided,
however, that the Lien shall not
extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the time the Lien is incurred (other than property affixed or appurtenant thereto), and the Indebtedness
(other than any interest thereon) secured by the Lien shall not be incurred more than 18 months after the later of the acquisition, completion of construction, repair, improvement, addition or
commencement of full operation of the property subject to the Lien;
(7) Liens
existing on the Issue Date;
(8) Liens
on property or shares of stock of a Person at the time such Person becomes a Subsidiary;
provided, however,
such
Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary;
(9) Liens
on property at the time the Issuer or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into
the Issuer or any of its Restricted Subsidiaries;
provided, however,
that such Liens are not created or incurred in connection with, or in contemplation
of, such acquisition, merger or consolidation;
(10) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary;
(11) Liens
securing Hedging Obligations so long as, in the case of Hedging Obligations related to interest, the related Indebtedness is secured by a Lien on the same
property securing such Hedging Obligations;
(12) Liens
on specific items of inventory of other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances or trade letters of
credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases,
subleases, licenses or sublicenses (including of intellectual property) granted to others in the ordinary course of business which do not materially interfere
with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and do not secure any Indebtedness;
(14) Liens
arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases entered into by the Issuer and its Restricted
Subsidiaries in the ordinary course of business;
(15) Liens
in favor of the Issuer or any Guarantor;
(16) Liens
on equipment of the Issuer or any of its Restricted Subsidiaries granted in the ordinary course of business;
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(17) Liens
on accounts receivable and related assets incurred in connection with a Receivables Facility;
(18) Liens
to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole,
or in part, of any Indebtedness secured by any Lien referred to in clause (b) of the second paragraph under "Certain CovenantsLiens" and in the foregoing
clauses (7), (8), (9) and (17);
provided, however,
that (a) such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the
outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (7), (8), (9) and (17) at the time the original Lien became a Permitted
Lien under the Indenture, and (ii) an amount necessary to pay any fees and expenses, including premiums, and accrued and unpaid interest related to such refinancing, refunding, extension,
renewal or replacement;
(19) deposits
made in the ordinary course of business to secure liability to insurance carriers;
(20) Liens
on property or assets incurred in connection with any transaction permitted under the first paragraph of "Certain CovenantsLimitation on Sale and
Lease-back Transactions";
(21) Liens
securing judgments for the payment of money so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated
for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(22) Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the
ordinary course of business;
(23) Liens
(i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course
of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking or other
financial institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;
(24) Liens
deemed to exist in connection with investments in repurchase agreements;
provided
that such Liens do not extend to
any assets other than those that are the subject of such repurchase agreement;
(25) Liens
encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts
incurred in the ordinary course of business and not for speculative purposes;
(26) Liens
that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of
Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of the Issuer and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its
Restricted Subsidiaries in the ordinary course of business;
(27) Liens
on the Equity Interests of Unrestricted Subsidiaries that secure Indebtedness of such Unrestricted Subsidiaries;
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(28) any
encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint
venture or similar agreement; and
(29) Liens
on property or assets used to defease or to irrevocably satisfy and discharge Indebtedness;
provided
that such
defeasance or satisfaction and discharge is not prohibited by the Indenture.
For
purposes of this definition, the term "Indebtedness" shall be deemed to include interest on and the costs in respect of such Indebtedness.
"Person"
means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
"Rating Agencies"
means Moody's and S&P or if Moody's or S&P or both shall not make a rating on the Notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody's or S&P or both, as the case may be.
"Ratings Decline Period"
means the period commencing on the earlier of (a) the first public notice of the occurrence of a Change of
Control or (b) the public announcement by the Issuer of its intention to effect a Change of Control, and ending 60 days following consummation of such Change of Control (which period
shall be extended so long as the rating of the applicable series of Notes is under publicly announced consideration for a possible rating downgrade by any of the Rating Agencies on such
60th day, such extension to last with respect to each such Rating Agency until the date on which such Rating Agency considering such possible downgrade either (x) rates the applicable
series of Notes below Investment Grade or (y) publicly announces that it is no longer considering such Notes for possible downgrade,
provided
that no such extension shall occur if on such 60th day the applicable series of Notes is rated Investment Grade by at least one of such Rating Agencies in question and is not subject to review
for possible downgrade by such Rating Agency).
