DESCRIPTION OF THE NOTES
General
The notes offered hereby will be
issued under the indenture (the
Base Indenture
), dated as of December 5, 2013, between Aircastle Limited, as Issuer, and Wells Fargo Bank, National Association, as Trustee (the
Trustee
), as
supplemented by a supplemental indenture between the Issuer and the Trustee, dated as of the closing date (the
Supplemental Indenture
and, together with the Base Indenture, the
Indenture
). The
Indenture will be subject to and governed by the Trust Indenture Act of 1939, as amended (the
Trust Indenture Act
, or
TIA
). The terms of the notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act. The following is a summary of the material terms and provisions of the notes and the Indenture. The following summary does not purport to be a complete description of the notes or
such agreements and is subject to the detailed provisions of, and qualified in its entirety by reference to, the Indenture. You can find definitions of certain terms used in this description under the heading Certain Definitions.
For purposes of this summary, the term Issuer refers only to Aircastle Limited, and not to any of its Subsidiaries.
Brief Description of
the Notes
The notes will be:
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general senior obligations of the Issuer;
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pari passu
in right of payment with any existing and future senior Indebtedness of the Issuer;
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senior in right of payment to any Subordinated Indebtedness of the Issuer; and
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structurally subordinated to all liabilities and preferred stock of Subsidiaries of the Issuer.
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Without limitation on the generality of the foregoing, the notes will be effectively subordinated to secured Indebtedness and other
obligations of the Issuer to the extent of the value of the assets securing such Indebtedness and other obligations. In the event of the Issuers bankruptcy, liquidation, reorganization or other winding up, the Issuers assets that secure
such secured Indebtedness and other obligations will be available to pay obligations on the notes only after all Indebtedness under such secured Indebtedness and other obligations have been repaid in full from such assets.
On the Issue Date, the notes will not be guaranteed by any Subsidiary of the Issuer. As a result, the notes will be structurally subordinated
to all liabilities and obligations of our Subsidiaries. Claims of creditors of our Subsidiaries, including trade creditors, secured creditors and creditors holding debt and guarantees issued by those Subsidiaries, and claims of preferred
shareholders (if any) of those Subsidiaries generally will have priority with respect to the assets and earnings of those Subsidiaries over the claims of creditors of the Issuer, including Holders.
On the Issue Date, all of the Issuers subsidiaries will be Restricted Subsidiaries. However, under the circumstances
described below under the subheading Certain CovenantsLimitation on Restricted Payments, the Issuer will be permitted to designate certain of its Subsidiaries as Unrestricted Subsidiaries. The Issuers
Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture.
Principal, Maturity and Interest
The Issuer will issue $500.0 million aggregate principal amount of notes. The notes will mature on April 1, 2023. The Issuer may issue
additional notes from time to time after this offering under the Indenture (
Additional Notes
). Any offering of Additional Notes is subject to the covenants described below under the caption Certain
CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and
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Preferred Stock. The notes and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, although they may bear a
different CUSIP number. Unless the context requires otherwise, references to notes for all purposes of the Indenture and this Description of the Notes include any Additional Notes that are actually issued. The notes will be
issued in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
Interest on the notes will accrue at the
rate of 5.000% per annum. Interest on the notes will be payable semi-annually in arrears on April 1 and October 1, commencing on October 1, 2016 to Holders of record on the immediately preceding March 15 and September 15. Interest on
the notes will accrue from the most recent date to which interest has been paid, or, if no interest has been paid, from the date of issuance of the notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Payment of Additional Amounts
Under
current Bermuda law, no withholding tax will be imposed upon payments on the notes or the Note Guarantees, if any. If the Issuer (or a Guarantor, if any) or other applicable withholding agent is required by law to deduct or withhold taxes imposed by
Bermuda or another Relevant Tax Jurisdiction on payments to Holders, however, it will pay additional amounts on those payments to the extent described in this section. Relevant Tax Jurisdiction means Bermuda, or another jurisdiction in
which the Issuer or a Guarantor, or a successor of any of them, is organized, is resident or engaged in business for tax purposes or through which payments are made on or in connection with the notes or the Note Guarantees.
The Issuer (or a Guarantor) will pay to any Holder so entitled all additional amounts that may be necessary so that every net payment of
interest, principal, premium or other amount received by the beneficial owner on that note or the Note Guarantee will not be less than the amount provided for in that note or Note Guarantee. Net payment refers to the amount the Issuer,
any Guarantor or their paying agent pays the Holder after deduction or withholding by the applicable withholding agent of an amount for or on account of any present or future tax, assessment or other governmental charge imposed with respect to that
payment by a taxing authority (including any withholding or deduction attributable to additional amounts payable hereunder).
The Issuer
(and Guarantors) will also indemnify and reimburse Holders for:
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taxes (including any interest, penalties and related expenses) imposed on the Holders (or if a Holder is not the beneficial owner, the beneficial owner) by a Relevant Tax Jurisdiction if and to the same extent that a
Holder would have been entitled to receive additional amounts if the Issuer (or a Guarantor) or other applicable withholding agent had been required to deduct or withhold those taxes from payments on the notes or the Note Guarantees; and
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stamp, court, documentary or similar taxes or charges (including any interest, penalties and related expenses) imposed by a Relevant Tax Jurisdiction in connection with the execution, delivery, enforcement or
registration of the notes or the Note Guarantees or other related documents and obligations.
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This obligation to pay
additional amounts is subject to several important exceptions, however. The Issuer (or a Guarantor) will not pay additional amounts to any Holder for or on account of any of the following:
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any tax, assessment or other governmental charge imposed solely because at any time there is or was a connection between the Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of or possessor of
power over the relevant Holder if the Holder is an estate, nominee, trust, partnership, limited liability company, or corporation) and the Relevant Tax Jurisdiction imposing the tax (other than the mere receipt of a payment or the acquisition,
ownership, disposition or holding of, or enforcement of rights under, a note or the Note Guarantees);
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any estate, inheritance, gift or any similar tax, assessment or other governmental charge;
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any tax, assessment or other governmental charge imposed solely because the Holder (or if the Holder is not the beneficial owner, the beneficial owner) fails to comply with any certification, identification or other
reporting requirement concerning the nationality, residence, identity or connection with the taxing jurisdiction of the Holder or any beneficial owner of the note or the Note Guarantees, if compliance is required by law or by an applicable income
tax treaty to which the jurisdiction imposing the tax is a party, as a precondition to an exemption from the tax, assessment or other governmental charge for which such Holder is eligible and the Issuer (or a Guarantor) has given the Holders at
least 60 days notice that Holders will be required to provide such information and identification;
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any tax, assessment or other governmental charge with respect to a note or a Note Guarantee presented for payment more than 30 days after the date on which payment became due and payable or the date on which payment
thereof is duly provided for and notice thereof given to Holders, whichever occurs later, except to the extent that the Holder of the note would have been entitled to additional amounts on presenting the note for payment on any date during the
30-day period; and
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any withholding or deduction imposed on a payment to an individual that is required to be made pursuant to the European Union Directive on the taxation of savings income, which was adopted by the ECOFIN Council on
June 3, 2003, or any law implementing or complying with, or introduced in order to conform to, such Directive.
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Payments
Principal of, premium, if any, and interest on the notes will be payable at the office or agency of the Issuer maintained for such purpose
within the City and State of New York or, at the option of the Issuer, payment of interest may be made by check mailed to Holders at their respective addresses set forth in the register of Holders;
provided
that all payments of principal,
premium, if any, and interest with respect to notes represented by one or more global notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder
or Holders thereof. Until otherwise designated by the Issuer, the Issuers office or agency in Minnesota will be the office of the trustee maintained for such purpose.
Ranking
The Indebtedness evidenced by
the notes will be senior Indebtedness of the Issuer and will rank pari passu in right of payment with all existing and future senior Indebtedness of the Issuer. The Indebtedness evidenced by the notes will be senior in right of payment to all
existing and future Subordinated Indebtedness of the Issuer.
As of December 31, 2015, on an as adjusted basis after giving effect to
this offering and the use of proceeds specified herein, the Issuer and its Subsidiaries would have had $4.5 billion aggregate principal amount of Indebtedness outstanding, $1.1 billion of which was secured debt and none of which was Subordinated
Indebtedness. All of the operations of the Issuer are conducted through its Subsidiaries. Claims of creditors on such Subsidiaries, including trade creditors, and claims of preferred shareholders (if any) of such Subsidiaries, generally will have
priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of the Issuer, including the Holders. The notes, therefore, will be structurally subordinated to holders of Indebtedness and other creditors
(including trade creditors) and preferred shareholders (if any) of the Subsidiaries of the Issuer. As of December 31, 2015, our Subsidiaries had approximately $1.1 billion of outstanding Indebtedness and other obligations (excluding
intercompany liabilities). The liens covenant only applies to us and our subsidiaries that guarantee the notes, and the notes will initially not be guaranteed by any of our subsidiaries.
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Although the Indenture will limit the incurrence of Indebtedness by certain of the Issuers
Subsidiaries, such limitation is subject to a number of significant qualifications. See Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
Note Guarantees
The notes will not be
guaranteed by any of our subsidiaries or any third party.
From and after the Issue Date, the Issuer will not cause or permit any of its
Restricted Subsidiaries (other than a Guarantor), directly or indirectly, to guarantee any Indebtedness of the Issuer or any other Guarantor unless, such Restricted Subsidiary:
(a) within 5 Business Days of the date on which it guarantees Indebtedness of the Issuer or any Guarantor executes and delivers
to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary shall guarantee (each, a Note Guarantee) all of the Issuers obligations under the notes and the Indenture and other terms contained in the
applicable supplemental indenture and subject to the conditions contained in such supplemental indenture; and
(b) delivers
to the Trustee an Opinion of Counsel (which may contain customary exceptions) that such supplemental indenture and Note Guarantee have been duly authorized, executed and delivered by such Restricted Subsidiary and constitute legal, valid, binding
and enforceable obligations of such Restricted Subsidiary.
Thereafter, such Subsidiary shall be a Guarantor for all purposes of the
Indenture until such Note Guarantee is released in accordance with the provisions of the Indenture. In the event of a sale or other transfer or disposition of all of the Capital Stock in any Guarantor to any Person that is not an Affiliate of the
Issuer in compliance with the terms of the Indenture, or in the event all or substantially all the assets or Capital Stock of a Guarantor are sold or otherwise transferred, by way of merger, consolidation or otherwise, to a Person that is not an
Affiliate of the Issuer in compliance with the terms of the Indenture, then, without any further action on the part of the Trustee or any Holder, such Guarantor (or the Person concurrently acquiring such assets of such Guarantor) shall be deemed
automatically and unconditionally cancelled, released and discharged of any obligations under its Note Guarantee, as evidenced by a supplemental indenture, written instrument or confirmation executed by the Trustee, upon request;
provided
,
however
that the Issuer delivers an Officers Certificate to the Trustee certifying that the net cash proceeds of such sale or other disposition will be applied in accordance with the Asset Sales covenant and, if evidence of
such cancellation, discharge or release is requested to be executed by the Trustee, an Officers Certificate and an opinion of counsel. In addition, upon the release or discharge of any guarantee which resulted in the creation of a Note
Guarantee (except a discharge or release by or as a result of payment under such guarantee), the Guarantor of such Note Guarantee shall be deemed automatically and unconditionally cancelled, released and discharged of any obligations under its Note
Guarantee, as evidenced by a supplemental indenture, written instrument or confirmation executed by the Trustee, upon request. The Issuer may cause any other Subsidiary of the Issuer to issue a Note Guarantee and become a Guarantor.
Each Note Guarantee by a Restricted Subsidiary will be limited to an amount not to exceed the maximum amount that can be guaranteed by that
Restricted Subsidiary without rendering the Note Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors
generally.
Mandatory Redemption
The
Issuer is not required to make mandatory redemption or sinking fund payments with respect to the notes, but the Issuer may be required to offer to purchase the notes as set forth below under Repurchase at the Option of Holders.
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Optional Redemption
Prior to April 1, 2019, the Issuer may, at its option, at any time and from time to time, redeem up to 40% of the aggregate principal
amount of the notes issued (including any Additional Notes) under the Indenture at a redemption price equal to 105.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but not including, the
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, with the net proceeds of one or more Equity Offerings of the Issuer;
provided
that at least
60% of the sum of the aggregate principal amount of the notes originally issued under the Indenture on the Issue Date remains outstanding immediately after the occurrence of each such redemption;
provided
further
that each such
redemption occurs within 90 days of the date of closing of each such Equity Offering.
