DESCRIPTION OF THE DEBT SECURITIES
The following is a summary of certain general terms and provisions of the debt securities and the indenture, but they are not complete
and are subject to, and are qualified in their entirety by reference to, all of the provisions of the indenture, which has been filed as an exhibit to the registration statement of which this
prospectus is a part, including the definitions of specified terms used in the indenture, and to the Trust Indenture Act of 1939, as amended, or the "Trust Indenture Act." The particular terms of the
debt securities offered by any prospectus supplement and the extent these general provisions may apply to the debt securities will be described in the applicable prospectus supplement. The terms of
the debt securities will include those set forth in the indenture, any related documents and those made a part of the indenture by the Trust Indenture Act. You should read the summary below, the
applicable prospectus supplement and the provisions of the indenture and any related documents before investing in our debt securities.
The
prospectus supplement relating to any series of debt securities that we may offer will contain the specific terms of the debt securities. These terms may include the
following:
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the title and any limit on the aggregate principal amount of the debt securities;
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whether the debt securities will be secured or unsecured;
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whether the debt securities are to be convertible into or exchangeable for cash and/or any securities or other property of any person
(including us), the terms and conditions upon which such debt securities will be so convertible or exchangeable;
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whether the debt securities are senior or subordinated debt securities and, if subordinated, the terms of such subordination;
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the percentage or percentages of principal amount at which such debt securities will be issued;
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the interest rate(s) or the method for determining the interest rate(s);
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the dates on which interest will accrue or the method for determining dates on which interest will accrue and dates on which interest will be
payable;
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the record dates for the determination of holders to whom interest is payable or the method for determining such dates;
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the dates on which the debt securities may be issued, the maturity date and other dates of payment of principal;
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redemption or early repayment provisions;
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authorized denominations if other than denominations of $2,000 and multiples of $1,000 in excess thereof;
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the form of the debt securities;
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amount of discount or premium, if any, with which such debt securities will be issued;
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whether such debt securities will be issued in whole or in part in the form of one or more global securities;
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the identity of the depository for global securities;
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whether a temporary security is to be issued with respect to such series and whether any interest payable prior to the issuance of definitive
securities of the series will be credited to the account of the persons entitled thereto;
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the terms upon which beneficial interests in a temporary global security may be exchanged in whole or in part for beneficial interests in a
definitive global security or for individual definitive securities;
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any covenants applicable to the particular debt securities being issued;
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any defaults and events of default applicable to the particular debt securities being issued;
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any provisions for the defeasance of the particular debt securities being issued in whole or in part;
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any addition or change in the provisions related to satisfaction and discharge;
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any restriction or condition on the transferability of the debt securities;
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if other than U.S. dollars, the currency, currencies or currency units in which the purchase price for, the principal of and any premium and
any interest on, such debt securities will be payable;
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the time period within which, the manner in which and the terms and conditions upon which the purchaser of the debt securities can select the
payment currency;
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the securities exchange(s) or automated quotation system(s) on which the securities will be listed or admitted to trading, as applicable, if
any;
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provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued under the
indenture;
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place or places where we may pay principal, premium, if any, and interest and where holders may present the debt securities for registration of
transfer, exchange or conversion;
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place or places where notices and demands relating to the debt securities and the indentures may be made;
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if other than the principal amount of the debt securities, the portion of the principal amount of the debt securities that is payable upon
declaration of acceleration of maturity;
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any index or formula used to determine the amount of payments of principal of, premium (if any) or interest on the debt securities and the
method of determining these amounts;
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any provisions relating to compensation, reimbursement and indemnification of the trustee;
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events; and
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additional terms not inconsistent with the provisions of the indenture, except as permitted by the terms of the indenture.
General
We may sell the debt securities, including original issue discount securities, at par or at greater than de minimis discount below their stated principal
amount. Unless we inform you otherwise in a prospectus supplement, the purchase price for, the principal of and any premium and any interest on such debt securities will be payable in U.S. dollars.