"Receivables Facility"
means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed,
restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities)
to the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Issuer or any of its Restricted Subsidiaries sells its accounts receivable to either
(a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.
"Receivables Subsidiary"
means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables
Facilities and other activities reasonably related thereto.
"Restricted Subsidiary"
means, at any time, each direct and indirect Subsidiary of the Issuer (including any Foreign Subsidiary) that is
not then an Unrestricted Subsidiary;
provided, however,
that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary,
such Subsidiary shall be included in the definition of "Restricted Subsidiary."
"S&P"
means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency
business.
"Sale and Lease-Back Transaction"
means any arrangement providing for the leasing by the Issuer or any of its Restricted Subsidiaries of
any real or tangible personal property, which property has been or is to be sold or transferred for value by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such
leasing.
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"SEC"
means the U.S. Securities and Exchange Commission.
"Securities Act"
means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Senior Credit Facilities"
means the credit facility under the credit agreement dated as of October 11, 2013 by and among the
Issuer, the Guarantors, the lenders party thereto in their capacities as lenders thereunder and Bank of America, N.A., as Administrative Agent, as amended or supplemented from time to time.
"Significant Subsidiary"
means any Restricted Subsidiary that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02(w)(1) or (2) of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
"Subordinated Indebtedness"
means:
(1) any
Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and
(2) any
Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.
"Subsidiary"
means, with respect to any Person:
(1) any
corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and
(2) any
partnership, joint venture, limited liability company or similar entity of which
(x) more
than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or
controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited
partnership or otherwise, and
(y) such
Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
"Treasury Rate"
means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities
with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the
redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to
August 15, 2021 (in the case of 2021 Notes) or June 15, 2026 (in the case of 2026 Notes);
provided, however,
that if the period from the
redemption date to August 15, 2021 (in the case of 2021 Notes) or June 15, 2026 (in the case of 2026 Notes) is less than one year, the weekly average yield on actively traded United
States Treasury securities adjusted to a constant maturity of one year will be used.
"Trust Indenture Act"
means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).
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"Unrestricted Subsidiary"
means:
(1) any
Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and
(2) any
Subsidiary of an Unrestricted Subsidiary.
The
Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any
property of, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated);
provided
that:
(1) any
Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests
having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Issuer; and
(2) each
of:
has
not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to
which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary.
Any
such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly delivering to the Trustee a copy of the resolution of the board of directors of the Issuer
or any committee thereof giving effect to such designation and an Officer's Certificate certifying that such designation complied with the foregoing provisions.
"Voting Stock"
of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of
the board of directors of such Person.
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BOOK-ENTRY, DELIVERY AND FORM
General
The new notes will be represented by one or more global notes in registered form without interest coupons attached (the "Global Notes"). The
Global Notes will be deposited with a custodian for DTC, and registered in the name of Cede & Co., as nominee of DTC.
Ownership
of interests in the Global Notes (the "Book-Entry Interests") will be limited to persons who have accounts with DTC, or persons who hold interests through such participants.
DTC will hold interests in the Global Notes on behalf of its participants through customers' securities accounts in their respective names on the books of their respective depositaries. Except under
the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of certificated Notes.
Book-Entry
Interests will be shown on, and transfers thereof will be done only through, records maintained in book-entry form by DTC and its participants. The laws of some jurisdictions,
including certain states of the United States, may require that certain purchasers of securities take physical delivery of such securities in definitive form. The foregoing limitations may impair your
ability to own, transfer or pledge Book-Entry Interests. In addition, while the Notes are in global form, holders of Book-Entry Interests are not considered the owners or "holders" of Notes for any
purpose.
So
long as the Notes are held in global form, DTC (or its nominee) will be considered the sole holders of Global Notes for all purposes under the Indenture. In addition, participants in
DTC must rely on the procedures of DTC and indirect participants must rely on the procedures of DTC and the participants through which they own Book-Entry Interests, to transfer their interests or to
exercise any rights of holders under the Indenture.
Neither
the Issuer nor the Trustee for the new notes has any responsibility or liability for any aspect of the records relating to the Book-Entry Interests.