In addition, the Issuer may also, at any time and
from time to time, redeem all or a part of the notes, upon not less than 30 nor more than 60 days prior notice mailed by first class mail to each Holders registered address, at a redemption price equal to the greater of (a) 100% of
the principal amount of the notes redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date, and (b) the sum of the present values of the remaining scheduled payments of principal and interest on the notes
from the redemption date through the maturity date of the notes (computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points), plus accrued and unpaid interest to, but not including, the redemption date.
The Trustee shall select the notes to be purchased in the manner described under Repurchase at the Option of
HoldersSelection and Notice.
Notice of redemption, whether in connection with an Equity Offering or otherwise, may be given
prior to the completion thereof, and any such redemption or notice may, at the Issuers option and discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering or other
transaction. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers discretion, the redemption date may be delayed until such time as any or all such
conditions shall be satisfied, 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. In addition,
the Issuer may provide in such notice that payment of the redemption price and performance of the Issuers obligations with respect to such redemption may be performed by another Person (it being understood that any such provision for payment
by another Person will not relieve the Issuer and the Guarantors from their obligations with respect to such redemption).
Redemption for Taxation
Reasons
The Issuer will be entitled, at its option, to redeem the notes in whole if at any time it becomes obligated to pay additional
amounts on the notes on the next interest payment date, but only if the obligation results from a change in, or an amendment to, the laws or treaties (including any regulations or official rulings promulgated thereunder) of a Relevant Tax
Jurisdiction (or a political subdivision or taxing authority thereof or therein), or from a change in any official position regarding the interpretation, administration or application of those laws, treaties, regulations or official rulings
(including a change resulting from a holding, judgment or order by a court of competent jurisdiction), that becomes effective and is announced after the Issue Date (or, if the applicable Relevant Tax Jurisdiction became a Relevant Tax Jurisdiction
on a date after the Issue Date, such later date) and provided the Issuer cannot avoid the obligation after taking reasonable measures to do so. If the Issuer redeems the notes in these circumstances, it will do so at a redemption price equal to 100%
of the principal amount of the notes redeemed, plus accrued and unpaid interest, if any, and any other amounts due to the redemption date.
If the Issuer becomes entitled to redeem the notes in these circumstances, it may do so at any time on a redemption date of its choice.
However, the Issuer must give the Holders notice of the redemption not less than
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30 days or more than 60 days before the redemption date and not more than 90 days before the next date on which it would be obligated to pay additional amounts. In addition, the Issuers
obligation to pay additional amounts must remain in effect when it gives the notice of redemption. Notice of the Issuers intent to redeem the notes shall not be effective until such time as it delivers to the Trustee both a certificate signed
by two of its officers stating that the obligation to pay additional amounts cannot be avoided by taking reasonable measures and an opinion of independent legal counsel or an independent auditor stating that the Issuer is obligated to pay additional
amounts because of an amendment to or change in law, treaties or position as described in the preceding paragraph.
In addition to the
Issuers rights to redeem notes as set forth above, the Issuer may at any time and from time to time purchase notes in open-market transactions, tender offers or otherwise.
Repurchase at the Option of Holders
Change of
Control
If a Change of Control Triggering Event occurs, 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, in each case, accrued and unpaid
interest, if any, to, but not including, the date of purchase, subject to the right of Holders of record of the notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of
Control Triggering Event, the Issuer will send notice of such Change of Control Offer by first class mail, with a copy to the Trustee, to each Holder of the 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 DTC, with the following information:
(1) 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;
(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 (the
Change of Control Payment Date
);
(3) any note not properly tendered will
remain outstanding and continue to accrue interest;
(4) 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, but not including, the Change of Control Payment Date;
(5) 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;
(6) 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 last day of the offer period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of notes tendered for purchase, and a statement that such Holder is withdrawing his tendered notes and his election to have such notes purchased;
(7) if such notice is mailed prior to the occurrence of a Change of Control Triggering Event, stating the Change of Control
Offer is conditional on the occurrence of such Change of Control Triggering Event; and
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(8) that Holders whose notes are being purchased only in part will be issued new
notes equal in principal amount to the unpurchased portion of the notes surrendered, which unpurchased portion must be equal to $2,000 or an integral multiple of $1,000 in excess thereof.
While the notes are in global form and the Issuer makes an offer to purchase all of the notes pursuant to the Change of Control Offer, a
Holder may exercise its option to elect for the purchase of the notes through the facilities of DTC, subject to its rules and regulations.
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 other Person making a Change of Control Offer in lieu of the Issuer as described below, purchase all of the notes validly tendered and not withdrawn by such Holders, the Issuer will have the right, upon
not less than 30 nor more than 60 days prior notice, 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 at a
redemption price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, to, but not including, the date of redemption, subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date.
We will not be required to make a Change of Control Offer following a Change of Control Triggering
Event if (1) 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
tendered and not withdrawn under such Change of Control Offer or (2) notice of redemption has been given pursuant to the Indenture as described under the caption Optional Redemption, unless and until there is a default in
payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control Triggering Event, conditional upon such Change of Control.
The Issuer will comply with the requirements of Section 14(e) 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 the 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 or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) 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 Officers Certificate stating that such notes or portions thereof have been tendered to and purchased by the Issuer.
The paying agent will promptly mail to each Holder of the notes the Change of Control Payment for such notes, and the Trustee will promptly
authenticate and mail to each Holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any;
provided
that each such new note will be in a principal amount of $2,000 or an integral multiple of $1,000
in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
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The Change of Control Triggering Event 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 Triggering Event purchase feature is a result of negotiations between the underwriters and us. After the Closing Date,
we have no present intention to engage in a transaction involving a Change of Control Triggering Event, 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 Triggering Event under the 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 CovenantsLimitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock and Certain CovenantsLiens. 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 will not contain any covenants or provisions that may afford Holders protection in a highly levered transaction.
Our revolving credit agreement provides that the occurrence of certain change of control events (including a Change of Control as defined
under the Indenture) with respect to us would constitute a default thereunder. In the event a Change of Control occurs, we may seek the consent of our lenders or may attempt to refinance or repay the borrowings under the revolving credit agreement.
If we do not obtain such consent or refinance or repay such borrowings, we may be in default under the revolving credit agreement, which may, in turn, constitute a default under the Indenture. In addition, future indebtedness that we may incur may
contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such indebtedness upon a Change of Control. The exercise by the Holders of their right to require us to repurchase their
notes could cause a default under such indebtedness, even if a Change of Control itself does not, due to the financial effect of such repurchase on us. We cannot assure you that sufficient funds will be available when necessary to make any required
repurchases.
The definition of Change of Control includes a disposition of all or substantially all of the assets of the
Issuer to certain Persons. 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 the notes may require the Issuer to make an offer to repurchase the notes as described above.
The provisions under
the Indenture relative to our obligation to make an offer to repurchase the notes as a result of a Change of Control Triggering Event may be waived or modified with the written consent of the Holders of a majority in principal amount of the notes
then outstanding, including after the entry into an agreement that would result in the need to make a Change of Control Offer.
Asset Sales
The Indenture will provide that the Issuer will not, and will not permit any Restricted Subsidiary to, cause, make or suffer to
exist an Asset Sale, unless:
(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of; and
(2)
except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents.
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Within 365 days after the Issuers or a Restricted Subsidiarys receipt of the Net
Proceeds of any Asset Sale covered by the preceding paragraph, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale:
(1) to make one or more offers to the Holders (and, at the option of the Issuer, the holders of other senior Indebtedness) to
purchase notes (and such senior Indebtedness) pursuant to and subject to the conditions contained in the Indenture (each, an
Asset Sale Offer
);
provided
,
however
, that in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to this clause (1), the Issuer or such Restricted Subsidiary shall permanently retire such Indebtedness;
provided
further
that if the Issuer or such Restricted Subsidiary shall so reduce
any senior Indebtedness (other than the notes), the Issuer will seek to equally and ratably reduce Indebtedness under the notes by making an offer to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, the
pro rata
principal amount of the notes, such offer to be conducted in accordance with the procedures set forth below for an Asset Sale Offer but without any further limitation in amount;
(2) to make an investment in (a) any one or more businesses;
provided
that such investment in any business is in
the form of the acquisition of Capital Stock and results in the Issuer or a Restricted Subsidiary, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) capital
expenditures or (c) acquisitions of other long-term assets (including minority interests in Restricted Subsidiaries), in each of (a), (b) and (c), used or useful in a Similar Business; or
(3) to reduce Indebtedness of a Restricted Subsidiary, other than Indebtedness owed to the Issuer or another Restricted
Subsidiary;
provided
that the acquisition of Indebtedness of a Restricted Subsidiary by the Issuer shall constitute a reduction in such Indebtedness.
Any Net Proceeds that are not invested or applied as provided and within the time period set forth in the first sentence of the immediately
preceding paragraph will be deemed to constitute
Excess Proceeds
. In the case of clause (2) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment;
provided
that (x) such investment is consummated within 635 days after receipt by the Issuer or any Restricted Subsidiary of the Net Proceeds of any Asset Sale and (y) if such investment is not consummated within the period set
forth in subclause (x), the Net Proceeds not so applied will be deemed to be Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $35.0 million, the Issuer shall make an Asset Sale Offer to all Holders, and, if required by the terms
of any senior Indebtedness, to the holders of such senior Indebtedness, to purchase the maximum principal amount of notes (that are $2,000 or an integral multiple of $1,000 in excess thereof ) and such other senior Indebtedness, that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture or agreement governing such other senior Indebtedness, as applicable. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within 30 days after the date that Excess Proceeds
exceeds $35.0 million by mailing the notice required pursuant to the terms of the Indenture, with a copy to the Trustee. To the extent that the aggregate amount of notes and such senior Indebtedness tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any other purposes not prohibited by the terms of the Indenture, subject to other covenants contained in the Indenture. If the aggregate
principal amount of notes or the senior Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the notes and such senior Indebtedness will be purchased on a
pro rata
basis based on the principal amount of the
notes or such senior Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. After the Issuer or any Restricted Subsidiary has applied the Net Proceeds from any Asset Sale as
provided in, and within the time periods required by, this paragraph (a), the balance of such Net Proceeds, if any, from such Asset Sale may be used by the Issuer or such Restricted Subsidiary for any purpose not prohibited by the terms of the
Indenture.
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For purposes of this covenant, the following are deemed to be cash or Cash Equivalents:
(a) any liabilities (as shown on the Issuers, or such Restricted Subsidiarys most recent internally available
balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary (whether assumed or otherwise discharged), other than liabilities that are by their terms subordinated to the notes;
(b) any securities received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer
or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale; and
(c) any Designated Noncash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale having an
aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $200.0 million and (y) 3.0% of Total
Assets at the time of the receipt of such Designated Noncash Consideration, with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value.
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 the notes pursuant to an Asset Sale 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.
Selection and Notice
If less than
all of the notes are to be redeemed at any time, selection of such notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange and DTC procedures, if any, on which such notes are
listed, or, if such notes are not so listed, on a pro rata basis or by lot or such similar method in accordance with the procedures of DTC;
provided
that no notes of $2,000 or less shall be purchased or redeemed in part.
Notices of purchase or redemption shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the
purchase or redemption date to each Holder of notes to be purchased or redeemed at such Holders registered address. 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.
A new note in principal amount equal
to the unpurchased or unredeemed portion of any note purchased or redeemed in part will be issued in the name of the Holder thereof upon cancellation of the original note. On and after the purchase or redemption date, unless the Issuer defaults in
payment of the purchase or redemption price, interest shall cease to accrue on notes or portions thereof purchased or called for redemption.
Certain Covenants
Set forth below
are summaries of certain covenants contained in the Indenture. If on any date following the Issue Date (i) the notes have Investment Grade Ratings from two Rating Agencies, and (ii) no Default has occurred and is continuing under the
Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a
Covenant Suspension Event
), the Issuer and the Restricted Subsidiaries will not be
subject to the following covenants (collectively, the
Suspended Covenants
):
(1)
Repurchase at the Option of HoldersAsset Sales;
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(2) Limitation on Restricted Payments;
(3) Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(4) clause (4) of the first paragraph of Amalgamation, Merger, Consolidation or Sale of All or Substantially
All Assets;
(5) Transactions with Affiliates; and
(6) Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.