Unless we inform you otherwise in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the holders of the debt securities of such series
outstanding at the time of issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities under
the indenture. Such additional debt securities will have the same terms and conditions as the applicable series of debt securities in all respects (or in all respects except for the issue date, the
issue price or the first payment of interest), and will vote together as one class on all matters with respect to such series of debt securities. We shall not issue any additional debt securities of a
series unless such additional debt securities are fungible with the outstanding debt securities of such series for U.S. federal income tax purposes. Unless we inform you otherwise in the applicable
prospectus supplement, the debt securities will not be listed on any securities exchange.
Form, Exchange and Transfer
The debt securities will be issued in fully registered form without interest coupons and, unless otherwise indicated in the applicable prospectus supplement,
in minimum denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.
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The
entity performing the role of maintaining the list of registered holders is called the "registrar." The registrar acts as our agent for registering debt securities in the names of holders and
transferring registered debt securities. You may exchange or transfer your registered debt securities at the specified office of the registrar. We may also arrange for additional registrars, and may
change registrars. We may also choose to act as our own registrar.
You
will not be required to pay a service charge for any registration of transfer or exchange of debt securities, but you may be required to pay any tax or other governmental charge associated with
the registration of transfer or exchange. The registration of transfer or exchange of a registered debt security will only be made if you have duly endorsed the debt security or provided the registrar
with a written instrument of transfer satisfactory in form to the registrar.
Payment and Paying Agents
If your debt securities are in definitive registered form, we will pay interest to you if you are listed in the registrar's records as a direct holder at the
close of business on a particular day in advance of each due date for interest, even if you no longer own the debt securities on the interest due date. That particular day is called the "record date"
and will be stated in the applicable prospectus supplement.
We
will pay interest, principal, Additional Amounts (as defined below) and any other money due on global registered debt securities pursuant to the applicable procedures of the depository or, if the
debt securities are not in global form, at offices maintained for that purpose in New York, New York. These offices are called "paying agents." We may also choose to pay interest by mailing checks. We
may also arrange for additional payment
agents, and may change these agents, including our use of the trustee's corporate trust office. We may also choose to act as our own paying agent.
Regardless
of who acts as paying agent, all money that we pay as principal, premium or interest to a paying agent, or then held by us in trust, that remains unclaimed at the end of two years after the
amount is due to direct holders will be repaid to us, or if then held by us, discharged from trust. After that two-year period, direct holders may look only to us for payment and not to the trustee,
any other paying agent or anyone else.
Street
name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
Tax Redemption
Each series of debt securities may be redeemed at any time, at our option, in whole but not in part, upon notice as described below, at a redemption price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date fixed for redemption, if (i) as a result of any change in, or amendment
to, the laws or regulations of a Relevant Jurisdiction (as defined below) (or, in the case of Additional Amounts payable by a successor Person to us, the applicable Successor Jurisdiction (as defined
below)), or any change in the official application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the issue date of the applicable
series of debt securities (or, in the case of Additional Amounts payable by a successor Person to us, the date on which such successor Person to us became such pursuant to the indenture) (a "Tax
Change"), we or any such successor Person to us is, or would be, obligated to pay Additional Amounts upon the next payment of principal, premium (if any) or interest in respect of such debt securities
and (ii) such obligation cannot be avoided by us or any such successor Person to us taking reasonable measures available to it, provided that changing our or such successor Person's
jurisdiction of organization or tax residency is not a reasonable measure for purposes of this section.
Prior
to the giving of any notice of redemption of debt securities pursuant to the foregoing, we or any such successor Person to us shall deliver to the trustee (i) a notice of such redemption
election, (ii) an opinion of an independent legal counsel or an opinion of an independent tax consultant to the effect that we or any such successor Person to us is, or would become, obligated
to pay such Additional Amounts as the result of a Tax Change and (iii) an officer's certificate from us or any such successor Person to us, stating that such amendment or
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change
has occurred, describing the facts leading thereto and stating that such requirement cannot be avoided by us or any such successor Person to us taking reasonable measures available to it.
Notice
of such a redemption of debt securities shall be given to the holders of the debt securities not less than 30 days nor more than 60 days prior to the date fixed for redemption.
Notice having been given, the debt securities of that series shall become due and payable on the date fixed for redemption and will be paid at the redemption price, together with accrued and unpaid
interest, if any, to, but not including, the date fixed for redemption, at the place or places of payment and in the manner specified in that series of debt securities or the indenture. From and after
the redemption date, if moneys for the redemption of such debt securities shall have been made available as provided in the indenture for redemption on the redemption date, the debt securities of such
series shall cease to bear interest, and the only right of the holders of such debt securities shall be to receive payment of the redemption price and accrued and unpaid interest, if any, to, but not
including, the date fixed for redemption.