Redemption of the Global Notes
In the event any Global Note (or any portion thereof) is redeemed, DTC (or its nominee) will redeem an equal amount of the Book-Entry Interests
in such Global Note from the amount received by it in respect of the redemption of such Global Note. The redemption price payable in connection with the redemption of such Book-Entry Interests will be
equal to the amount received by DTC in connection with the redemption of such Global Note (or any portion thereof). The Issuer understands that, under existing practices of DTC, if fewer than all of a
series of Notes are to be redeemed at any time, DTC will credit its participants' accounts on a proportionate basis (with adjustments to prevent fractions) or by lot or on such other basis as it deems
fair and appropriate; provided, however, that no Book-Entry Interest of $2,000 principal amount or less may be redeemed in part.
Payments on Global Notes
The Issuer will make payments of any amounts owing in respect of the Global Notes (including principal, premium, if any, and interest and all
other amounts payable) to DTC or its nominee, which will distribute such payments to participants in accordance with its procedures. The Issuer will make payments of all such amounts without deduction
or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature except as may be required by law. The Issuer expects that standing
customer instructions and customary practices will govern payments by participants to owners of Book-Entry Interests held through such participants.
Under
the terms of the Indenture, the Issuer and the Trustee will treat the registered holders of the Global Notes (
i.e.,
DTC (or
its nominee)) as the owners thereof for the purpose of receiving
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payments
and for all other purposes. None of the Issuer, the Trustee or any of their respective agents has or will have any responsibility or liability for:
-
-
any aspect of the records of DTC or any participant or indirect participant relating to payments made on account of a Book-Entry Interest or
for maintaining, supervising or reviewing the records of DTC, or any participant or indirect participant relating to or payments made on account of a Book-Entry Interest; or
-
-
DTC or any participant or indirect participant.
Payments
by participants to owners of Book-Entry Interests held through participants are the responsibility of such participants.
Currency of Payment for the Global Notes
Except as may otherwise be agreed between DTC and any holder, the principal of, premium, if any, and interest on, and all other amounts payable
in respect of, the Global Notes will be paid to holders of interests in such Notes through DTC in U.S. dollars.
Payments
will be subject in all cases to any fiscal or other laws and regulations (including any regulations of the applicable clearing system) applicable thereto. None of the Issuer,
the Trustee or any of their respective agents will be liable to any holder of a Global Note or any other person for any commissions, costs, losses or expenses in relation to or resulting from any
currency conversion or rounding effected in connection with any such payment.
Action By Owners of Book-Entry Interests
DTC has advised the Issuer that it will take any action permitted to be taken by a holder of Notes (including the presentation of Notes for
exchange as described below) only at the direction of one or more participants to whose account the Book-Entry Interests in the Global Notes are credited and only in respect of such portion of the
aggregate principal amount of Notes as to which such participant or participants have or have given such direction. DTC will not exercise any discretion in the granting of consents, waivers or the
taking of any other action in respect of the Global Notes. However, if there is an event of default under the Notes, DTC reserves the right to exchange the Global Notes for definitive registered Notes
in certificated form (the "Definitive Registered Notes"), and to distribute Definitive Registered Notes to its participants.
Transfers
Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect
participants, which rules and procedures may change from time to time.
Any
Book-Entry Interest in one of the Global Notes that is transferred to a person who takes delivery in the form of a Book-Entry Interest in any other Global Note of the same series
will, upon transfer,
cease to be a Book-Entry Interest in the first-mentioned Global Note and become a Book-Entry Interest in such other Global Note, and accordingly will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to Book-Entry Interests in such other Global Note for as long as it remains such a Book-Entry Interest.
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Definitive Registered Notes
Under the terms of the Indenture, owners of the Book-Entry Interests will receive Definitive Registered
Notes:
-
-
if DTC notifies the Issuer that it is unwilling or unable to continue as depositary for the Global Note, or DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in either case, a qualified successor depositary is not appointed by the Issuer within 90 days;
-
-
if an event of default under the applicable indenture occurred or is continuing and the owner of a Book-Entry Interest requests such exchange
in writing delivered through DTC.
