If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the
following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following
box. ☒
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D.
filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting
company and emerging growth company in
Rule 12b-2
of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financing accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the material terms and provisions of our capital stock. You should refer to the applicable provisions of our
restated certificate of incorporation, as amended, or Certificate of Incorporation, our amended and restated bylaws, as amended, or Bylaws, and the documents that we have incorporated by reference for a complete statement of the terms and rights of
our capital stock.
As of May 15, 2018, our authorized capital stock was 485,000,000 shares, which included 480,000,000 shares
authorized as common stock, $0.003 par value, and 5,000,000 shares authorized as preferred stock, $0.0001 par value. As of May 15, 2018, we had 248,115,412 shares of common stock outstanding. There were no shares of preferred stock outstanding
as of such date.
Common Stock
Listing
. Our common stock is listed on the NYSE American under the symbol LNG.
Dividends
. Subject to the rights of holders of preferred stock, common stockholders may receive dividends when declared by the board of
directors. Dividends may be paid in cash, stock or another form.
Fully Paid
. All outstanding shares of common stock are, and the
common stock offered by this prospectus and any prospectus supplement will be, fully paid and
non-assessable
upon issuance.
Voting Rights
. Common stockholders are entitled to one vote in the election of directors and other matters for each share of common
stock owned. Common stockholders are not entitled to preemptive or cumulative voting rights.
Other Rights
. We will notify common
stockholders of any stockholders meetings in accordance with applicable law. If we liquidate, dissolve or
wind-up
our business, either voluntarily or not, common stockholders will share equally in the
assets remaining after we pay our creditors and preferred stockholders. There are no redemption or sinking fund provisions applicable to the common stock.
Transfer Agent and Registrar
. Our transfer agent and registrar is Computershare Trust Company, N.A. located in Providence, Rhode
Island.
Preferred Stock
Our board
of directors can, without approval of our stockholders, issue one or more series or classes of preferred stock from time to time limited by the number of shares of preferred stock then authorized. The board can also determine the number of shares of
each series and the rights, preferences and limitations of each series or class, including the dividend rights, voting rights, conversion rights, redemption rights and any liquidation preferences of any series or class of preferred stock and the
terms and conditions of issue.
If we offer shares of preferred stock, the specific terms will be described in a prospectus supplement,
including:
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the specific designation, number of shares, seniority and purchase price;
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any liquidation preference per share;
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any redemption, repayment or sinking fund provisions;
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any dividend rate or rates and the dates on which any such dividends will be payable (or the method by which such rates or dates will be determined);
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if other than the currency of the United States, the currency or currencies, including composite currencies, in which such preferred stock is denominated and in which payments will or may be payable;
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the method by which amounts in respect of such preferred stock may be calculated and any commodities, currencies or indices, or value, rate or price, relevant to such calculation;
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whether such preferred stock is convertible or exchangeable and, if so, the securities or rights into which such preferred stock is convertible or exchangeable, and the terms and conditions upon which such conversions
or exchanges will be effected, including conversion or exchange prices or rates, the conversion or exchange period and any other related provisions;
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the place or places where dividends and other payments on the preferred stock will be payable; and
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any additional voting, dividend, liquidation, redemption and other rights, preferences, privileges, limitations and restrictions.
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All shares of preferred stock offered will, when issued, be fully paid and
non-assessable.
The transfer agent, registrar, and dividend disbursement agent for a series of preferred stock will be named in a prospectus supplement. The
registrar for shares of preferred stock will send notices to stockholders of any meetings at which holders of the preferred stock have the right to elect directors or to vote on any other matter.
In some cases, the issuance of preferred stock could delay a change in control of us and make it more difficult to remove present management.
Under certain circumstances, preferred stock could also restrict dividend payments to common stockholders.
Certain Provisions of Our Certificate of
Incorporation, Bylaws and Law
Our Certificate of Incorporation and Bylaws contain provisions that may render more difficult possible
takeover proposals to acquire control of us and make removal of our management more difficult. Below is a description of certain of these provisions in our Certificate of Incorporation and Bylaws.
Our Certificate of Incorporation, authorizes a class of undesignated preferred stock consisting of 5,000,000 shares. Additional shares of
preferred stock may be issued from time to time in one or more series, and our board of directors, without further approval of the stockholders, is authorized to fix the designations, powers, preferences, and rights applicable to each series of
preferred stock. The purpose of authorizing the board of directors to determine such designations, powers, preferences, and rights is to allow such determinations to be made by the board of directors instead of the stockholders and to avoid the
expense of, and eliminate delays associated with, a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of common stock and, under some circumstances, make it more difficult for a third party to gain control of us.