Payment of Additional Amounts
All payments of principal, premium, if any, and interest made by us in respect of the debt securities of each series will be made without withholding or
deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (collectively, "Taxes") imposed or levied by or within the Cayman Islands
or the PRC (in each case, including any political subdivision or any authority therein or thereof having power to tax) (each, a "Relevant Jurisdiction"), unless such withholding or deduction of such
Taxes is required by law. If we are required to make such withholding or deduction, we will pay such additional amounts ("Additional Amounts") as will result in receipt by each holder of any debt
securities of such amounts as would have been received by such holder had no such withholding or deduction of such Taxes been required, except that no such Additional Amounts shall be
payable:
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(i)
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in
respect of any such Taxes that would not have been imposed, deducted or withheld but for the existence of any connection (whether present or former) between the
holder or beneficial owner of a debt security and the Relevant Jurisdiction other than merely holding such debt security or receiving principal, premium (if any) or interest in respect thereof
(including such holder or beneficial owner being or having been a national, domiciliary or resident of such Relevant Jurisdiction or treated as a resident thereof or being or having been physically
present or engaged in a trade or business therein or having or having had a permanent establishment therein);
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(ii)
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in
respect of any debt security presented for payment (where presentation is required) more than 30 days after the relevant date, except to the extent that
the holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on the last day of such 30-day period. For this purpose, the "relevant date" in relation to
any debt security means the later of (a) the due date for such payment or (b) the date such payment was made or duly provided for;
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(iii)
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in
respect of any Taxes that would not have been imposed, deducted or withheld but for a failure of the holder or beneficial owner of a debt security to comply
with a timely request by us addressed to the holder or beneficial owner to provide information concerning such holder's or beneficial owner's nationality, residence, identity or connection with any
Relevant Jurisdiction, if and to the extent that due and timely compliance with such request is required under the tax laws of such jurisdiction in order to reduce or eliminate any withholding or
deduction as to which Additional Amounts would have otherwise been payable to such holder;
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(iv)
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in
respect of any Taxes imposed as a result of a debt security being presented for payment (where presentation is required) in the Relevant Jurisdiction, unless
such debt security could not have been presented for payment elsewhere;
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(v)
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in
respect of any estate, inheritance, gift, sale, use, value added, excise, transfer, personal property, wealth, interest equalization or similar Taxes (other than
any value added Taxes imposed by the PRC or any political subdivision thereof if we were to be deemed a PRC tax resident);
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(vi)
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to
any holder of a debt security that is a fiduciary, partnership or person other than the sole beneficial owner of any payment to the extent that such payment
would be required by the laws of the Relevant Jurisdiction to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, or a member of that partnership or
a beneficial owner who would not have been entitled to such Additional Amounts had that beneficiary, settlor, partner or beneficial owner been the holder thereof;
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(vii)
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with
respect to any withholding or deduction that is imposed in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and U.S. Treasury
regulations thereunder ("FATCA"), any intergovernmental agreement between the United States and any other jurisdiction implementing or relating to FATCA or any non-U.S. law, regulation or guidance
enacted or issued with respect thereto;
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(viii)
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in
respect of any such Taxes payable otherwise than by deduction or withholding from payments under or with respect to any debt security; or
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(ix)
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in
respect of any combination of Taxes referred to in the preceding items (i) through (viii) above.
In
the event that any withholding or deduction for or on account of any Taxes is required and Additional Amounts are payable with respect thereto, at least 30 days prior to each date of payment
of principal of, premium (if any) or interest on the debt securities of any series, we will furnish to the trustee and the paying agent, if other than the trustee, an officer's certificate specifying
the amount required to be withheld or deducted on such payments to such holders, certifying that we shall pay such amounts required to be withheld to the appropriate governmental authority and
certifying to the fact that the Additional Amounts will be payable and the amounts so payable to each holder, and that we will pay to the trustee or such paying agent the Additional Amounts required
to be paid; provided that no such officer's certificate will be required prior to any date of payment of principal of, premium (if any) or interest on such debt securities if there has been no change
with respect to the matters set forth in a prior officer's certificate. The trustee and each paying agent may conclusively, rely on the fact that any officer's certificate contemplated by this
paragraph has not been furnished as evidence of the fact that no withholding or deduction for or on account of any Taxes is required. We covenant to indemnify the trustee and any paying agent for and
to hold them harmless against any loss or liability incurred without fraud, gross negligence or willful misconduct on their part arising out of or in connection with actions taken or omitted by any of
them in reliance on any such officer's certificate furnished pursuant to this paragraph or on the fact that any officer's certificate contemplated by this paragraph has not been furnished.