In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of
time as a result of the foregoing, and on any subsequent date (the
Reversion Date
) one of the Rating Agencies (or two of the Rating Agencies if, at such time, the notes have an Investment Grade Rating from three Rating
Agencies) (a) withdraws its Investment Grade Rating or downgrades the rating assigned to the notes below an Investment Grade Rating and/or (b) the Issuer or any of its Affiliates enters into an agreement to effect a transaction that would
result in a Change of Control and such Rating Agency (or Rating Agencies) indicates that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw
its Investment Grade Rating or downgrade the ratings assigned to the notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the Indenture with respect
to future events, including, without limitation, a proposed transaction described in clause (b) above.
The period of time between the
Suspension Date and the Reversion Date is referred to in this description as the
Suspension Period
. Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall be
reset at zero. During the Suspension Period no additional subsidiary may be designated an Unrestricted Subsidiary unless such designation would have been permitted if the covenant described under the caption Limitation on Restricted
Payments had been in effect at all times during the Suspension Period. In the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of its Restricted Subsidiaries prior to such reinstatement will give
rise to a Default or Event of Default under the Indenture;
provided
that (1) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made will be calculated as though the covenant
described under the caption Limitation on Restricted Payments had been in effect prior to, but not during, the Suspension Period, and (2) all Indebtedness incurred, or Disqualified Stock or preferred stock issued, during the
Suspension Period will be classified to have been incurred or issued pursuant to clause (c) of the second paragraph of Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
There can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.
Limitation on Restricted Payments.
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on account of the Issuers or any Restricted Subsidiarys
Equity Interests, including any dividend or distribution payable in connection with any amalgamation, merger or consolidation other than:
(a) dividends or distributions by the Issuer payable in Equity Interests (other than Disqualified Stock) of the Issuer or in
options, warrants or other rights to purchase such Equity Interests; or
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(b) dividends or distributions by a Restricted Subsidiary so long as, in the
case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary, the Issuer or a Restricted Subsidiary receives at least its
pro rata
share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;
(2)
purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer, including in connection with any amalgamation, merger or consolidation;
(3) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior
to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than (x) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition and (y) Indebtedness of the Issuer to a Restricted Subsidiary or a Restricted Subsidiary to the Issuer or
another Restricted Subsidiary (Intercompany Subordinated Indebtedness); or
(4) make any Restricted Investment;
(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as
Restricted Payments
), unless, at the time of such Restricted Payment:
(a) no Default or Event
of Default shall have occurred and be continuing or would occur as a consequence thereof;
(b) immediately after giving
effect to such transaction on a pro forma basis, the Issuer could incur $1.00 of additional indebtedness under the provisions of the first paragraph of the covenant described Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1) and (14) (with respect to the payment of dividends on Refunding Capital Stock
pursuant to clause (b) thereof only) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum of:
(1) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from April 1, 2012 to the end of the
Issuers most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit,
plus
(2) 100% of the aggregate net cash proceeds and the Fair Market Value of marketable securities or other property received by the
Issuer since immediately after April 4, 2012 (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or preferred stock pursuant to clause (l) of the second paragraph of
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock) from the issue or sale of:
(x) Equity Interests of the Issuer, excluding cash proceeds and the Fair Market Value of marketable securities or other property received from
the sale of (A) Equity Interests to members of management, directors or consultants of the Issuer and the Issuers Subsidiaries after April 4, 2012 to the extent such amounts have been applied to Restricted Payments made in accordance
with clause (3) of the next succeeding paragraph; and (B) Designated Preferred Stock; or
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(y) debt securities, Designated Preferred Stock or Disqualified Stock of the Issuer or any
Restricted Subsidiary that have been converted into or exchanged for such Equity Interests of the Issuer;
provided
,
however
, that this clause (2) shall not include the proceeds from (a) Refunding Capital Stock (as defined below), (b) Equity Interests or converted or exchanged debt securities of the Issuer sold to a Restricted Subsidiary or
the Issuer, as the case may be, (c) Disqualified Stock or debt securities that have been converted into or exchanged for Disqualified Stock or (d) Excluded Contributions,
plus
(3) 100% of the aggregate amount of cash and the Fair Market Value of marketable securities or other property contributed to the capital of
the Issuer following April 4, 2012 (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or preferred stock pursuant to clause (l) of the second paragraph of
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock) (other than by a Restricted Subsidiary and other than by any Excluded Contributions),
plus
(4) 100% of the aggregate amount received in cash and the Fair Market Value of marketable securities or other property received by the Issuer
or a Restricted Subsidiary by means of:
(a) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of
Restricted Investments made by the Issuer and its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries and repayments of loans or advances which constitute Restricted
Investments by the Issuer and its Restricted Subsidiaries in each case after April 4, 2012; or
(b) the sale (other than to the
Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to clause (8) of the
next succeeding paragraph or to the extent such Investment constituted a Permitted Investment) or a dividend or distribution from an Unrestricted Subsidiary in each case after April 4, 2012;
plus
(5) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the Fair Market Value of the Investment in such
Unrestricted Subsidiary at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than to the extent the Investment in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant
to clause (6) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment.
As of
December 31, 2015, the amount available for Restricted Payments pursuant to clause (c) above would have been approximately $636.0 million.
The foregoing provisions will not prohibit:
(1) the payment of any dividend, distribution or redemption within 60 days after the date of declaration thereof or call for
redemption, if at the date of declaration or call for redemption such payment or redemption would have complied with the provisions of the Indenture;
(2) the redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness of the Issuer made by exchange
for, or out of the proceeds of the substantially concurrent sale of, new
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Indebtedness of the Issuer, which is incurred in compliance with Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock so long as:
(a) the principal amount (or accreted value) of such new Indebtedness does not exceed the principal amount, plus any accrued
and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value, plus the amount of any premium and any tender premiums, defeasance costs or other fees and expenses incurred in connection with the
issuance of such new Indebtedness,
(b) such Indebtedness has a final scheduled maturity date equal to or later than the
earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity of the notes, and
(c) such Indebtedness has a Weighted Average Life to Maturity which is not less than the shorter of (x) the remaining
Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness
being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any notes then outstanding were instead due on such date one year following the maturity date of such notes
(
provided
that, in the case of this subclause (C)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the notes in excess of, or prior to, the scheduled principal payments due prior to
such maturity for the Indebtedness being refunded or refinanced or defeased);
(3) a Restricted Payment to pay for the
repurchase, retirement or other acquisition or retirement for value of common Equity Interests of the Issuer held by any future, present or former employee, director or consultant of the Issuer, any of its Subsidiaries pursuant to any management
equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement;
provided
,
however
, that the aggregate Restricted Payments made under this clause (3) do not exceed in any
calendar year $20.0 million, plus in calendar year 2016 an amount up to $10.0 million that was unused in calendar years 2014 and 2015 under the same clause (3) contained in the indenture governing the Issuers existing notes (with unused
amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $40.0 million in any calendar year);
provided
further
that such amount in any
calendar year may be increased by an amount not to exceed:
(a) the cash proceeds from the sale of Equity Interests (other
than Disqualified Stock) of the Issuer to members of management, directors or consultants of the Issuer, any of its Subsidiaries that occurred after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not
otherwise been applied to the payment of Restricted Payments by virtue of clause (c) of the preceding paragraph,
plus
(b) the cash proceeds of key man life insurance policies received by the Issuer and its Restricted Subsidiaries after the
Issue Date;
less
(c) the amount of any Restricted Payments previously made pursuant to clauses (A) and
(B) of this clause (3);
provided
that the Issuer may elect to apply all or any portion of the aggregate increase contemplated
by subclauses (A) and (B) above in any calendar year;
(4) the declaration and payment of dividends to holders of
any class or series of Disqualified Stock of the Issuer or any other Restricted Subsidiary issued in accordance with the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock to the extent such dividends are included in the definition of Fixed Charges;
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(5) the declaration and payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) issued by the Issuer after the Issue Date;
provided
that the aggregate amount of dividends paid pursuant to this clause (5) shall not exceed the aggregate amount of cash actually
received by the Issuer from the sale of such Designated Preferred Stock;
provided
,
however
, that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date
of issuance of such Designated Preferred Stock, after giving effect to such issuance on a
pro forma
basis, the Issuer and the Restricted Subsidiaries would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;
(6) Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments
made pursuant to this clause (6) that are at the time outstanding, not to exceed the greater of $70.0 million and 1.0% of Total Assets at the time of such investment;
provided
, that the dollar amount of Investments made pursuant to this
clause (6) may be reduced by the Fair Market Value of the proceeds received by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with the fair market value of each
Investment being measured at the time made and without giving effect to subsequent changes in value and, for the avoidance of doubt, any return of capital with respect to an Investment reduces the Fair Market Value of such Investment then
outstanding for the purpose of this clause (6) by the amount of such return of capital);
(7) repurchases of Equity
Interests deemed to occur (i) upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or (ii) in connection with the exercise or vesting of stock options or
similar instruments to the extent necessary to pay withholding taxes related to such exercise or vesting of stock options or similar instruments;
(8) Restricted Payments that are made with Excluded Contributions;
(9) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this
clause (9) not to exceed the greater of $200.0 million or 3.0% of Total Assets;
(10) Restricted Payments by the
Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(11) the purchase by the Issuer of fractional shares arising out of stock dividends, splits or combinations or business
combinations;
(12) distributions or payments of Receivables Fees;
(13) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness required pursuant
to the provisions similar to those described under the captions Repurchase at the Option of HoldersChange of Control and Repurchase at the Option of HoldersAsset Sales;
provided
that there is a
concurrent or prior Change of Control Offer or Asset Sale Offer, as applicable, and all notes tendered by Holders in connection with such Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for
value;
(14) (a) any Restricted Payment in exchange for, or out of the proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary) of, Equity Interests of the Issuer (other than any Disqualified Stock) (
Refunding Capital Stock
) and (b) if immediately prior to the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Issuer (
Retired Capital Stock
) pursuant to clause (a), the Issuer and the Restricted Subsidiaries would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00, the
declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such
retirement; and
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(15) the payment of a dividend on common stock of the Issuer of up to the greater
of $100.0 million or 1.5% of Total Assets in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years but subject to a maximum of the greater of $200.0 million or 3.0% of Total Assets in any
calendar year);
provided
however
, that at the time of, and after giving effect to, any Restricted Payment permitted under
clauses (3), (4), (5), (6), (9), (14) and (15), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this covenant, in the event that a proposed Restricted Payment (or a portion thereof) meets the
criteria of clauses (1) through (15) above or is entitled to be made pursuant to the first paragraph of this covenant or the definition of Permitted Investments, the Issuer will be able to classify or later reclassify such
Restricted Payment (or a portion thereof) between such clauses (1) through (15) and such first paragraph and the definition of Permitted Investments in any manner that complies with this covenant.
As of the time of issuance of the notes, all of the Issuers Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any
Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition
of Investment. Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to the first paragraph of this covenant or under clause (6), (8) or (9) of the
second paragraph of this covenant, or pursuant to the definition of Permitted Investments
,
and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any
of the restrictive covenants set forth in the Indenture.
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock.