Our Certificate of Incorporation provides that any action required or permitted to be taken by our common stockholders must be taken at an
annual or special meeting of stockholders and not by written consent.
Our Bylaws permit holders of record of at least 50.1% of the
outstanding shares of our common stock to call a special meeting of stockholders if such holders comply with the requirements set forth in our Bylaws.
Our Bylaws contain specific procedures for stockholder nomination of directors. These provisions require advance notification that must be
given in accordance with the provisions of our Bylaws. The procedure for stockholder nomination of directors may have the effect of precluding a nomination for the election of directors at a particular meeting if the required procedure is not
followed.
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Our Certificate of Incorporation requires the vote of at least 66 2/3% of all of the shares of
our capital stock which are entitled to vote, voting together as a single class, to take stockholder action to alter, amend, rescind or repeal any of our Bylaws, or to alter, amend, rescind or repeal provisions of our Certificate of Incorporation or
to adopt any provision inconsistent therewith relating to the inability of stockholders to act by written consent, the ability of our board of directors to adopt, alter, amend and repeal our Bylaws and the supermajority voting provision. The
supermajority voting provisions may discourage or deter a person from attempting to obtain control of us by making it more difficult to amend some provisions of our Certificate of Incorporation or for our stockholders to amend any
provision of our Bylaws, whether to eliminate provisions that have an anti-takeover effect or those that protect the interests of minority stockholders.
Although Section 214 of the General Corporation Law of the State of Delaware, or the DGCL provides that a corporations certificate
of incorporation may provide for cumulative voting for directors, our Certificate of Incorporation does not provide for cumulative voting. As a result, in a
non-contested
election of directors, directors are
elected by a vote of the majority of the votes cast with respect to that directors election; in a contested election of directors, directors are elected by a vote of the plurality of the votes cast.
As a Delaware corporation, we are subject to Section 203, or the business combination statute, of the DGCL. Under the business
combination statute of the DGCL, a corporation is generally restricted from engaging in a business combination (as defined in Section 203 of the DGCL) with an interested stockholder (defined generally as a person owning 15% or more of the
corporations outstanding voting stock) for a three-year period following the time the stockholder became an interested stockholder. This restriction applies unless:
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prior to the time the stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an
interested stockholder;
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the interested stockholder owned at least 85% of the voting stock of the corporation upon completion of the transaction which resulted in the stockholder becoming an interested stockholder (excluding stock held by the
corporations directors who are also officers and by the corporations employee stock plans, if any, that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer); or
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at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors of the corporation and authorized by the affirmative vote, at an annual or
special meeting, and not by written consent, of at least 66 2/3% of the outstanding voting shares of the corporation, excluding shares held by that interested stockholder.
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The provisions of the business combination statute of the DGCL do not apply to a corporation if, subject to certain requirements specified in
Section 203(b) of the DGCL, the certificate of incorporation or bylaws of the corporation contain a provision expressly electing not to be governed by the provisions of the statute or the corporation does not have voting stock listed on a
national securities exchange or held of record by more than 2,000 stockholders. We have not adopted any provision in our Certificate of Incorporation or Bylaws electing not to be governed by the business combination statute of the DGCL. As a result,
the statute is applicable to business combinations involving us.
Liability and Indemnification of Officers and Directors
Our Certificate of Incorporation provides that directors and officers shall be indemnified against liabilities arising from their service as
directors or officers to the fullest extent permitted by law, which generally requires that the individual act in good faith and in a manner he or she reasonably believes to be in or not opposed to our best interests. Our Bylaws also provide for
mandatory indemnification and advancement of expenses for directors and officers, to the fullest extent permitted by applicable law.
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We have also entered into indemnification agreements with certain of our directors and officers.
The indemnification agreements provide that we will indemnify these officers and directors to the fullest extent permitted by our Certificate of Incorporation, Bylaws and applicable law. The indemnification agreements also provide that these
officers and directors shall be entitled to the advancement of fees as permitted by applicable law and sets out the procedures required under the agreements for determining entitlement to and obtaining indemnification and expense advancement.