Whenever
there is mentioned, in any context, the payment of principal, premium or interest in respect of any debt security, such mention shall be deemed to include the payment of Additional Amounts
provided for in the indenture, to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the indenture.
The
foregoing provisions shall apply in the same manner with respect to the jurisdiction in which any successor Person to us is organized or resident for tax purposes or any authority therein or
thereof having the power to tax (a "Successor Jurisdiction"), substituting such Successor Jurisdiction for the Relevant Jurisdiction.
Our
obligation to make payments of Additional Amounts under the terms and conditions described above will survive any termination, defeasance or discharge of the indenture.
Consolidation, Merger and Sale of Assets
The indenture provides that we may not consolidate with or merge into any other Person in a transaction in which we are not the surviving entity, or convey,
transfer or lease our properties and assets substantially as an entirety to, any Person unless:
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(i)
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any
Person formed by such consolidation or into or with which we are merged or to whom we have conveyed, transferred or leased our properties and assets
substantially as an entirety is a corporation, partnership, trust or other entity validly existing under the laws of the British Virgin Islands, the Cayman
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Islands,
the PRC or Hong Kong and such Person expressly assumes by an indenture supplemental to the indenture all of our obligations under the indenture and the debt securities issued under the
indenture, including the obligation to pay Additional Amounts with respect to any jurisdiction in which it is organized or resident for tax purposes;
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(ii)
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immediately
after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
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(iii)
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we
have delivered to the trustee an officer's certificate and an opinion of independent legal counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture complies with the indenture and that all conditions precedent therein provided for relating to such transaction have been complied with.
Open Market Purchases
We or any of our Controlled Entities may, in accordance with all applicable laws and regulations, at any time purchase the debt securities issued under the
indenture in the open market or otherwise at any price, so long as such purchase does not otherwise violate the terms of the indenture. The debt securities so purchased, while held by or on behalf of
us or any of our Controlled Entities, shall not be deemed to be outstanding for the purposes of determining whether the holders of the requisite principal amount of outstanding debt securities have
given any request, demand, authorization, direction, notice, consent or waiver hereunder.
Modification and Waiver
The indenture will contain provisions permitting us and the trustee, without the consent of the holders of a series of debt securities, to execute
supplemental indentures for certain enumerated purposes in the indenture and, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of such
series then outstanding, to add, change, eliminate or modify in any way the provisions of the indenture or to change or modify in any manner the rights of the holders of the debt securities. The
trustee and we may not, however, without the consent of each holder of such series of debt securities:
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(i)
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change
the Stated Maturity of the principal or premium, if any, or any installment of interest of such debt securities;
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(ii)
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reduce
the principal amount of, payments of interest on or stated time for payment of interest on such debt securities;
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(iii)
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change
any obligation of ours to pay Additional Amounts with respect to such debt securities;
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(iv)
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change
the currency of payment of the principal of, premium (if any) or interest on such debt securities;
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(v)
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impair
the right to institute suit for the enforcement of any payment due on or with respect to such debt securities;
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(vi)
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reduce
the above stated percentage of outstanding debt securities of such series necessary to modify or amend the indenture;
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(vii)
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reduce
the percentage of the aggregate principal amount of outstanding debt securities of such series necessary for waiver of compliance with certain provisions of
the indenture or for waiver of certain defaults;
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(viii)
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modify
the provisions of the indenture with respect to modification and waiver;
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(ix)
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amend,
change or modify any provision of the indenture or the related definitions affecting the ranking of the debt securities in a manner which adversely affects
the holders of such series of debt securities; or
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(x)
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reduce
the amount of the premium payable upon the redemption or repurchase any of such series of debt securities or change the time at which any of the debt
securities of such series may be redeemed or repurchased as described above under the heading "Tax Redemption."