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, (collectively,
incur
and collectively, an
incurrence
) with respect to any Indebtedness (including Acquired
Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or preferred stock;
provided
,
however
, that the Issuer may incur
Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, if
the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 to 1.00, determined on a
pro forma
basis (including a
pro forma
application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
The foregoing limitations will not apply to:
(a) the incurrence of Indebtedness of the Issuer or any of the Restricted Subsidiaries under Credit Facilities;
provided
,
however
, that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (a) and then outstanding does not exceed the greater of (x) $825.0 million and
(y) 12.5% of Total Assets at the time of such incurrence;
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(b) the incurrence by the Issuer of Indebtedness represented by the notes (other
than any Additional Notes);
(c) Existing Indebtedness (other than Indebtedness described in clauses (a) and (b));
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by the Issuer
or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and
including all Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $70.0 million and
(y) 1% of Total Assets;
(e) Indebtedness incurred by the Issuer or any Restricted Subsidiary constituting
reimbursement obligations with respect to letters of credit and bank guarantees issued, including without limitation letters of credit in respect of workers compensation claims, health, disability or other benefits to employees or former
employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental
authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims;
provided
,
however
, that upon the drawing of such letters of credit or the incurrence of such Indebtedness,
such obligations are reimbursed within 30 days following such drawing or incurrence;
(f) Indebtedness arising from
agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary,
other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of the Issuer to a Restricted Subsidiary;
provided
that, other than in the case of intercompany current
liabilities incurred in connection with the cash management or similar operations of the Issuer and the Restricted Subsidiaries to finance working capital needs of the Restricted Subsidiaries, any such Indebtedness is subordinated in right of
payment to the notes;
provided further
that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of
any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause (g);
(h) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary;
provided
that, any
subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed in each case to be an incurrence of such Indebtedness not permitted by this clause (h);
(i) shares of preferred stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary;
provided
that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to
the Issuer or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause (i);
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting:
(A) interest rate risk; or
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(B) exchange rate risk with respect to any currency exchange; or
(C) commodity risk; or
(D) any combination of the foregoing;
(k) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any
Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(l)
Indebtedness, Disqualified Stock and preferred stock of the Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and
liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l), does not at any one time outstanding exceed the sum of:
(x) the greater of (1) $350.0 million and (2) 5.0% of Total Assets; and
(y) 100% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of
Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses
(c)(2) and (c)(3) of the first paragraph of Limitation on Restricted Payments to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other investments,
payments or exchanges pursuant to the second paragraph of Limitation on Restricted Payments or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof);
(m) (1) any guarantee by the Issuer of Indebtedness or other obligations of any Restricted Subsidiary so long as the
incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Indenture, or
(2) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer or another Restricted Subsidiary so long as the
incurrence of such Indebtedness incurred by the Issuer or such other Restricted Subsidiary is permitted under the terms of the Indenture;
(n) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which
serves to refund or refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this covenant and clauses (b) and (c) above, this clause (n) and clauses (o) and
(q) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refund or refinance such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to
pay premiums (including tender premiums), defeasance costs and fees in connection therewith (the
Refinancing Indebtedness
) prior to its respective maturity;
provided
,
however
, that such Refinancing
Indebtedness:
(1) except in the case of Indebtedness incurred pursuant to clause (q) below or any Refinancing
Indebtedness of such Indebtedness, has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the shorter of (x) remaining Weighted Average Life to Maturity of the Indebtedness,
Disqualified Stock or preferred stock being refunded or refinanced and (y) in the case of Subordinated Indebtedness, the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so
redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any notes then outstanding were instead due on such date one year following the maturity date of such notes
(
provided
that, in the case of this subclause (n)(1)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the notes in excess of, or prior to, the scheduled principal payments
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due prior to such maturity for the Indebtedness, Disqualified Stock or preferred stock being refunded or refinanced or defeased);
(2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated in right of payment to the
notes, such Refinancing Indebtedness is subordinated in right of payment to the notes at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must
be Disqualified Stock or preferred stock, respectively; and
(3) shall not include
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(x)
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Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that refinances Indebtedness, Disqualified Stock or preferred stock of the Issuer; or
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(y)
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Indebtedness, Disqualified Stock or preferred stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or preferred stock of an Unrestricted Subsidiary;
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(o) Indebtedness, Disqualified Stock or preferred stock of Persons that are acquired by the Issuer or any Restricted Subsidiary
or amalgamated or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of the Indenture;
provided
that such Indebtedness, Disqualified Stock or preferred stock is not incurred in contemplation of such acquisition,
amalgamation or merger;
provided further
that after giving effect to such acquisition, amalgamation or merger, either:
(1) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first sentence of this covenant; or
(2) the Fixed Charge Coverage Ratio is not less than
immediately prior to such acquisition, amalgamation or merger;
(p) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
provided
that such Indebtedness is extinguished within five Business Days of its incurrence;
(q) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock, including any predelivery
payment financing, incurred by the Issuer or any of its Restricted Subsidiaries, relating to the purchase, lease, acquisition, improvement or modification of any aircraft, engines, spare parts or similar assets, including in the form of financing
from aircraft or engine manufacturers or their affiliates and whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, so long as the amount of such indebtedness does not exceed the purchase price of such
aircraft and any improvements or modifications thereto and is incurred not later than 365 days after the date of such purchase, lease, acquisition, improvement or modification;
(r) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to Credit
Facilities, in a principal amount not in excess of the stated amount of such letter of credit; and
(s) Indebtedness of the
Issuer or any Restricted Subsidiary consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
For purposes of determining compliance with this covenant, in the event that an item of Indebtedness, Disqualified Stock or preferred stock
meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or preferred stock described in clauses (a) through (s) above or is entitled to be incurred pursuant to the first paragraph of this
covenant, the Issuer, in its sole discretion, may classify or reclassify such item of Indebtedness in any manner that complies with this covenant and the Issuer may divide and classify an item of Indebtedness in more than one of the types of
Indebtedness described in the first and
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second paragraphs above. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness, Disqualified Stock or preferred stock will not be
deemed to be an incurrence of Indebtedness, Disqualified Stock or preferred stock for purposes of this covenant.
For purposes of
determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency
exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt;
provided
that if such Indebtedness is incurred to refinance other Indebtedness denominated
in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar- denominated
restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
The Indenture will provide that the Issuer will not, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is
subordinated or junior in right of payment to any Indebtedness of the Issuer unless such Indebtedness is expressly subordinated in right of payment to the notes to the extent and in the same manner as such Indebtedness is subordinated in right of
payment to other Indebtedness of the Issuer.
The Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to
secured Indebtedness merely because it is unsecured or (2) Indebtedness as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral.
Liens
The Issuer will not create,
incur, assume or otherwise cause or suffer to exist or become effective any Lien that secures obligations under any Indebtedness of the Issuer or any Guarantor (the Initial Lien) of any kind upon any of its property or assets, now owned
or hereafter acquired, except any Initial Lien if (i) the notes are equally and ratably secured with (or on a senior basis to, in the case such Initial Lien secures any Subordinated Indebtedness) the obligations secured by such Initial Lien or
(ii) such Initial Lien is a Permitted Lien.
Any Lien created for the benefit of the Holders pursuant to clause (i) of the
preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.
Amalgamation, Merger, Consolidation or Sale of All or Substantially All Assets
The Issuer may not consolidate, amalgamate or merge with or into or wind up into (whether or not the Issuer 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 corporation or the Person formed by or surviving any such consolidation, amalgamation or merger
(if other than the Issuer) 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 a Permitted Jurisdiction (such Person, as the case may be, being
herein called the
Successor Company
);
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(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 or Event of Default exists;
(4) immediately after giving
pro forma
effect to such transaction, as if such transaction had occurred at the beginning
of the applicable four-quarter period,
(a) the Successor Company would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock or
(b) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be not less than such
ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction; and
(5) the Issuer shall have
delivered to the Trustee an Officers Certificate and an opinion of counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with the Indenture and, if a supplemental
indenture is required in connection with such transaction, such supplement shall comply with the applicable provisions of the Indenture.
The Successor Company will succeed to, and be substituted for the Issuer under the Indenture and the notes. Notwithstanding the foregoing
clauses (3) and (4),
(a) any Restricted Subsidiary may consolidate with, amalgamate or merge into or transfer all or
part of its properties and assets to the Issuer; and
(b) the Issuer may amalgamate or merge with an Affiliate incorporated
solely for the purpose of reincorporating the Issuer in any Permitted Jurisdiction so long as the amount of Indebtedness of the Issuer and the Restricted Subsidiaries is not increased thereby.
Transactions with Affiliates
The
Issuer will not, and will not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an
Affiliate Transaction
) involving aggregate payments or
consideration in excess of $25.0 million, unless:
(a) such Affiliate Transaction is on terms that are not materially less
favorable to the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person as determined by the Board of Directors or senior
management of the Issuer in good faith; and
(b) the Issuer delivers to the Trustee with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25.0 million, a resolution adopted by the majority of the Board of Directors approving such Affiliate Transaction and set forth in an
Officers Certificate certifying that such Affiliate Transaction complies with clause (a) above.
The foregoing provisions will
not apply to the following:
(1) transactions between or among the Issuer and/or any of the Restricted Subsidiaries;
(2) Restricted Payments permitted by the provisions of the Indenture described above under the covenant
Limitation on Restricted Payments and Permitted Investments;
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(3) the payment of reasonable and customary fees paid to, and indemnities
provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary;
(4)
transactions in which the Issuer or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a
financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5) payments or loans (or
cancellation of loans) to employees or consultants of the Issuer, or any Restricted Subsidiary which are approved by a majority of the Board of Directors of the Issuer in good faith;
(6) any agreement as in effect as of the Issue Date, or any amendment or replacement thereto (so long as any such amendment,
taken as a whole, is not materially less favorable to the Issuer and its Restricted Subsidiaries than the agreement in effect on the date of the Indenture (as determined by the Board of Directors or senior management of the Issuer in good faith));
(7) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the
terms of, any shareholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter;
provided
,
however
, that the existence of, or the performance by the Issuer or any Restricted Subsidiary of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only
be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement, taken as a whole, is not materially less favorable to the Issuer and its Restricted Subsidiaries than the agreement in effect on the date of
the Indenture (as determined by the Board of Directors or senior management of the Issuer in good faith);
(8) transactions
with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Issuer and the Restricted
Subsidiaries, in the reasonable determination of the Issuer, or are on terms, taken as a whole, at least as favorable as might reasonably have been obtained at such time from an unaffiliated party (as determined by the Board of Directors or senior
management of the Issuer in good faith);
(9) the issuance of Equity Interests (other than Disqualified Stock) of the
Issuer to any Affiliate of the Issuer;
(10) transactions or payments pursuant to any employee, officer or director
compensation or benefit plans, employment agreements, severance agreement, indemnification agreements or any similar arrangements entered into in the ordinary course of business or approved in good faith by the Board of Directors or senior
management of the Issuer;
(11) transactions in the ordinary course with (i) Unrestricted Subsidiaries or
(ii) joint ventures in which the Issuer or a Subsidiary of the Issuer holds or acquires an ownership interest (whether by way of Capital Stock or otherwise) so long as the terms of any such transactions, taken as a whole, are not materially
less favorable to the Issuer or Subsidiary participating in such joint ventures than they are to other joint venture partners as determined by the Board of Directors in good faith;
(12) transactions with a Person (other than an Unrestricted Subsidiary of the Issuer) that is an Affiliate of the Issuer solely
because the Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(13) sales of accounts receivable, or participations therein, in connection with any Receivables Facility;
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(14) any transaction in which the Issuer delivers to the Trustee a copy of a
written opinion as to the fairness of such transaction to the Issuer or such Restricted Subsidiary from a financial point of view issued by an Independent Financial Advisor; and
(15) transactions with a Person solely in its capacity as a holder of Indebtedness of the Issuer or any of its Subsidiaries;
provided
such transaction is with all holders of such class of Indebtedness (
provided
the holders of such class includes non-Affiliate holders) and such Person is treated no more favorably than holders of Indebtedness of the Issuer or
such Subsidiaries generally as determined by the Board of Directors or management of the Issuer.
Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:
(a) (1) pay dividends or make any other distributions to the Issuer or any Restricted Subsidiary on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits or
(2) pay any Indebtedness owed to the
Issuer or any Restricted Subsidiary;
(b) make loans or advances to the Issuer or any Restricted Subsidiary; or
(c) sell, lease or transfer any of its properties or assets to the Issuer or any Restricted Subsidiary, except (in each case)
for such encumbrances or restrictions existing under or by reason of:
(1) contractual encumbrances or restrictions in
effect on the Issue Date;
(2) the Indenture and the notes;
(3) purchase money obligations for property acquired that impose restrictions of the nature discussed in clause (c) above
on the property so acquired;
(4) applicable law or any applicable rule, regulation or order;
(5) any agreement or other instrument of a Person (or assets) acquired by the Issuer or any Restricted Subsidiary in existence
at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person,
so acquired;
(6) contracts for the sale of assets, including, without limitation, customary restrictions with respect to
a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary that impose restrictions on the assets to be sold;
(7) secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Liens that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary
course of business or consistent with past practice or industry practice;
(9) customary provisions in joint venture
agreements and other similar agreements relating to such joint venture;
(10) customary provisions contained in leases,
licenses and other agreements entered into in the ordinary course of business;
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(11) any such encumbrance or restriction with respect to a Foreign Subsidiary
pursuant to an agreement governing Indebtedness, Disqualified Stock or preferred stock incurred by such Foreign Subsidiary that was permitted by the terms of the Indenture to be incurred;
(12) any such encumbrance or restriction pursuant to an agreement governing Indebtedness permitted to be incurred by the terms
of the Indenture, which encumbrances or restrictions are, in the good faith judgment of the Board of Directors or senior management of the Issuer not materially more restrictive, taken as a whole, than customary provisions in comparable financings
and that the management of the Issuer determines, at the time of such financing, will not materially impair the Issuers ability to make payments as required under the Notes;
(13) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any
amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above;
provided
that such
amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, not materially more restrictive, taken as a whole, with respect to such encumbrance
and other restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and
(14) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Board of
Directors of the Issuer, are necessary or advisable to effect such Receivables Facility.
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 Securities and Exchange Commission, the Indenture will require the Issuer to file with the
Commission (and make available to the Trustee and Holders (without exhibits), without cost to each Holder, within 15 days after it files them with the Commission),
(a) within 90 days (or any time period then in effect under the rules and regulations of the Exchange Act for a non-accelerated
filer) plus any grace period provided by Rule 12b-25 under the Exchange Act, after the end of each fiscal year, 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;
(b) within 45 days (or any time period then in effect under the rules and
regulations of the Exchange Act) plus any grace period provided by Rule 12b-25 under the Exchange Act, after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q, containing the information required to be
contained therein, or any successor or comparable form;
(c) promptly from time to time after the occurrence of an event
required to be therein reported, such other reports on Form 8-K, or any successor or comparable form; and
(d) any other
information, documents and other reports which the Issuer would be required to file with the Commission if it were subject to Section 13 or 15(d) of the Exchange Act;
provided
that the Issuer shall not be so obligated to file such reports with the Commission if the Commission does not permit such
filing, in which event the Issuer will make available such information to prospective purchasers of notes, in addition to providing such information to the Trustee and the Holders, in each case within 15 days after the time the Issuer would be
required to file such information with the Commission, if it were subject to Section 13 or 15(d) of the Exchange Act.
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The Issuer will be deemed to have furnished such information referred to in this covenant to the
Trustee and the Holders of notes if the Issuer has filed or furnished such information in reports filed with the Commission and such reports are publicly available on the Commissions website;
provided
,
however
, that the Trustee
shall have no obligation whatsoever to determine whether or not such information, documents or reports have been so filed or furnished.
Events of
Default and Remedies
The following events constitute
Events of Default
with respect to the notes under the
Indenture:
(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or
premium, if any, on the notes issued under the Indenture;
(2) default for 30 days or more in the payment when due of
interest on or with respect to the notes issued under the Indenture;
(3) failure by the Issuer for 60 days after receipt
of written notice given by the Trustee or the Holders of at least 25% in principal amount of the notes then outstanding and issued under the Indenture to comply with any of its other agreements in the Indenture or the notes;
(4) 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 or any Restricted Subsidiary or the payment of which is guaranteed by the Issuer or any Restricted Subsidiary, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists or is created after the issuance of the notes, if both:
(a) such default either:
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results from the failure to pay any such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods); or
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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 $50.0 million or more
at any one time outstanding;
(5) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in
excess of $50.0 million, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been
commenced by any creditor upon such judgment or decree which is not promptly stayed; or
(6) certain events of bankruptcy
or insolvency with respect to the Issuer or any Significant Subsidiary.
If any Event of Default (other than of a type specified in clause
(6) above) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in principal amount of the then outstanding notes issued under the Indenture may declare the principal, premium, if any, interest and any other
monetary obligations on all the then outstanding notes issued under the Indenture to be due and payable immediately.
Upon the
effectiveness of such declaration, such principal and interest 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.
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Holders may not enforce the Indenture or the notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding notes
issued under the Indenture may direct the Trustee in its exercise of any trust or power. The Indenture will provide that the Trustee may withhold from Holders notice of any continuing Default or Event of Default, except a Default or Event of Default
relating to the payment of principal, premium, if any, or interest on the notes, 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.
The Indenture will provide that the Holders of a majority in aggregate
principal amount of the then outstanding notes issued thereunder by written notice to the Trustee may on behalf of the Holders waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, premium, if any, or the principal of any note held by a non-consenting Holder. In the event of any Event of Default specified in clause (4), such Event of Default and all consequences thereof
(excluding any resulting payment default, other than as a result of the acceleration of the notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of
Default arose
(x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, or
(y) 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
(z) if the default that is the basis for such Event of Default has been cured.
The Indenture will provide that the Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture,
and the Issuer is required, within five Business Days, upon becoming aware of any Default or Event of Default or any default under any document, instrument or agreement representing Indebtedness of the Issuer, to deliver to the Trustee a statement
specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Shareholders
No director, officer, employee, incorporator or shareholder of the Issuer or any Restricted Subsidiary shall have any liability for any
obligations of the Issuer or any Restricted Subsidiary under the notes 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 a note 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 Commission that such a waiver is against
public policy.
Legal Defeasance and Covenant Defeasance
The obligations of the Issuer under the Indenture will terminate (other than certain obligations) and will be released upon payment in full of
all of the notes under the Indenture. The Issuer may, at its option and at any time, elect to have all of its obligations under the Indenture discharged (
Legal Defeasance
) and cure all then existing Events of Default except
for:
(1) the rights of Holders of notes issued under the Indenture to receive payments in respect of the principal of,
premium, if any, and interest on such notes when such payments are due solely out of the trust created pursuant to the Indenture,
(2) the Issuers obligations under the Indenture concerning issuing temporary notes, registration of such notes,
mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust,
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(3) the rights, powers, trusts, duties and immunities of the Trustee, and the
Issuers 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 released with respect to certain covenants that are
described in the Indenture (
Covenant Defeasance
) and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default. In the event Covenant Defeasance occurs, certain events (not
including bankruptcy, receivership, rehabilitation and insolvency events pertaining to the Issuer) described under Events of Default will no longer constitute an Event of Default.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, 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 of, premium, if any, and interest due on the notes on the
stated maturity date or on the redemption date, as the case may be, of such principal, premium, if any, or interest on the notes;
provided
that, with respect to 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 deficit on the date of redemption
(any such amount, the
Applicable Premium Deficit
) only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officers 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 in the United States
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 the 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 in the United States shall confirm that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes 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;
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders 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 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 Covenant Defeasance had not occurred;
(4) no Default or Event of Default with respect to the outstanding notes (other than that resulting from borrowing funds to be
applied to make such deposit or the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;
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(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under any other material agreement or instrument (other than the Indenture) to which, the Issuer is a party or by which the Issuer is bound (other than that resulting from borrowing funds to be applied to make
such deposit and the granting of Liens in connection therewith);
(6) the Issuer shall have delivered to the Trustee an
Officers 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 others; and
(7) the Issuer shall have delivered to the Trustee an Officers Certificate and an opinion of counsel in the United States
(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, when either
(a) all notes theretofore authenticated
and delivered, except lost stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(b) (1) all notes not theretofore delivered to such Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise or will become due and payable within one year, and the Issuer has irrevocably deposited or caused to be deposited with such Trustee as trust funds in trust solely for the benefit of the Holders, 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 such 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, with respect to 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 date of redemption. Any Applicable Premium Deficit shall be set forth in an Officers 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) no Default or Event of Default
with respect to the outstanding notes (other than that resulting from borrowing funds to be applied to make such deposit or the granting of Liens in connection therewith) 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, any other instrument to which the Issuer is a party or by which the Issuer is bound (other than an instrument to be
terminated contemporaneously with or prior to the borrowing of funds to be applied to make such deposit and the granting of Liens in connection therewith);
(3) the Issuer has paid or caused to be paid all sums payable by it under the Indenture; and
(4) the Issuer has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward
the payment of the notes at maturity or the redemption date, as the case may be.
In addition, the Issuer must deliver an Officers
Certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
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Paying Agent and Registrar for the Notes
The Issuer will maintain one or more paying agents for the notes. The initial paying agent for the notes will be the Trustee.
The Issuer will also maintain a registrar. 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 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, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. 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 the
mailing of a notice of redemption of notes to be redeemed.
The registered Holder of a note will be treated as the owner of the note for
all purposes.
Amendment, Supplement and Waiver
Except as provided in the next four succeeding paragraphs, the Indenture and the notes issued thereunder may be amended or supplemented with
the consent of the Holders of a majority in principal amount of the notes then outstanding and issued under the Indenture, including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the
notes, and any existing Default or Event of Default or compliance with any provision of the Indenture or the notes issued thereunder may be waived with the consent of the Holders of a majority in principal amount of the then outstanding notes issued
under the Indenture, other than notes beneficially owned by the Issuer or its Affiliates (including consents obtained in connection with a purchase of or tender offer or exchange offer for notes).
The Indenture will provide that, without the consent of each Holder affected, an amendment or waiver may not, with respect to the notes held
by a non-consenting Holder:
(1) reduce the principal amount of notes,
(2) reduce the principal of or change the fixed maturity of any note or alter or waive the provisions with respect to the
redemption of the notes (other than provisions relating to the covenants described above under the caption Repurchase at the Option of Holders),
(3) reduce the rate of or change the time for payment of interest on any note,
(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the notes issued
under the Indenture, except a rescission of acceleration of the notes by the Holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration, or in respect of a
covenant or provision contained in the Indenture which cannot be amended or modified without the consent of all Holders,
(5) make any note payable in money other than that stated in the notes,
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(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,
(7) make any change in these amendment and waiver provisions,
(8) impair the right of any Holder to receive payment of principal of, or interest on such Holders notes on or after the
due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holders notes, or
(9) make any change to or modify the ranking of the notes that would adversely affect the Holders.
Notwithstanding the foregoing, without the consent of any Holder, the Issuer, and the Trustee may amend or supplement the Indenture or the
notes:
(1) to cure any ambiguity, omission, mistake, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of certificated notes;
(3) to comply with the covenant relating to amalgamations, mergers, consolidations and sales of assets;
(4) to provide for the assumption of the Issuers obligations to Holders;
(5) to make any change that would provide any additional rights or benefits to the Holders or that does not materially
adversely affect the 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;
(7) to comply with requirements of the Commission 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 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 guarantees of the notes under the Indenture in accordance with the terms of the Indenture; or
(11) to conform the text of the Indenture or the notes to any provision of the Description of the Notes to the
extent that such provision in the Description of the Notes was intended to be a verbatim recitation of a provision of the Indenture or the notes as evidenced in an Officers Certificate.
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 will contain certain limitations on the rights of the Trustee, 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
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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 Commission for permission to continue or resign.
The Indenture will provide that the Holders of a majority in
principal amount of the outstanding notes issued thereunder 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 will
provide 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 of a prudent person 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 and the notes 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. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. For purposes of the Indenture, unless
otherwise specifically indicated, the term
consolidated
with respect to any Person refers to such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such
Unrestricted Subsidiary were not an Affiliate of such Person.
Acquired Indebtedness
means, with respect to any
specified Person,
(1) Indebtedness of any other Person existing at the time such other Person is amalgamated or merged
with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of
such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified 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.
Aircraft Finance Subsidiary
means any special
purpose Subsidiary that facilitates the acquisition, ownership, leasing or financing of aircraft or any parts relating to aircraft, including any securitization financing in connection therewith.