We also have director and officer liability insurance for the benefit of each of our directors and officers. These policies include coverage
for losses for wrongful acts and omissions. Each of the indemnitees are named as an insured under such policies and provided with the same rights and benefits as are accorded to the most favorably insured of our directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
DESCRIPTION OF DEBT SECURITIES
Any debt securities that we offer under a prospectus supplement will be direct, unsecured general obligations. The debt securities will be
either senior debt securities or subordinated debt securities. The debt securities will be issued under one or more separate indentures between us and The Bank of New York Mellon, as trustee. Senior debt securities will be issued under a senior
indenture and subordinated debt securities will be issued under a subordinated indenture. Together, the senior indenture and the subordinated indenture are called indentures. The indentures will be supplemented by supplemental
indentures, the material provisions of which will be described in a prospectus supplement.
As used in this description, the words
we, us and our refer to Cheniere Energy, Inc., and not to any of our subsidiaries or affiliates.
We
have summarized some of the material provisions of the indentures below. This summary does not restate those agreements in their entirety. The senior indenture and a form of subordinated indenture have been filed as exhibits to the registration
statement of which this prospectus is a part. We urge you to read each of the indentures because each one, and not this description, defines the rights of holders of debt securities.
Capitalized terms defined in the indentures have the same meanings when used in this prospectus.
General
The debt securities issued under
the indentures will be our direct, unsecured general obligations. The senior debt securities will rank equally with all of our other senior and unsubordinated debt. The subordinated debt securities will have a junior position to all of our senior
debt.
The following description sets forth the general terms and provisions that could apply to debt securities that we may offer to
sell. A prospectus supplement relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following, among others:
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the title and type of the debt securities;
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the total principal amount of the debt securities;
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the percentage of the principal amount at which the debt securities will be issued and any payments due if the maturity of the debt securities is accelerated;
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the dates on which the principal of the debt securities will be payable;
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the interest rate which the debt securities will bear and the interest payment dates for the debt securities;
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any conversion or exchange features;
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any optional redemption periods;
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any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem some or all of the debt securities;
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any provisions granting special rights to holders when a specified event occurs;
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any changes to or additional events of default or covenants;
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any special tax implications of the debt securities, including provisions for original issue discount securities, if offered; and
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any other terms of the debt securities.
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The senior indenture does not, and the subordinated
indenture will not, limit the amount of debt securities that may be issued. The senior indenture allows, and the subordinated indenture will allow, debt securities to be issued up to the principal amount that may be authorized by us and may be in
any currency or currency unit designated by us.
Debt securities of a series may be issued in registered or global form.
Covenants
Under the indentures, we:
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will pay the principal of, and interest and any premium on, the debt securities when due;
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will maintain a place of payment;
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will deliver a certificate to the trustee each fiscal year reviewing our compliance with our obligations under the indentures;
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will preserve our corporate existence; and
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will segregate or deposit with any paying agent sufficient funds for the payment of any principal, interest or premium on or before the due date of such payment.
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Mergers and Sale of Assets
The senior
indenture provides, and the subordinated indenture will provide, that we may not consolidate with or merge into any other Person (as defined below) or sell, convey, transfer or lease all or substantially all of our properties and assets (on a
consolidated basis) to another Person, unless:
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either: (a) we are the surviving Person; or (b) the Person formed by or surviving any such consolidation, amalgamation or merger or resulting from such conversion (if other than us) or to which such sale,
assignment, transfer, conveyance or other disposition has been made is a corporation, limited liability company or limited partnership organized or existing under the laws of the United States, any State thereof or the District of Columbia;
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the Person formed by or surviving any such conversion, consolidation, amalgamation or merger (if other than us) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made
assumes all of our obligations under such indenture and the debt securities governed thereby pursuant to agreements reasonably satisfactory to the trustee, which may include a supplemental indenture;
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we or the successor will not immediately be in default under such indenture; and
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we deliver an officers certificate and opinion of counsel to the trustee stating that such consolidation, amalgamation, merger, conveyance, sale, transfer or lease and any supplemental indenture comply with
Article Eight of the indenture and that all conditions precedent set forth in such indenture relating to such transaction have been complied with.
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Upon the assumption of our obligations under each indenture by a successor, we will be discharged from all obligations under such indenture,
except in the case of a lease.
As used in the indenture and in this description, the word Person means any individual,
corporation, company, limited liability company, partnership, limited partnership, joint venture, association, joint-stock company, trust, other entity, unincorporated organization or government or any agency or political subdivision thereof.