The
holders of not less than a majority in principal amount of the debt securities of a series may on behalf of all holders of the debt securities of such series waive any existing or past Default or
Event of Default and its consequences under the indenture, except a continuing Default or Event of Default (i) in the payment of principal of, premium (if any) or interest on (or Additional
Amount payable in respect of), the debt securities of such series then outstanding, in which event the consent of all holders of the debt securities of such series then outstanding
affected thereby is required, or (ii) in respect of a covenant or provision which under the indenture cannot be modified or amended without the consent of each holder of the debt securities of
such series then outstanding affected thereby. Any such waivers will be conclusive and binding on all holders of the debt securities of such series, whether or not they have given consent to such
waivers, and on all future holders of debt securities of such series, whether or not notation of such waivers is made upon the debt securities of such series. Any instrument given by or on behalf of
the debt securities of such series in connection with any consent to any such waiver will be irrevocable once given and will be conclusive and binding on all subsequent holders of the debt securities
of such series.
Notwithstanding
the foregoing, without the consent of any holder of the debt securities of such series, the trustee and we may amend the indenture and the debt securities of such series to, among
other things:
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(i)
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cure
any ambiguity, omission, defect or inconsistency contained in the indenture; provided, however, that such amendment does not materially and adversely affect the
rights of holders of such series of debt securities;
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(ii)
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evidence
the succession of another corporation, partnership, trust or other entity to the Company in accordance with the terms described under "Consolidation,
Merger and Sale of Assets," or successive successions, and the assumption by such successor of the covenants and obligations of the Company contained in such series of debt securities and in the
indenture;
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(iii)
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comply
with the rules of any applicable depository;
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(iv)
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secure
such series of debt securities;
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(v)
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add
to the covenants and agreements of the Company and to add Events of Default, in each case, for the protection or benefit of the holders of such series of debt
securities, or to surrender any right or power herein conferred upon the Company;
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(vi)
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make
any change in such series debt securities that does not adversely affect the legal rights under the indenture of any holder of the debt securities in any
material respect;
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(vii)
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evidence
and provide for the acceptance of an appointment under the indenture of a successor trustee; provided that the successor trustee is otherwise qualified
and eligible to act as such under the terms thereof;
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(viii)
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conform
the text of the indenture or any series of debt securities to any provision of this "Description of the Debt Securities" to the extent that such provision
in this prospectus was intended to be a verbatim recitation of a provision of the indenture or debt securities as evidenced by an officer's certificate;
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(ix)
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make
any amendment to the provisions of the indenture relating to the transfer and legending of such series of debt securities as permitted by the indenture,
including, but not limited to, facilitating the issuance and administration of such series of debt securities or, if incurred in compliance with the indenture, additional debt securities; provided,
however, that (A) compliance with the indenture as so amended would not result in such series of debt securities being transferred in violation of the Securities Act or any applicable
securities law and (B) such amendment does not materially and adversely affect the rights of holders to transfer the debt securities of such series;
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(x)
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make
any amendment to the indenture necessary to qualify the indenture under the Trust Indenture Act;
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(xi)
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establish
the form and terms of and to provide for the issuance of any additional debt securities permitted under the indenture, or add to the conditions,
limitations or restrictions on the authorized amount, terms or purposes of issue, authentication or delivery of the debt securities of any series, as set forth in the indenture, or other conditions,
limitations or restrictions thereafter to be observed; and
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(xii)
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add
guarantors or co-obligors with respect to the debt securities of such series.
The consent of the holders of the debt securities of such series is not necessary under the indenture to approve the particular form of any proposed amendment, supplement or
waiver. It is sufficient if such consent approves the substance of the proposed amendment or supplement. A consent to any amendment, supplement or waiver under the indenture by any holder given in
connection with a tender of such holder's debt securities of such series will not be rendered invalid by such tender. After an amendment, supplement or waiver under the indenture becomes effective, we
are required to give to the holders of such series of debt securities a notice briefly describing such amendment, supplement or waiver. However, the failure to give such notice to all the holders, or
any defect in the notice will not impair or affect the validity of the amendment, supplement or waiver.