Asset Sale
means
(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions,
of property or assets (including by way of a sale and leaseback) of the Issuer or any Restricted Subsidiary (each referred to in this definition as a disposition), or
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(2) the issuance or sale of Equity Interests of any Restricted Subsidiary,
whether in a single transaction or a series of related transactions (other than preferred stock of Restricted Subsidiaries issued in compliance with the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness
and Issuance of Disqualified Stock and Preferred Stock) in each case, other than:
(a) (i) a disposition of
Cash Equivalents or dispositions of any surplus, obsolete, damaged or worn out assets, or (ii) any disposition of inventory or goods held for sale or other assets in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions
described above under Certain CovenantsAmalgamation, Merger, Consolidation or Sale of All or Substantially All Assets or any disposition that constitutes a Change of Control pursuant to the Indenture;
(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant
described above under Certain CovenantsLimitation on Restricted Payments;
(d) any disposition of
assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate Fair Market Value of less than $30.0 million;
(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Issuer or by the Issuer
or a Restricted Subsidiary to a Restricted Subsidiary;
(f) to the extent allowable under Section 1031 of the
Internal Revenue Code of 1986, as amended, any exchange of like property (excluding any boot thereon) for use in a Similar Business;
(g) the lease, assignment, sub-lease or license of any real or personal property, including any aircraft, and any disposition
in accordance with the terms of such lease;
(h) any sale of Equity Interests in, or Indebtedness or other securities of,
an Unrestricted Subsidiary or joint venture (with the exception of Investments in Unrestricted Subsidiaries acquired pursuant to clause (j) of the definition of Permitted Investments);
(i) foreclosures on assets;
(j) (i) sales of accounts receivable, or participations therein, in connection with the Credit Facilities or any
Receivables Facility and (ii) the sale or discount of accounts receivable in connection with the compromise or collection thereof or in bankruptcy or similar proceeding;
(k) the surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claim of any
kind;
(l) the creation of a Lien;
(m) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the
Issue Date, including, without limitation, sale leasebacks and asset securitizations permitted by the Indenture;
(n) the
lease, assignment, sublease, license or sublicense of any real or personal property that does not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries as determined by the Board of
Directors or management of the Issuer;
(o) the transfers, conveyances or other dispositions of any assets resulting from
any condemnation or eminent domain or that are subject to casualty proceedings; and
(p) the issuance of directors
qualifying shares and shares issued to foreign nationals as required by applicable law.
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Board of Directors
means, with respect to a Person, the board of
directors of such Person or any duly authorized committee thereof.
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, membership interests (whether general or limited) or shares in the capital of a company, 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.
Capitalized Lease Obligation
means, at the time any determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
Cash Equivalents
means
(1) United States dollars,
(2) pounds sterling,
(3) (a) euro, or any national currency of any participating member state in the European Union,
(b) Canadian dollars, or
(c) 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,
(4) securities issued or directly and fully and unconditionally guaranteed or
insured by the United States or Canadian 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,
(5) certificates of deposit, time deposits and eurodollar 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 in excess of $500.0 million,
(6) repurchase obligations for underlying securities of the types described in clauses (4) and (5) above entered into
with any financial institution meeting the qualifications specified in clause (5) above,
(7) commercial paper rated
at least P-2 by Moodys or at least A-2 by S&P and in each case maturing within 12 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,
(9) readily marketable direct obligations issued by any state of the United States of America or any
political subdivision thereof or any Province of Canada having one of the two highest rating categories obtainable from either Moodys or S&P with maturities of 24 months or less from the date of acquisition and
(10) Indebtedness or preferred stock issued by Persons with a rating of A or higher from S&P or A2
or higher from Moodys with maturities of 12 months or less from the date of acquisition.
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Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies
other than those set forth in clauses (1) through (3) above;
provided
that such amounts are converted into any currency listed in clauses (1) through (3) above as promptly as practicable and in any event within ten
Business Days following the receipt of such amounts.
Change of Control
means:
(1) any
person
or group (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act,
other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total
outstanding Voting Stock of the Issuer;
(2) (a) all or substantially all of the assets of the Issuer and the
Restricted Subsidiaries, taken as a whole, are sold or otherwise transferred to any Person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (b) the Issuer amalgamates, consolidates or merges with or into
another Person or any Person consolidates, amalgamates or merges with or into the Issuer, in either case under this clause (2), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons
beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Issuer, immediately prior to such consummation do not
beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Stock representing a majority of the total voting power of the Voting Stock of the Issuer, or the applicable surviving or transferee Person;
provided
that
this clause shall not apply (i) in the case where immediately after the consummation of the transactions Permitted Holders beneficially own Voting Stock representing in the aggregate a majority of the total voting power of the Issuer, or the
applicable surviving or transferee Person or (ii) to an amalgamation or a merger of the Issuer with or into (x) a corporation, limited liability company or partnership or (y) a wholly-owned subsidiary of a corporation, limited
liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no Person or group (other than Permitted Holders), which beneficially owns Voting Stock representing 50% or more of the
voting power of the total outstanding Voting Stock of such entity and, in the case of clause (y), the parent of such wholly-owned subsidiary guarantees the Issuers obligations under the notes and the Indenture; or
(3) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the shareholders of the
Issuer.
For purposes of this definition, if the Issuer becomes a direct or indirect Subsidiary of a holding company, such holding company
shall not itself be considered a Person or group for purposes of clauses (1) and (2) above;
provided
that (a) such holding company beneficially owns, directly or indirectly, 100% of the Capital Stock of the Issuer and
(b) upon completion of such transaction, no Person or group (other than one or more Permitted Holders) beneficially owns 50% or greater of the voting power of the total outstanding voting stock of such holding company.
Change of Control Triggering Event
means (1) if the notes have an Investment Grade Rating from at least two
Rating Agencies at the time of the applicable Change of Control, the occurrence of both (i) a Change of Control and (ii) a Rating Decline, and (2) if the notes do not have an Investment Grade Rating at the time of the applicable
Change of Control from at least two Rating Agencies, the occurrence of a Change of Control.
Consolidated Depreciation and
Amortization Expense
means with respect to any Person for any period, the total amount of depreciation and amortization expense, including any amortization of deferred financing fees, amortization in relation to terminated Hedging
Obligations and amortization of net lease discounts and lease incentives, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
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Consolidated Interest Expense
means, with respect to any Person for any
period, the sum, without duplication, of:
(a) consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount resulting from the issuance of Indebtedness at less than par, non-cash interest payments (but excluding
any non-cash interest expense attributable to the movement in the mark to market valuation of or hedge ineffectiveness expenses of Hedging Obligations or other derivative instruments pursuant to Financial Accounting Standards Board Statement
No. 133Accounting for Derivative Instruments and Hedging Activities and excluding non-cash interest expense attributable to the amortization of gains or losses resulting from the termination prior to the Issue Date of Hedging
Obligations), the interest component of Capitalized Lease Obligations and net payments, if any, pursuant to interest rate Hedging Obligations, and excluding amortization of deferred financing fees and any expensing of other financing fees), and
(b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued
less
(c) interest income for such period.
Consolidated Net Income
means, with respect to any Person for any period, the aggregate of the Net Income, of such
Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP;
provided
,
however
, that
(1) any net after-tax extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or
expenses (including, without limitation, relating to severance, relocation and new product introductions) shall be excluded,
(2) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such
period,
(3) any net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses
on disposal of disposed or discontinued operations shall be excluded,
(4) any net after-tax gains or losses (less all fees
and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Board of Directors or management of the Issuer, shall be excluded,
(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is
accounted for by the equity method of accounting, shall be excluded;
provided
that Consolidated Net Income of the Issuer shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to
the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(6)
solely for the purpose of determining the amount available for Restricted Payments under clause (c)(1) of the first paragraph of Certain CovenantsLimitation on Restricted Payments, the Net Income for such period of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental
approval (which has not been obtained other than pursuant to customary filings) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation
applicable to that Restricted Subsidiary or its shareholders, unless such restriction with respect to the payment of dividends or in similar distributions has been legally waived;
provided
that Consolidated Net Income of the Issuer will be
increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included
therein,
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(7) the effects of adjustments resulting from the application of purchase
accounting in relation to any acquisition that is consummated after April 4, 2012, net of taxes, shall be excluded,
(8) any net after-tax income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative
instruments shall be excluded,
(9) any impairment charge or asset write-off pursuant to Financial Accounting Standards
Board Statement No. 142 and No. 144 and the amortization of intangibles arising pursuant to No. 141 shall be excluded,
(10) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options or other
rights to officers, directors or employees shall be excluded, and
(11) unrealized gains or losses relating to Hedging
Obligations and mark-to-market of Indebtedness denominated in foreign currencies shall be excluded.
Notwithstanding the foregoing, for
the purpose of the covenant described under Certain CovenantsLimitation on Restricted Payments only (other than clause (c)(4) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other
disposition of Restricted Investments made by the Issuer and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and the Restricted Subsidiaries, any repayments of loans and advances which
constitute Restricted Investments by the Issuer or any Restricted Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted under such covenant pursuant to clause (c)(4) thereof.
Consolidated Tangible
Assets
at any date means the total assets of the Issuer and its Subsidiaries reported on the most recently prepared consolidated balance sheet of the Issuer filed with the SEC or delivered to the Trustee as of the end of a fiscal
quarter, less all assets shown on such consolidated balance sheet that are classified and accounted for as intangible assets of the Issuer or any of its Subsidiaries or that otherwise would be considered intangible assets under generally accepted
accounting principles, including, without limitation, franchises, patents and patent applications, trademarks, brand names, unamortized debt discount and goodwill.
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.
Credit Facilities
means one or more debt facilities, commercial paper facilities, credit agreements, indentures or
other agreements, in each case with banks or other institutional lenders, purchasers, investors, trustees or agents providing for revolving credit loans, term loans, receivables financing, including through the sale of receivables to such lenders or
to special purpose entities formed to borrow from such lenders against receivables, letters of credit or other extensions of credit or other indebtedness, in each case including any notes,
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guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings
thereof and any debt facilities, commercial paper facilities, credit agreements, indentures or other agreements, in each case with banks or other institutional lenders, purchasers, investors, trustees or agents that replace, refund or refinance any
part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity 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.
Designated Noncash Consideration
means the Fair Market Value of noncash consideration received by the
Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers Certificate, setting forth the general basis of such valuation, executed by a senior vice
president or the principal financial officer of the Issuer, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.
Designated Preferred Stock
means preferred shares of the Issuer (in each case other than Disqualified Stock) that is
issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate executed by a senior vice president or the principal financial officer of the Issuer on the
issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (c) of the first paragraph of the Certain CovenantsLimitation on Restricted Payments covenant.
Disqualified Stock
means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by
the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable, other than as a result of a change of control or asset sale, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date 91 days after the earlier of the maturity
date of the notes or the date the notes are no longer outstanding;
provided
,
however
, that if such Capital Stock is issued to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such
employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
EBITDA
means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period
plus
(without duplication)
(a) provision for taxes based on income or profits, plus franchise or similar taxes, of
such Person for such period deducted in computing Consolidated Net Income,
plus
(b) Consolidated Interest Expense
(and other components of Fixed Charges to the extent changes in GAAP after the Issue Date result in such components reducing Consolidated Net Income) of such Person for such period to the extent the same was deducted in calculating such Consolidated
Net Income,
plus
(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the
extent such depreciation and amortization were deducted in computing Consolidated Net Income,
plus
(d) any expenses
or charges related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or Indebtedness permitted to be incurred by the Indenture (whether or not successful), including such fees, expenses or charges related to
the offering of the notes and the Credit Facilities, and deducted in computing Consolidated Net Income,
plus
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(e) the amount of any restructuring charges, integration costs or other business
optimization expenses or costs deducted in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date,
plus
(f) any other non-cash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an
accrual or reserve for a cash expenditure for a future period,
plus
(g) the amount of any non-controlling interest
expense deducted in calculating Consolidated Net Income (less the amount of any cash dividends paid to the holders of such minority interests),
plus
(h) any net loss (or minus any gain) resulting from currency exchange risk Hedging Obligations,
plus
(i) foreign exchange loss (or minus any gain) on debt,
plus
(j) expenses related to the implementation of an enterprise resource planning system,
less
(k) non-cash items increasing Consolidated Net Income of such Person for such period, excluding any items which represent the
reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period.
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.
Equity Offering
means any public or private sale of common shares or preferred shares of the Issuer (excluding
Disqualified Stock), other than
(a) public offerings with respect to the Issuers common stock registered on Form
S-8;
(b) any such public or private sale that constitutes an Excluded Contribution; and
(c) any sales to the Issuer or any of its Subsidiaries.
euro
means the single currency of participating member states of the EMU.
Exchange Act
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
Excluded Contribution
means net cash proceeds, marketable securities or Qualified
Proceeds received by the Issuer from
(a) contributions to its common equity capital, and
(b) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement of the Issuer) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,
in each case designated as Excluded Contributions pursuant to an officers certificate executed by a senior vice president or the
principal financial officer of the Issuer on or prior to the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (c) of the first
paragraph under Certain CovenantsLimitation on Restricted Payments.