Events of Default
Event of
default, when used in the indentures with respect to debt securities of any series, will mean any of the following:
(1) default in the payment of any interest upon any debt security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days;
(2) default in the payment of the principal of (or premium, if
any, on) any debt security of that series at its maturity;
(3) default in the performance, or breach, of any covenant set
forth in Article Ten of the applicable indenture (other than a covenant, a default in the performance of which or the breach of which is elsewhere specifically dealt with as an event of default or which has expressly been included in such indenture
solely for the benefit of one or more series of debt securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to us by the trustee or to
us and the trustee by the holders of at least 25% in principal amount of the then-outstanding debt securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a
Notice of Default thereunder;
(4) default in the performance, or breach, of any covenant in the applicable
indenture (other than a covenant set forth in Article Ten of such indenture or any other covenant, a default in the performance of which or the breach of which is elsewhere specifically dealt with as an event of default or which has expressly been
included in such indenture solely for the benefit of one or more series of debt securities other than that series), and continuance of such default or breach for a period of 180 days after there has been given, by registered or certified mail,
to us by the trustee or to us and the trustee by the holders of at least 25% in principal amount of the then-outstanding debt securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating
that such notice is a Notice of Default thereunder;
(5) we, pursuant to or within the meaning of any
bankruptcy law, (i) commence a voluntary case, (ii) consent to the entry of any order for relief against us in an involuntary case, (iii) consent to the appointment of a custodian of us or for all or substantially all of our property,
or (iv) make a general assignment for the benefit of our creditors;
(6) a court of competent jurisdiction enters an
order or decree under any bankruptcy law that (i) is for relief against us in an involuntary case, (ii) appoints a custodian of us or for all or substantially all of our property, or (iii) orders the liquidation of us, and the order
or decree remains unstayed and in effect for 60 consecutive days;
(7) default in the deposit of any sinking fund payment
when due; or
(8) any other event of default provided with respect to debt securities of that series in accordance with
provisions of the indenture related to the issuance of such debt securities.
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An event of default for a particular series of debt securities does not necessarily constitute an
event of default for any other series of debt securities issued under an indenture. The trustee may withhold notice to the holders of debt securities of any default (except in the payment of principal, interest or any premium) if it considers the
withholding of notice to be in the interests of the holders.
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of 25% in aggregate principal amount of the debt securities of the series may declare the entire principal of all of the debt securities of that series to be due and payable immediately. If this happens, subject
to certain conditions, the holders of a majority of the aggregate principal amount of the debt securities of that series can void the declaration.
Other than its duties in case of a default, a trustee is not obligated to exercise any of its rights or powers under any indenture at the
request, order or direction of any holders, unless the holders offer the trustee indemnity reasonably satisfactory to the trustee. If they provide this indemnification, and subject to the conditions set forth in the indenture, the holders of a
majority in principal amount outstanding of any series of debt securities may direct the time, method and place of conducting any proceeding or any remedy available to the trustee, or exercising any power conferred upon the trustee, for any series
of debt securities.
Amendments and Waivers
Subject to certain exceptions, the indentures, the debt securities issued thereunder or the subsidiary guarantees, if any, may be amended or
supplemented with the consent of the holders of a majority in aggregate principal amount of the then-outstanding debt securities of each series affected by such amendment or supplemental indenture, with each such series voting as a separate class
(including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, debt securities) and, subject to certain exceptions, any past default or compliance with any provisions may be waived with
respect to each series of debt securities with the consent of the holders of a majority in principal amount of the then-outstanding debt securities of such series voting as a separate class (including consents obtained in connection with a purchase
of, or tender offer or exchange offer for, debt securities).
Without the consent of each holder of the outstanding debt securities
affected, an amendment, supplement or waiver may not, among other things:
(1) change the stated maturity of the principal
of, or any installment of principal of or interest on, any debt security, reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, reduce the amount of the principal of an original issue
discount security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the applicable indenture, change the coin or currency in which any debt security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date therefor);
(2) reduce the percentage in principal amount of the then-outstanding debt securities of any series, the consent of the holders
of which is required for any such amendment or supplemental indenture, or the consent of the holders of which is required for any waiver of compliance with certain provisions of the applicable indenture or certain defaults thereunder and their
consequences provided for in the applicable indenture;
(3) modify any of the provisions set forth in (i) the
provisions of the applicable indenture related to the holders unconditional right to receive principal, premium, if any, and interest on the debt securities or (ii) the provisions of the applicable indenture related to the waiver of past
defaults under such indenture;
(4) waive a redemption payment with respect to any debt security; provided, however, that
any purchase or repurchase of debt securities shall not be deemed a redemption of the debt securities;
(5) release any
guarantor from any of its obligations under its guarantee or the applicable indenture, except in accordance with the terms of such indenture (as amended or supplemented); or
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(6) make any change in the foregoing amendment and waiver provisions, except to
increase any percentage provided for therein or to provide that certain other provisions of the applicable indenture cannot be modified or waived without the consent of the holder of each then-outstanding debt security affected thereby.