In
the case of the issuance of Definitive Registered Notes, the holder of a Definitive Registered Note may transfer such Note by surrendering it to the registrar. In the event of a
partial transfer or a partial redemption of a holding of Definitive Registered Notes represented by one Definitive Registered Note, a Definitive Registered Note shall be issued to the transferee in
respect of the part transferred, and a new Definitive Registered Note in respect of the balance of the holding not transferred or redeemed shall be issued to the transferor or the holder, as
applicable; provided that no Definitive Registered Note in a denomination less than $2,000 shall be issued. The Issuer will bear the cost of preparing, printing, packaging and delivering the
Definitive Registered Notes.
The
Issuer shall not be required to register the transfer or exchange of Definitive Registered Notes for a period of 15 calendar days preceding (a) the record date for any payment
of interest on the applicable series of Notes, (b) any date fixed for redemption of the applicable series of Notes or (c) the date fixed for selection of the series of Notes to be
redeemed in part. Also, the Issuer is not required to register the transfer or exchange of any Notes selected for redemption. In the event of the transfer of any Definitive Registered Note, the
transfer agent may require a holder, among other things, to furnish appropriate endorsements and transfer documents as described in the applicable indenture. The Issuer may require a holder to pay any
taxes and fees required by law and permitted by the applicable indenture and the applicable series of Notes.
If
Definitive Registered Notes are issued and a holder thereof claims that such Definitive Registered Notes have been lost, destroyed or wrongfully taken or if such Definitive Registered
Notes are mutilated and are surrendered to the registrar or at the office of a transfer agent, the Issuer shall issue and the Trustee shall authenticate a replacement Definitive Registered Note if the
Trustee's and the Issuer's requirements are met. The Trustee or the Issuer may require a holder requesting replacement of a Definitive Registered Note to furnish an indemnity bond sufficient in the
judgment of both the Trustee and the Issuer to protect the Issuer, the Trustee or the paying agent appointed pursuant to the applicable indenture from any loss which any of them may suffer if a
Definitive Registered Note is replaced. The Issuer may charge for its expenses in replacing a Definitive Registered Note.
In
case any such mutilated, destroyed, lost or stolen Definitive Registered Note has become or is about to become due and payable, or is about to be redeemed or purchased by the Issuer
pursuant to the provisions of the indenture, the Issuer in its discretion may, instead of issuing a new Definitive Registered Note, pay, redeem or purchase such Definitive Registered Note, as the case
may be.
Definitive
Registered Notes may be transferred and exchanged for Book-Entry Interests in a Global Note only in accordance with the applicable indenture.
Information Concerning DTC
The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures
are solely within the control of DTC and are subject
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to
changes by DTC. We take no responsibility for these operations and procedures and urge investors to contact DTC or its participants directly to discuss these matters.
The
Issuer understands as follows with respect to DTC:
DTC
is:
-
-
a limited purpose trust company organized under the New York Banking Law;
-
-
a "banking organization" under New York Banking Law;
-
-
a member of the Federal Reserve System;
-
-
"clearing corporation" within the meaning of the New York Uniform Commercial Code; and
-
-
a "clearing agency" registered under Section 17A of the Exchange Act.
DTC
was created to hold securities for its participants and to facilitate the clearance and settlement of transactions among its participants. It does this through electronic book-entry
changes in the accounts of securities participants, eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC's owners are the New York Stock Exchange, Inc., NYSE MKT LLC, the Financial Industry Regulatory
Authority, Inc. and a number of DTC's direct participants. Others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a direct
participant also have access to the DTC system and are known as indirect participants.
Because
DTC can only act on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of an owner of a beneficial interest to pledge such
interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be limited by the lack of a definitive certificate for that
interest. The laws of some states require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests to such persons may
be limited. In addition, owners of beneficial interests through the DTC system will receive distributions attributable to the Global Notes only through DTC participants.
Global Clearance and Settlement Under the Book-Entry System
The Notes are expected to trade in DTC's Same-Day Funds Settlement System and any permitted secondary market trading activity in the Notes will,
therefore, be required by DTC to be settled in immediately available funds. The Issuer expects that secondary trading in any certificated Notes will also be settled in immediately available funds.