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Excluded Restricted Subsidiary
means any Restricted Subsidiary that has
total assets having a Fair Market Value in an amount not to exceed $100,000 on an individual basis and $1,000,000 in the aggregate for all such Restricted Subsidiaries that are Excluded Restricted Subsidiaries.
Existing Indebtedness
means Indebtedness of the Issuer or the Restricted Subsidiaries in existence on the Issue
Date, plus interest accruing thereon.
Fair Market Value
means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the chief executive officer, chief financial officer, chief accounting officer or controller of the Issuer or the
Restricted Subsidiary, which determination will be conclusive (unless otherwise provided in the indenture).
Fitch
means Fitch, Inc.
Fixed Charge Coverage Ratio
means, with respect to any Person for any period, the ratio of EBITDA of such Person for
such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than reductions in amounts outstanding
under revolving facilities unless accompanied by a corresponding termination of commitment) or issues or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the
Calculation Date
), then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect to such
incurrence, assumption, guarantee or redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or preferred stock, as if the same had occurred at the beginning of the applicable four-quarter
period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, amalgamations, mergers,
consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Issuer or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or
simultaneously with the Calculation Date shall be calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, amalgamations, mergers, consolidations and disposed operations (and the change in any associated
fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was
amalgamated or merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, amalgamation, merger, consolidation or disposed operation that would have
required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such Investment, acquisition, disposition, amalgamation, merger, consolidation or
disposed operation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever
pro
forma
effect is to be given to a transaction, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer (including
pro forma
expense and cost reductions,
regardless of whether these cost savings could then be reflected in
pro
forma
financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related
thereto). If any Indebtedness bears a floating rate of interest and is being given
pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the
entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting
officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed
on a
pro forma
basis shall be computed based upon the average daily balance of such Indebtedness during the
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applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other
rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.
Fixed Charges
means, with respect to any Person for any period, the sum of
(a) Consolidated Interest Expense,
(b) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock (including any
Designated Preferred Stock) or any Refunding Capital Stock of such Person, and
(c) all cash dividend payments (excluding
items eliminated in consolidation) on any series of Disqualified Stock.
Foreign Subsidiary
means, with respect
to any Person, any Restricted Subsidiary of such Person that is (i) a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended (a CFC) or (ii) organized in or under
the laws of the United States, any state thereof or the District of Columbia and all of the material assets of such Restricted Subsidiary consist of stock in one or more CFCs.
GAAP
means generally accepted accounting principles in the United States which are in effect on April 4, 2012.
At any time after the Issue Date, the Issuer may elect to apply IFRS accounting principles in lieu of GAAP for purposes of calculations hereunder and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS
(except as otherwise provided in the indenture);
provided
that any calculation or determination in the Indenture that requires the application of GAAP for periods that include fiscal quarters ended prior to the Issuers election to apply
IFRS shall remain as previously calculated or determined in accordance with GAAP. The Issuer shall give notice of any such election made in accordance with this definition to the Trustee and the Holders of notes.
Government Securities
means securities that are
(a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(b) 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 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, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantor
means any Person that executes a Note Guarantee in accordance with the provisions of the Indenture and its
respective successors and assigns.
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Hedging Obligations
means, with respect to any Person, the obligations
of such Person under
(a) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate
or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(b) other agreements
or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Holder
means a holder of the notes.
Indebtedness
means, with respect to any Person,
(a) any indebtedness (including principal and premium) of such Person, whether or not contingent
(1) in respect of borrowed money,
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or,
without double counting, reimbursement agreements in respect thereof),
(3) representing the balance deferred and unpaid
of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and
(ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, or
(4) representing any Hedging Obligations,
if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP,
(b) to the extent
not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person, other than by endorsement of negotiable instruments for collection in the ordinary course
of business, and
(c) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset
owned by such Person, whether or not such Indebtedness is assumed by such Person;
provided
,
however
, that Contingent Obligations shall be
deemed not to constitute Indebtedness; and obligations under or in respect of Receivables Facilities shall not be deemed to constitute Indebtedness; and the term Indebtedness shall not include any lease, concession or license of property
(or guarantee thereof) that would be considered an operating lease under GAAP as in effect on the Issue Date.
Independent
Financial Advisor
means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Issuer, qualified to perform
the task for which it has been engaged.
Investment Grade Rating
means a rating equal to or higher than
(i) Baa3 (or the equivalent) by Moodys, (ii) BBB- (or the equivalent) by S&P and (iii) BBB- (or the equivalent) by Fitch, or an equivalent rating by any other Rating Agency substituted for Moodys, S&P or Fitch.
Investments
means, with respect to any Person, all investments by such Person in other Persons (including
Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel, moving and similar advances to officers, directors and employees),
purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be
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classified on the balance sheet (excluding the footnotes) of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the
transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and the covenant described under Certain CovenantsLimitation on Restricted Payments,
(1) Investments shall include the portion (proportionate to the Issuers equity interest in such Subsidiary)
of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided
,
however
, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Issuer shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Issuers Investment in such Subsidiary at the time of such redesignation
less
(y) the portion (proportionate to the Issuers equity interest in such Subsidiary) of the Fair Market Value of the net
assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors or senior management of the Issuer.
Issue Date
means March 24, 2016.
Lien
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest 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.
Management Group
means at any time, the Chairman of the Board, any President, any Executive
Vice President or Vice President, any Managing Director, any Treasurer and any Secretary or other executive officer of the Issuer or any Subsidiary of the Issuer at such time.
Moodys
means Moodys Investors Service, Inc.
Net Income
means, with respect to any Person, the net income (loss) of such Person, determined in accordance with
GAAP and before any reduction in respect of preferred stock dividends.
Net Proceeds
means the aggregate cash
proceeds received by the Issuer or any Restricted Subsidiary in respect of any Asset Sale, including, without limitation, any cash received upon the sale or other disposition of any Designated Noncash Consideration received in any Asset Sale, net of
the direct costs relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal,
premium, if any, and interest on Indebtedness secured by a Lien permitted under the Indenture required (other than required by clause (1) of the second paragraph of Repurchase at the Option of HoldersAsset Sales) to
be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the
Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with
such transaction.
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Obligations
means any principal, 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, without limitation, reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities, and guarantees of payment
of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.
Officer
means the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Executive Vice
President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer.
Officers
Certificate
means a certificate signed on behalf of the Issuer by two Officers of the Issuer, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of
the Issuer that meets the requirements set forth in the Indenture.
Permitted Asset Swap
means the substantially
concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Issuer or any of its Restricted Subsidiaries and another Person;
provided
that any cash
or Cash Equivalents received must be applied in accordance with the provisions of Repurchase at the Option of HoldersAsset Sales.
Permitted Holders
means the collective reference to Marubeni Corporation, its Affiliates and the Management Group.
Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates,
constitute an additional Permitted Holder.
Permitted Investments
means
(a) any Investment in the Issuer or any Restricted Subsidiary;
(b) any Investment in cash and Cash Equivalents;
(c) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person if as a result of such Investment:
(1) such Person becomes a Restricted Subsidiary; or
(2) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;
(d) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an
Asset Sale made pursuant to the provisions of Repurchase at the Option of Holders Asset Sales or any other disposition of assets not constituting an Asset Sale;
(e) any Investment existing on the Issue Date;
(f) advances to employees not in excess of $5.0 million outstanding at any one time, in the aggregate;
(g) any Investment acquired by the Issuer or any Restricted Subsidiary:
(1) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Issuer of such other Investment or accounts receivable; or
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(2) as a result of a foreclosure by the Issuer or any Restricted Subsidiary with
respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(h) any
Investments in Hedging Obligations entered into in the ordinary course of business;
(i) loans to officers, directors and
employees for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business;
(j) any Investment having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this
clause (j) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash and/or marketable securities), not to exceed the greater of
(x) $350.0 million and (y) 5.0% of Total Assets at the time of such Investment;
provided
, that the dollar amount of Investments made pursuant to this clause (j) may be reduced by the Fair Market Value of the proceeds received
by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent
changes in value and, for the avoidance of doubt, any return of capital with respect to an Investment reduces the Fair Market Value of such Investment then outstanding for the purpose of this clause (j) by the amount of such return of capital);
(k) Investments the payment for which consists of Equity Interests of the Issuer (exclusive of Disqualified Stock);
provided
,
however
, that such Equity Interests will not increase the amount available for Restricted Payments under clause (c) of the first paragraph under the covenant described in Certain CovenantsLimitation on
Restricted Payments;
(l) guarantees of Indebtedness permitted under the covenant described in Certain
CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(m)
any transaction to the extent it constitutes an investment that is permitted and made in accordance with the provisions of the second paragraph of the covenant described under Certain CovenantsTransactions with Affiliates;
(n) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or
contribution of intellectual property pursuant to joint marketing or similar arrangements;
(o) repurchases of the notes or
other Indebtedness of the Issuer (other than Subordinated Indebtedness that is not Intercompany Subordinated Indebtedness);
(p) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were
incurred in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or
(B) litigation, arbitration or other disputes with Persons who are not Affiliates;
(q) any Investment in a Person
(other than the Issuer or a Restricted Subsidiary) pursuant to the terms of any agreements in effect on the Issue Date and any Investment that replaces, refinances or refunds an existing Investment;
provided
that the new Investment is in an
amount that does not exceed the amount replaced, refinanced or refunded (after giving effect to write-downs or write-offs with respect to such Investment), and is made in the same Person as the Investment replaced, refinanced or refunded;
(r) endorsements for collection or deposit in the ordinary course of business;
(s) Investments relating to any special purpose wholly-owned subsidiary of the Issuer organized in connection with a
Receivables Facility that, in the good faith determination of the Board of Directors of the Issuer, are necessary or advisable to effect such Receivables Facility;
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(t) Investments in a joint venture, when taken together with all other
Investments made pursuant to this clause (t) that are at the time outstanding, not to exceed the greater of (x) $200.0 million and (y) 3.0% of Total Assets (with the Fair Market Value of each Investment being measured at the time made
and without giving effect to subsequent changes in value); and
(u) Investments in aviation assets, including debt
Investments secured, directly or indirectly, by commercial jet aircraft or related property and including Investments in entities owning, financing or leasing aviation assets.
Permitted Jurisdiction
means any of the United States, any state thereof, the District of Columbia, or any territory
thereof, Bermuda, the Cayman Islands, Switzerland, Ireland, Singapore, or the Marshall Islands.
Permitted Liens
means, with respect to any Person:
(1) pledges or deposits by such Person under workmens compensation laws,
unemployment insurance laws or similar legislation, 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 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, in each case incurred
in the ordinary course of business;
(2) Liens imposed by law, such as carriers, warehousemens 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;
(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;
(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or
letters of 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 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 as
determined by the Board of Directors or management of the Issuer;
(6) Liens existing on the Issue Date;
(7) 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;
provided
,
further
,
however
, that such Liens may not extend to any other property
owned by the Issuer or any Restricted Subsidiary;
(8) Liens on property at the time the Issuer or a Restricted Subsidiary
acquired the property, including any acquisition by means of an amalgamation or a merger or consolidation with or into the Issuer or any Restricted Subsidiary;
provided
,
however
, that such Liens are not created or incurred in
connection with, or in contemplation of, such acquisition;
provided
,
further
,
however
, that the Liens may not extend to any other property owned by the issuer or any Restricted Subsidiary;
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(9) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Issuer or another Restricted Subsidiary permitted to be incurred in accordance with the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock;
(10) Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to
be under the Indenture, secured by a Lien;
(11) Liens on specific items of inventory of other goods and proceeds of any
Person securing such Persons obligations in respect of bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(12) leases and subleases of real property granted to others in the ordinary course of business and which do not materially
interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries as determined by the Board of Directors or management of the Issuer;
(13) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the
Issuer and its Restricted Subsidiaries in the ordinary course of business;
(14) Liens in favor of the Issuer;
(15) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the
Issuers client at which such equipment is located;
(16) Liens on accounts receivable and related assets incurred in
connection with a Receivables Facility;
(17) 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 clauses (6), (7), (8), (9), (10), (14), (26) and (27);
provided
,
however
,
that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater
than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (14), (26) and (27) at the time the original Lien became a Permitted Lien
under the Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement and (z) the new Lien has no greater priority and the holders of
the Indebtedness secured by such Lien have no greater intercreditor rights relative to the notes and Holders thereof than the original Liens and the related Indebtedness;
(18) other Liens either (a) securing obligations which obligations do not exceed the greater of $200.0 million or 3.0% of
Total Assets, or (b) during a Suspension Period, securing obligations which obligations do not exceed 20.0% of Consolidated Tangible Assets at the time of incurrence and after giving effect to the incurrence of such obligations and the use of
proceeds thereof, in each case in aggregate principal amount together with all other outstanding obligations secured by Liens incurred pursuant to this clause (18) subsequent to the Issue Date, including the Lien proposed to be incurred;
(19) Licenses or sublicenses in the ordinary course of business;
(20) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under the
caption Events of Default and Remedies 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;
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(21) 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;
(22)
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 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;
(23) 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;
(24) 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;
(25) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of
goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;
(26) Liens securing
Indebtedness permitted to be incurred pursuant to clause (d) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
provided
that
Liens extend only to the assets so financed, purchased, constructed or improved; and
(27) Liens securing Indebtedness
permitted to be incurred pursuant to clause (q) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
provided
that Liens extend
only to the assets so financed (and any improvements or accessions thereto) and any Capital Stock of any related Aircraft Finance Subsidiary.