Notwithstanding the foregoing, without the consent of any holder of debt securities, we, the guarantors, if any, and the trustee may amend
each of the indentures or the debt securities issued thereunder to:
(1) cure any ambiguity or defect or to correct or
supplement any provision therein that may be inconsistent with any other provision therein;
(2) evidence the succession of
another Person to us and the assumption by any such successor of our covenants therein and, to the extent applicable, of the debt securities;
(3) provide for uncertificated debt securities in addition to or in place of certificated debt securities; provided that the
uncertificated debt securities are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code of 1986, as amended (the Code), or in the manner such that the uncertificated debt securities are described in
Section 163(f)(2)(B) of the Code;
(4) add a guarantee and cause any Person to become a guarantor, and/or to evidence
the succession of another Person to a guarantor and the assumption by any such successor of the guarantee of such guarantor therein and, to the extent applicable, endorsed upon any debt securities of any series;
(5) secure the debt securities of any series;
(6) add to our covenants such further covenants, restrictions, conditions or provisions as we shall consider to be appropriate
for the benefit of the holders of all or any series of debt securities (and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of debt securities, stating that such covenants are expressly
being included solely for the benefit of such series), to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default permitting the enforcement of
all or any of the several remedies provided in the applicable indenture as set forth therein, or to surrender any right or power therein conferred upon us; provided, that in respect of any such additional covenant, restriction, condition or
provision, such amendment or supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon
such an event of default or may limit the remedies available to the trustee upon such an event of default or may limit the right of the holders of a majority in aggregate principal amount of the debt securities of such series to waive such an event
of default;
(7) make any change to any provision of the applicable indenture that does not adversely affect the rights or
interests of any holder of debt securities issued thereunder;
(8) provide for the issuance of additional debt securities
in accordance with the provisions set forth in the applicable indenture on the date of such indenture;
(9) add any
additional defaults or events of default in respect of all or any series of debt securities;
(10) add to, change or
eliminate any of the provisions of the applicable indenture to such extent as shall be necessary to permit or facilitate the issuance of debt securities in bearer form, registrable or not registrable as to principal, and with or without interest
coupons;
(11) change or eliminate any of the provisions of the applicable indenture; provided that any such change or
elimination shall become effective only when there is no debt security outstanding of any series created prior to the execution of such amendment or supplemental indenture that is entitled to the benefit of such provision;
(12) establish the form or terms of debt securities of any series as permitted thereunder, including to reopen any series of
any debt securities as permitted thereunder;
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(13) evidence and provide for the acceptance of appointment thereunder by a
successor trustee with respect to the debt securities of one or more series and to add to or change any of the provisions of the applicable indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by
more than one trustee, pursuant to the requirements of such indenture;
(14) conform the text of the applicable indenture
(and/or any supplemental indenture) or any debt securities issued thereunder to any provision of a description of such debt securities appearing in a prospectus or prospectus supplement or an offering memorandum or offering circular to the extent
that such provision appears on its face to have been intended to be a verbatim recitation of a provision of such indenture (and/or any supplemental indenture) or any debt securities issued thereunder; or
(15) modify, eliminate or add to the provisions of the applicable indenture to such extent as shall be necessary to effect the
qualification of such indenture under the Trust Indenture Act of 1939, as amended (the Trust Indenture Act), or under any similar federal statute subsequently enacted, and to add to such indenture such other provisions as may be
expressly required under the Trust Indenture Act.
The consent of the holders is not necessary under either indenture to approve the
particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under an indenture becomes effective, we are required to mail to the holders of debt securities
thereunder a notice briefly describing such amendment. However, the failure to give such notice to all such holders, or any defect therein, will not impair or affect the validity of the amendment.