Cross-market transfers of Book-Entry Interests in the Notes between the participants in DTC will be done through DTC in accordance with DTC's rules.
Although
DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants in DTC, it is under no obligation to
perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Issuer, the Trustee, the registrar, any transfer agent or any paying agent will have
any responsibility for the performance by DTC or its participants or indirect participants, of their respective obligations under the rules and procedures governing their operations.
Initial Settlement
Initial settlement for the Notes will be made in dollars. Book-Entry Interests owned through DTC accounts will follow the settlement procedures
applicable to conventional Eurobonds in registered form. Book-Entry Interests will be credited to the securities custody accounts of DTC, holders on the business day following the settlement date
against payment for value on the settlement date.
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Secondary Market Trading
The Book-Entry Interests will trade through participants of DTC and will settle in same day funds. Since the purchase determines the place of
delivery, it is important to establish at the time of trading of any Book-Entry Interests where both the purchaser's and the seller's accounts are located to ensure that settlement can be made on the
desired value date.
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REGISTRATION RIGHTS
We have filed the registration statement (the "exchange offer registration statement") of which this prospectus forms a part and are
conducting the exchange offer in accordance with our obligations under the registration rights agreement entered into between us and the initial
purchasers of the old notes. Holders of the new notes will not be entitled to any registration rights with respect to the new notes.
Pursuant
to the registration rights agreement, we agreed, at our own cost, for the benefit of the holders of old notes, to use commercially reasonable efforts to file this exchange offer
registration statement with respect to an offer to exchange each series of old notes for new notes with the same aggregate principal amount and terms substantially identical in all material respects
to the applicable series of old notes (except for the provisions relating to the transfer restrictions and payment of additional interest); to cause the exchange offer registration statement to be
declared effective by the SEC under the Securities Act; and to consummate the exchange offer not later than the 365th day following the closing of the offering of old notes (the "Exchange
Date").
In
the event that this exchange offer is not consummated with respect to either series on or prior to the Exchange Date, we will, subject to certain conditions, at our own cost,
(1) file a
shelf registration statement with the SEC with respect to a series covering resales of such series of the old notes or the new notes, as the case may be;
(2) thereafter
use commercially reasonable efforts to cause such shelf registration statement to be declared effective under the Securities Act; and
(3) use
commercially reasonable efforts to keep the shelf registration statement continuously effective until the second anniversary of the date of issuance of the old notes
of such series or such shorter period that will terminate when all notes covered thereby are disposed of in accordance therewith or cease to be outstanding.
We
will, in the event a shelf registration statement with respect to a series is filed, among other things, provide to each holder for whom such shelf registration statement was filed
copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are
required to permit unrestricted resales of the old notes or the new notes, as the case may be. A holder selling such old notes or new notes pursuant to the shelf registration statement generally would
be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales. We may require each holder of old notes or new notes to be sold pursuant to the shelf registration statement to furnish to us such information regarding
the holder and the distribution of the old notes or new notes by the holder as we may from time to time reasonably require for inclusion in the shelf registration statement, and we may exclude from
such registration the old notes or new notes of any holder that fails to furnish us with such information within a reasonable amount of time after receiving such request.
If
neither (1) the exchange offer with respect to a series of old notes has been consummated on or prior to the Exchange Date nor (2) a shelf registration statement
covering resales of such series of old notes has been filed and been declared or otherwise become effective on or prior to the Exchange Date (together, a "registration default"), then additional
interest will accrue on the aggregate principal amount of such series of old notes as to which the registration default pertains from and including the date on which such registration default has
occurred to but excluding the date on which such registration default has been cured with respect to the applicable series of notes. Additional interest will accrue at a rate of 0.25% for the first
90 day period after such date and thereafter it will be increased by an additional 0.25% for each subsequent 90 day period that elapses, provided that the
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aggregate
increase in such annual interest rate may in no event exceed 0.50% per annum over the applicable rate of such series of old notes, i.e. 2.300% and 3.400% in respect of the old 2021
Notes and the old 2026 Notes, respectively. We will pay such additional interest on regular interest payment dates. Such additional interest will be in addition to any other interest payable from time
to time with respect to the applicable series of the old notes and the new notes.
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