For purposes of determining compliance with this definition, (A) Permitted Liens need not be incurred solely by reference to one category
of Permitted Liens described above but are permitted to be incurred in part under any combination thereof and (B) in the event that a Lien (or any portion thereof) meets the criteria of one or more of the categories of Permitted Liens described
above, the Issuer may, in its sole discretion, classify or reclassify such item of Permitted Liens (or any portion thereof) in any manner that complies with this definition and the Issuer may divide and classify a Lien in more than one of the types
of Permitted Liens in one of the above clauses.
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.
preferred stock
means any Equity Interest with preferential rights of payment of dividends or upon liquidation,
dissolution, or winding up.
Qualified Proceeds
means assets that are used or useful in, or Capital Stock of any
Person engaged in, a Similar Business;
provided
that the fair market value of any such assets or Capital Stock shall be determined by the Board of Directors or senior management of the Issuer in good faith.
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Rating Agencies
means Fitch, Moodys and S&P or if any of
Fitch, Moodys or S&P or all three 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 Fitch,
Moodys or S&P or all three, as the case may be.
Rating Decline
shall be deemed to occur if on the
60th day following the occurrence of a Change of Control (1) if notes are then rated by three Rating Agencies, the rating of the notes by two or more of the Rating Agencies shall have been (i) withdrawn or (ii) downgraded to a rating
below an Investment Grade Rating, or (2) if the notes are then rated by two or fewer Rating Agencies, the rating of the notes by either Rating Agency shall have been (i) withdrawn or (ii) downgraded to a rating below an Investment
Grade Rating.
Receivables Facility
means one or more receivables financing facilities, as amended from time to
time, the Indebtedness of which is non-recourse (except for standard representations, warranties, covenants and indemnities made in connection with such facilities) to the Issuer and the Restricted Subsidiaries pursuant to which the Issuer and/or
any of its Restricted Subsidiaries sells its accounts receivable to a Person that is not a Restricted Subsidiary.
Receivables
Fees
means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection
with, any Receivables Facility.
Related Business Assets
means assets (other than cash or Cash Equivalents) used
or useful in a Similar Business;
provided
that any assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they
consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.
Restricted Investment
means an Investment other than a Permitted Investment.
Restricted Subsidiary
means, at any time, any direct or 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 and Poors Ratings Group.
Securities Act
means the Securities Act of 1933 and the rules and regulations of the Commission promulgated
thereunder.
Significant Subsidiary
means any Restricted Subsidiary that would be a significant
subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
Similar Business
means any business conducted or proposed to be conducted by the Issuer and its Restricted
Subsidiaries on the date of the Indenture or any business that is similar, reasonably related, incidental or ancillary thereto.
Subordinated Indebtedness
means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its
terms subordinated in right of payment to the notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to the Note Guarantee of such Guarantor.
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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.
Total Assets
means the total assets of the Issuer and the Restricted
Subsidiaries, as shown on the most recent balance sheet of the Issuer for which internal financial statements are available immediately preceding the date on which any calculation of Total Assets is being made, with such
pro forma
adjustments
for transactions consummated on or prior to or simultaneously with the date of the calculation as are appropriate and consistent with the
pro forma
adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.
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 the maturity date of the notes to be redeemed;
provided
,
however
, that if
the period from the redemption date to the maturity date of the notes to be redeemed is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
Unrestricted Subsidiary
means
(1) any Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the board
of directors of the Issuer, as provided below); and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of 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 any Subsidiary of the Subsidiary to be so designated);
provided
that
(a) any Unrestricted Subsidiary
must be an entity of which shares of the Capital Stock or other Equity Interests (including partnership interests) entitled to cast at least a majority of the votes that may be cast by all shares or Equity Interests having ordinary voting power for
the election of directors or other governing body are owned, directly or indirectly, by the Issuer,
(b) such designation
complies with the covenants described under Certain CovenantsLimitation on Restricted Payments and
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(c) each of
(1) the Subsidiary to be so designated and
(2) its Subsidiaries 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.
The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided
that,
immediately after giving effect to such designation no Default or Event of Default shall have occurred and be continuing and either
(1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described
in the first sentence under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock or
(2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be not less than such ratio for the
Issuer and its Restricted Subsidiaries immediately prior to such designation, in each case on a
pro forma
basis taking into account such designation.
Any such designation by the Board of Directors of the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the
Trustee a copy of the board resolution giving effect to such designation and an Officers 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.
Weighted Average Life to Maturity
means, when
applied to any Indebtedness, Disqualified Stock or preferred stock, as the case may be, at any date, the quotient obtained by dividing
(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or preferred stock multiplied by the amount of such payment, by
(2) the sum of all such payments.
Wholly-Owned Restricted Subsidiary
means any Wholly-Owned Subsidiary that is a Restricted Subsidiary.
Wholly-Owned Subsidiary
of any Person means a Subsidiary of such Person, 100% of the outstanding Capital Stock or
other ownership interests of which (other than directors qualifying shares) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.
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BOOK-ENTRY SETTLEMENT AND CLEARANCE
Except as set forth below, all of the notes will be issued in registered, global form without interest coupons in minimum denominations of
$2,000 and integral multiples of $1,000 in excess thereof (the Global Notes). Notes will be issued at the closing of this offering only against payment in immediately available funds.
Global Notes will be deposited upon issuance with the Trustee as custodian for DTC in Minneapolis, Minnesota, and registered in the name of
DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.
Except as set
forth below, Global Notes may be transferred only to another nominee of DTC or to a successor of DTC or its nominee, in whole and not in part. Except in the limited circumstances described below, beneficial interests in Global Notes may not be
exchanged for notes in certificated form and owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of notes in certificated form. See Exchange of Global Notes for Certificated Notes.
Transfers of beneficial interests in Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect
participants (including the Euroclear System (Euroclear) and Clearstream Banking, S.A. (Clearstream) (as indirect participants in DTC)), which may change from time to time.
Depository Procedures
The following
description of the operations and procedures of DTC, Euroclear and Clearstream is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to
changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company organized under the laws of the State of New York, a banking
organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the Uniform Commercial Code and a clearing agency registered pursuant to
the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, the Participants) and to facilitate the clearance and settlement of transactions in those
securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain
other organizations. Access to DTCs system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly
(collectively, the Indirect Participants). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers
of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised us that, pursuant to procedures established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the underwriters with portions
of the principal amount of the Global Notes; and
(2) ownership of these interests in Global Notes will be shown on,
and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests
in Global Notes).
Investors in Global Notes who are Participants in DTCs system may hold their interests therein directly through
DTC. Investors in Global Notes who are not Participants may hold their interests therein
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indirectly through organizations (including Euroclear and Clearstream) that are Participants in DTC. All interests in a Global Note may be subject to the procedures and requirements of DTC.
Euroclear and Clearstream will hold interests in Global Notes on behalf of their participants through customers securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./N.V., as
operator of Euroclear, and Citibank, N.A., as operator of Clearstream which in turn hold such interests in customers securities accounts in the depositaries names on the books of DTC. Interests in a Global Note held through Euroclear or
Clearstream may be subject to the procedures and requirements of those systems (as well as to the procedures and requirements of DTC). The laws of some states require that certain persons take physical delivery in definitive form of securities that
they own and the ability to transfer beneficial interests in a Global Note to Persons that are subject to those requirements will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect
Participants, the ability of a person having beneficial interests in a Global Note to pledge those interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of those interests, may be affected by the lack
of a physical certificate evidencing those interests.
Except as described below, owners of an interest in Global Notes will not have
notes registered in their names, will not receive physical delivery of definitive notes in registered certificated form (Certificated Notes) and will not be considered the registered owners or Holders thereof under the
indenture governing the notes for any purpose.
Payments in respect of the principal of and premium, if any, and interest on a Global Note
registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the indenture governing the notes. Under the terms of the indenture governing the notes, the Issuer and the Trustee will treat the
Persons in whose names notes, including Global Notes, are registered as the owners of such notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Issuer, the Trustee nor any agent of the Issuer or the
Trustee has or will have any responsibility or liability for:
(1) any aspect of DTCs records or any
Participants or Indirect Participants records relating to or payments made on account of beneficial ownership interests in Global Notes or for maintaining, supervising or reviewing any of DTCs records or any Participants or
Indirect Participants records relating to the beneficial ownership interests in Global Notes; or
(2) any other
matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC has advised us that its
current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe
it will not receive payment on that payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments
by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the
responsibility of DTC, the Trustee or the Issuer. Neither the Issuer nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of any notes, and the Issuer and the Trustee may conclusively
rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC
will be effected in accordance with DTCs procedures, and will be settled in same-day funds and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
Cross-market transfers between the Participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTCs rules on behalf of
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Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case
may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note from DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised us that it will take any action permitted to be taken by a holder of the notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global Notes and only in respect of the portion of the aggregate principal amount of the notes as to which that Participant or those Participants has or have given the relevant
direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute those notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers of interests in Global Notes
among Participants, they are under no obligation to perform those procedures, and may discontinue or change those procedures at any time. Neither the Issuer nor the Trustee nor any of their respective agents will have any responsibility for the
performance by DTC, Euroclear, Clearstream or their respective Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for a Certificated Note if:
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DTC (a) notifies us that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in each case, a successor
depositary is not appointed;
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we, at our option, notify the Trustee in writing that we elect to cause the issuance of Certificated Notes; or
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there has occurred and is continuing a Default with respect to the notes.
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In addition,
beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the indenture governing the notes. In all cases, Certificated Notes delivered in
exchange for any Global Note or beneficial interests in a Global Note will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Same Day Settlement and Payment
We will
make payments in respect of notes represented by Global Notes, including payments of principal, premium, if any, and interest by wire transfer of immediately available funds to the accounts specified by the DTC or its nominee. We will make all
payments of principal of and premium, if any, and interest on Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders of the Certificated Notes or, if no account is specified, by mailing a check to
each Holders registered address. See Description of the NotesPrincipal, Maturity and Interest. Notes represented by Global Notes are expected to be eligible to trade in DTCs Same-Day Funds Settlement System, and any
permitted secondary market trading activity in notes represented by Global Notes will, therefore, be required by DTC to be settled in immediately
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available funds. Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant will be credited,
and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of
DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant will be received with value on the settlement date of DTC
but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTCs settlement date.
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CERTAIN BERMUDA TAX CONSIDERATIONS
We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the
event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not, until
March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned
or leased by us in Bermuda. The execution, delivery, performance or enforcement of the transactions and related documents contemplated hereby are not subject to ad valorem stamp duty in Bermuda and no registration, documentary, recording, transfer
or other similar tax, fee or charge is payable in Bermuda in connection with the execution, delivery, filing, registration or performance of the documents. There is no income or other tax of Bermuda imposed by withholding or otherwise on any payment
to be made to or by ourselves pursuant to the transactions contemplated hereby.
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