Legal Defeasance and Covenant Defeasance
The senior indenture provides, and the subordinated indenture will provide, that we may, at our option and at any time, elect to have all of
our obligations discharged with respect to the debt securities outstanding thereunder and all obligations of any guarantors of such debt securities discharged with respect to their guarantees (Legal Defeasance), except for:
(1) the rights of holders of outstanding debt securities to receive payments in respect of the principal of, or interest or
premium, if any, on, such debt securities when such payments are due from the trust referred to below;
(2) our obligations
with respect to the debt securities concerning temporary debt securities, registration of debt securities, mutilated, destroyed, lost or stolen debt securities, the maintenance of an office or agency for payment and money for security payments held
in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee and our and each guarantors
obligations in connection therewith; and
(4) the Legal Defeasance and Covenant Defeasance (as defined below) provisions of
the applicable indenture.
In addition, we may, at our option and at any time, elect to have our obligations released with respect to
certain provisions of each indenture, including certain provisions described in any prospectus supplement (such release and termination being referred to as Covenant Defeasance), and thereafter any failure to comply with such obligations
or provisions will not constitute a default or event of default. In addition, in the event Covenant Defeasance occurs in accordance with the applicable indenture, any defeasible event of default will no longer constitute an event of default.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) we must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the debt securities, cash in
U.S. dollars,
non-callable
government securities, or a combination of cash in U.S. dollars and
non-callable
U.S. government securities, in amounts as will
be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, and interest and premium, if any, on, the outstanding debt securities on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and we must specify whether the debt securities are being defeased to such stated date for payment or to a particular redemption date;
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(2) in the case of Legal Defeasance, we must deliver to the trustee an opinion of
counsel confirming that (a) we have received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the issue date of the debt securities, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the outstanding debt securities will not recognize income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, we must deliver to the trustee an opinion of counsel confirming that the holders of the
outstanding debt securities will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to 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 shall have
occurred and be continuing on the date of such deposit (other than a default or event of default resulting from the borrowing of funds to be applied to such deposit);
(5) the deposit must not result in a breach or violation of, or constitute a default under, any other instrument to which we or
any guarantor is a party or by which we or any guarantor is bound;
(6) such Legal Defeasance or Covenant Defeasance must
not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the applicable indenture) to which we are, or any of our subsidiaries is, a party or by which we are, or any of our subsidiaries
is, bound;
(7) we must deliver to the trustee an officers certificate stating that the deposit was not made by us
with the intent of preferring the holders of debt securities over our other creditors with the intent of defeating, hindering, delaying or defrauding our creditors or the creditors of others;
(8) we must deliver to the trustee an officers certificate stating that all conditions precedent set forth in
clauses (1) through (6) of this paragraph have been complied with; and
(9) we must deliver to the trustee an
opinion of counsel (which opinion of counsel may be subject to customary assumptions, qualifications, and exclusions) stating that all conditions precedent set forth in clauses (2), (3) and (6) of this paragraph have been complied with.
Satisfaction and Discharge
Each of
the indentures will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of debt securities and certain rights of the trustee, as expressly provided for in such indenture) as to
all outstanding debt securities and guarantees issued thereunder when:
(1) either (a) all of the debt securities
theretofore authenticated and delivered under such indenture (except lost, stolen or destroyed debt securities that have been replaced or paid and debt securities for the payment of which money has theretofore been deposited in trust or segregated
and held in trust by us and thereafter repaid to us or discharged from such trust) have been delivered to the trustee for cancellation or (b) all debt securities not theretofore delivered to the trustee for cancellation have become due and
payable, will become due and payable at their stated maturity within one year, or are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and
at the expense, of us, and we or the guarantors, if any, have irrevocably deposited or caused to be deposited with the trustee funds, in an amount sufficient to pay and discharge the entire indebtedness on the debt securities not theretofore
delivered to the trustee for cancellation, for principal of and premium, if any, and interest on the debt securities to the date of deposit (in the case of debt securities that have become due and payable) or to the stated maturity or redemption
date, as the case may be, together with instructions from us irrevocably directing the trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
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(2) we have paid all other sums then due and payable under such indenture by us;
and
(3) we have delivered to the trustee an officers certificate and an opinion of counsel, which state that all
conditions precedent under such indenture relating to the satisfaction and discharge of such indenture have been complied with.
No Personal Liability
of Directors, Managers, Officers, Employees, Partners, Members and Stockholders
No director, manager, officer, employee, incorporator,
partner, member or stockholder of the company or any guarantor, as such, shall have any liability for any of our or the guarantors obligations under the debt securities, the indentures, the guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each holder of debt securities, upon our issuance of the debt securities and execution of the indentures, waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the debt securities. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
Denominations
Unless stated otherwise in
the prospectus supplement for each issuance of debt securities, the debt securities will be issued in denominations of $1,000 each or integral multiples of $1,000.