Payments for Consent
We will not, and will not permit any of our Controlled Entities to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of
any holder of debt securities of any series for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the debt securities of such series unless
such consideration is offered to be paid and is paid to all holders of the relevant series of debt securities that consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or amendment.
Events of Default
Each of the following will be defined as an "Event of Default" under the indenture with respect to the applicable series of debt
securities:
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(i)
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failure
to pay principal or premium in respect of the debt securities when due and payable (whether at Stated Maturity or upon repurchase, acceleration, redemption
or otherwise);
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(ii)
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failure
to pay interest on the debt securities (including any additional interest) within 30 days after such interest becomes due and payable;
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(iii)
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default
in the performance of or breach of our obligations under "Consolidation, Merger and Sale of Assets";
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(iv)
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default
in the performance of or breach of any covenant or agreement in the indenture or under the debt securities (other than a default specified in
clause (i), (ii) or (iii) above) and such default or breach continues for a period of 30 consecutive days after written notice by the trustee or the holders of 25% or more in
aggregate principal amount of the debt securities;
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(v)
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the
entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of us or any Principal Controlled Entity in an
involuntary case or proceeding under any applicable bankruptcy, insolvency or other similar law or (ii) a decree or order adjudging us or any Principal Controlled Entity bankrupt or insolvent,
or approving as final and non-appealable a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of us or any Principal Controlled Entity under any applicable
bankruptcy, insolvency or other similar law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other similar official of us or any Principal Controlled Entity or of
any substantial part of their respective property, or ordering the winding up or liquidation of their respective affairs (or any similar relief granted under any foreign laws), and in any such case
the continuance of any
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However,
a default under clause (iv) of the preceding paragraph will not constitute an Event of Default until the trustee or the holders of 25% in principal amount of the then outstanding debt
securities of such series provide written notice to us of the default and we do not cure such default within the time specified in clause (iv) of the preceding paragraph after receipt of such
written notice.
If
an Event of Default (other than an Event of Default described in clauses (v) or (vi) above) shall occur and be continuing, either the trustee or the holders of at least 25% in
aggregate principal amount of the debt securities of such series then outstanding by written notice may declare the unpaid principal amount of the debt securities of such series and any accrued and
unpaid interest thereon (and any Additional Amount payable in respect thereof) to be due and payable immediately upon receipt of such notice. If an Event of Default described in clauses (v) or
(vi) above shall occur, the unpaid principal amount of all the debt securities then outstanding and any accrued and unpaid interest thereon will automatically, and without any declaration or
other action by the trustee or any holder of the debt securities, become immediately due and payable. After a declaration of acceleration but before a judgment or decree for payment of the money due
has been obtained by the trustee, the holders of at least a majority in aggregate principal amount of the debt securities of such series may, under certain circumstances, waive all past defaults and
rescind and annul such acceleration if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all Events of Default, other than the
non-payment of principal, premium, if any, or interest on the debt securities that became due solely because of the acceleration of the debt securities, have been cured or waived. For information as
to waiver of defaults, see " Modification and Waiver."