Paying Agent and Registrar
The trustee
will initially act as paying agent and registrar for the debt securities. We may change the paying agent or registrar without prior notice to the holders of the debt securities, and we may act as paying agent or registrar.
Transfer and Exchange
A holder may
transfer or exchange debt securities in accordance with the applicable indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and we may require a holder to pay
any taxes and fees required by law or permitted by the applicable indenture. We are not required to transfer or exchange any debt security selected for redemption. In addition, we are not required to transfer or exchange any debt security for a
period of 15 days before a selection of debt securities to be redeemed.
Subordination
The payment of the principal of and premium, if any, and interest on subordinated debt securities and any of our other payment obligations in
respect of subordinated debt securities (including any obligation to repurchase subordinated debt securities) is subordinated in certain circumstances in right of payment, as set forth in the subordinated indenture, to the prior payment in full in
cash of all senior debt.
We also may not make any payment, whether by redemption, purchase, retirement, defeasance or otherwise, upon or
in respect of subordinated debt securities, except from a trust described under Legal Defeasance and Covenant Defeasance, if
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a default in the payment of all or any portion of the obligations on any designated senior debt (payment default) occurs that has not been cured or waived, or
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any other default occurs and is continuing with respect to designated senior debt pursuant to which the maturity thereof may be accelerated (nonpayment default) and, solely with respect to this clause, the
trustee for the subordinated debt securities receives a notice of the default (a payment blockage notice) from the trustee or other representative for the holders of such designated senior debt.
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Cash payments on subordinated debt securities will be resumed (a) in the case of a payment default, upon the date on which such default
is cured or waived, and (b) in case of a nonpayment default, the earliest of the date on which such nonpayment default is cured or waived, the termination of the payment blockage period by written
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notice to the trustee for the subordinated debt securities from the trustee or other representative for the holders of such designated senior debt, the payment in full of such designated senior
debt or 179 days after the date on which the applicable payment blockage notice is received. No new payment blockage period may be commenced unless and until 360 days have elapsed since the date of commencement of the payment blockage period
resulting from the immediately prior payment blockage notice. No nonpayment default in respect of designated senior debt that existed or was continuing on the date of delivery of any payment blockage notice to the trustee for the subordinated debt
securities will be, or be made, the basis for a subsequent payment blockage notice unless such default shall have been cured or waived for a period of no less than 90 consecutive days.
Upon any payment or distribution of our assets or securities (other than with the money, securities or proceeds held under any defeasance
trust established in accordance with the subordinated indenture) in connection with any dissolution or winding up or total or partial liquidation or reorganization of us, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership
or other proceedings or other marshalling of assets for the benefit of creditors, all amounts due or to become due upon all senior debt shall first be paid in full, in cash or cash equivalents, before the holders of the subordinated debt securities
or the trustee on their behalf shall be entitled to receive any payment by or on behalf of us on account of the subordinated debt securities, or any payment to acquire any of the subordinated debt securities for cash, property or securities, or any
distribution with respect to the subordinated debt securities of any cash, property or securities. Before any payment may be made by, or on behalf of, us on any subordinated debt security (other than with the money, securities or proceeds held under
any defeasance trust established in accordance with the subordinated indenture) in connection with any such dissolution, winding up, liquidation or reorganization, any payment or distribution of our assets or securities, to which the holders of
subordinated debt securities or the trustee on their behalf would be entitled, shall be made by us or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person making such payment or distribution, or by the holders
or the trustee if received by them or it, directly to the holders of senior debt or their representatives or to any trustee or trustees under any indenture pursuant to which any such senior debt may have been issued, as their respective interests
appear, to the extent necessary to pay all such senior debt in full, in cash or cash equivalents, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of such senior debt.
As a result of these subordination provisions, in the event of our liquidation, bankruptcy, reorganization, insolvency, receivership or
similar proceeding or an assignment for the benefit of our creditors or a marshalling of our assets or liabilities, holders of subordinated debt securities may receive ratably less than other creditors.
Payment and Transfer
Principal, interest
and any premium on fully registered debt securities will be paid at designated places. Payment will be made by check mailed to the persons in whose names the debt securities are registered on days specified in the indentures or any prospectus
supplement. Debt securities payments in other forms will be paid at a place designated by us and specified in a prospectus supplement.
Fully registered debt securities may be transferred or exchanged at the office of the trustee or at any other office or agency maintained by
us for such purposes, without the payment of any service charge except for any tax or governmental charge.
Global Securities
The debt securities of a series may be issued in whole or in part in the form of one or more global certificates that we will deposit with a
depositary identified in the applicable prospectus supplement. Unless and until it is exchanged in whole or in part for the individual debt securities that it represents, a global security may not be transferred except as a whole:
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by the applicable depositary to a nominee of the depositary;
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by any nominee to the depositary itself or another nominee; or
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by the depositary or any nominee to a successor depositary or any nominee of the successor.
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We will describe the specific terms of the depositary arrangement with respect to a series of
debt securities in the applicable prospectus supplement. We anticipate that the following provisions will generally apply to depositary arrangements.
When we issue a global security in registered form, the depositary for the global security or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the individual debt securities represented by that global security to the accounts of persons that have accounts with the depositary (participants). Those accounts
will be designated by the dealers, underwriters or agents with respect to the underlying debt securities or by us if those debt securities are offered and sold directly by us. Ownership of beneficial interests in a global security will be limited to
participants or persons that may hold interests through participants. For interests of participants, ownership of beneficial interests in the global security will be shown on records maintained by the applicable depositary or its nominee. For
interests of persons other than participants, that ownership information will be shown on the records of participants. Transfer of that ownership will be effected only through those records. The laws of some states require that certain purchasers of
securities take physical delivery of securities in definitive form. These limits and laws may impair our ability to transfer beneficial interests in a global security.
As long as the depositary for a global security, or its nominee, is the registered owner of that global security, the depositary or nominee
will be considered the sole owner or holder of the debt securities represented by the global security for all purposes under the applicable indenture. Except as provided below, owners of beneficial interests in a global security:
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will not be entitled to have any of the underlying debt securities registered in their names;
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will not receive or be entitled to receive physical delivery of any of the underlying debt securities in definitive form; and
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will not be considered the owners or holders under the indenture relating to those debt securities.
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Payments of the principal of, any premium on and any interest on individual debt securities represented by a global security registered in the
name of a depositary or its nominee will be made to the depositary or its nominee as the registered owner of the global security representing such debt securities. Neither we, the trustee for the debt securities, any paying agent nor the registrar
for the debt securities will be responsible for any aspect of the records relating to or payments made by the depositary or any participants on account of beneficial interests in the global security.
We expect that the depositary or its nominee, upon receipt of any payment of principal, any premium or interest relating to a global security
representing any series of debt securities, immediately will credit participants accounts with the payments. Those payments will be credited in amounts proportional to the respective beneficial interests of the participants in the principal
amount of the global security as shown on the records of the depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in the global security held through those participants will be governed by
standing instructions and customary practices. This is now the case with securities held for the accounts of customers registered in street name. Those payments will be the sole responsibility of those participants.
If the depositary for a series of debt securities is at any time unwilling, unable or ineligible to continue as depositary and we do not
appoint a successor depositary within 90 days, we will issue individual debt securities of that series in exchange for the global security or securities representing that series. In addition, we may at any time in our sole discretion determine
not to have any debt securities of a series represented by one or more global securities. In that event, we will issue individual debt securities of that series in exchange for the global security or securities. The foregoing is subject to any
limitations described in the applicable prospectus supplement.
In any such instance, the owner of the beneficial interest will be entitled to physical
delivery of individual debt securities equal in principal amount to the beneficial interest and to have the debt securities registered in its name. Those individual debt securities will be issued in any authorized denominations.
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Governing Law
Each indenture and the debt securities will be governed by and construed in accordance with the laws of the State of New York.
Information Concerning the Trustee
The
Bank of New York Mellon will be the trustee under the indentures. A successor trustee may be appointed in accordance with the terms of the indentures.
The indentures and the provisions of the Trust Indenture Act incorporated by reference therein will contain certain limitations on the rights
of the trustee, should it become a creditor of us, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest (within the meaning of the Trust Indenture Act), it must eliminate such conflicting interest or resign.
A single banking or financial institution may act as trustee with respect to both the subordinated indenture and the senior indenture. If this
occurs, and should a default occur with respect to either the subordinated debt securities or the senior debt securities, such banking or financial institution would be required to resign as trustee under one of the indentures within 90 days of
such default, pursuant to the Trust Indenture Act, unless such default were cured, duly waived or otherwise eliminated.