Subject
to the provisions of the indenture relating to the duties of the trustee, if an Event of Default shall occur and be continuing, the trustee will be under no obligation to exercise any of the
trusts or powers vested in it by the indenture at the request, order or direction of any of the holders of debt securities, unless such holders shall have
offered to the trustee pre-funding, security and/or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby. Subject to certain provisions,
including those requiring pre-funding, security and/or indemnification of the trustee, the holders of a majority in aggregate principal amount of the debt securities of such series then outstanding
will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee. No holder of
the debt securities will have any right to institute any proceeding, judicial or otherwise,
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with
respect to the indenture or the debt securities, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless (i) such holder has previously given to the
trustee written notice of a continuing Event of Default with respect to the debt securities of such series, (ii) the holders of at least 25% in aggregate principal amount of the debt securities
of such series then outstanding have made written request to the trustee to institute such proceeding, (iii) such holder or holders have offered pre-funding, security and/or indemnity
satisfactory to the trustee and (iv) the trustee has failed to institute such proceeding, and has not received from the holders of a majority in aggregate principal amount of the debt
securities of such series then outstanding a written direction inconsistent with such request, within 60 days after such notice, request and offer. However, such limitations do not apply to a
suit instituted by a holder of a debt security for the enforcement of the right to receive payment of the principal of, premium (if any) or interest on the debt securities on or after the applicable
due date specified in the debt securities.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect with respect to debt securities of a series when:
-
(1)
-
either:
-
(a)
-
all
debt securities of that series that have been authenticated, except lost, stolen or destroyed debt securities that have been replaced or paid and notes for whose
payment money has been deposited in trust and thereafter repaid to us, have been delivered to the paying agent for cancellation; or
-
(b)
-
all
debt securities of that series that have not been delivered to the paying agent for cancellation have become due and payable by reason of the sending of a notice
of redemption or otherwise or will become due and payable within one year and we have irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of
the holders of the debt securities of such series, cash in U.S. dollars, U.S. Government Obligations, or a combination of cash in U.S. dollars and U.S. Government Obligations, in amounts as will be
sufficient (in the case of a deposit not entirely in cash, in the opinion of an internationally recognized investment bank, appraisal firm or firm of independent public accountants), without
consideration of any reinvestment of interest, to pay and discharge the entire outstanding amount of the debt securities of such series not delivered to the paying agent for cancellation for
principal, premium, if any, and accrued interest to the date of maturity or redemption;
-
(2)
-
no
Default or Event of Default under the indenture has occurred and is continuing with respect to the debt securities of that series on the date of the deposit
(other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);
-
(3)
-
we
have paid or caused to be paid all sums payable by us under the indenture with respect to the debt securities of that series; and
-
(4)
-
we
have delivered irrevocable instructions to the trustee to apply the deposited money toward the payment of the debt securities of that series at maturity or the
redemption date, as the case may be.
In
addition, we must deliver an officer's certificate and an opinion of independent legal counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied.
Legal Defeasance and Covenant Defeasance
The 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 outstanding debt
securities of a series ("Legal Defeasance") except for:
-
(1)
-
the
rights of holders of the debt securities of that series that are then outstanding to receive payments in respect of the principal of, or interest or premium on
such debt securities when such payments are due from the trust referred to below;
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-
(2)
-
our
obligations with respect to the debt securities of that series concerning issuing temporary notes, registration of 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;
-
(3)
-
the
rights, powers, trusts, duties and immunities of the trustee for the debt securities of that series, and our obligations in connection therewith; and
-
(4)
-
the
Legal Defeasance and Covenant Defeasance (as defined below) provisions of the indenture for the debt securities of that series.
The
indenture will provide that, we may, at our option and at any time, elect to have our obligations with respect to the outstanding debt securities of a series released with respect to certain
covenants (including our obligations under the headings "Consolidation, Merger and Sale of Assets" and "Payments for Consent") that are described in the indenture ("Covenant Defeasance") and
thereafter any omission to comply with those covenants will not constitute a Default or Event of Default. In the event Covenant Defeasance occurs, certain events (not including nonpayment, bankruptcy,
receivership, rehabilitation and insolvency events) described under the caption " Events of Default" will no longer constitute an Event of Default.
The
indenture will also provide that, 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 all debt securities of that series subject to Legal Defeasance or Covenant
Defeasance, cash in U.S. dollars, U.S. Government Obligations, or a combination of cash in U.S. dollars and U.S. Government Obligations, in amounts as will be sufficient (in the case of a deposit not
entirely in cash, in the opinion of an internationally recognized investment bank, appraisal firm or firm of independent public accountants) to pay the principal of, or interest and premium on such
debt securities that are then outstanding on the Stated Maturity or on the applicable redemption date, as the case may be, and we must specify whether such debt securities are being defeased to
maturity or to a particular redemption date;
-
(2)
-
in
the case of Legal Defeasance, we must deliver to the trustee an opinion of independent legal counsel reasonably acceptable to the trustee confirming that
(a) we have received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the indenture, 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 independent legal counsel will confirm that, the holders of the then outstanding debt securities of that series
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 times 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 independent legal counsel reasonably acceptable to the trustee confirming that the
holders of the then outstanding debt securities of that series 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 with respect to the debt securities of that series must 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)
-
we
must deliver to the trustee an officer's certificate stating that the deposit was not made by us with the intent of preferring the holders of debt securities of
that series over our other creditors with the intent of defeating, hindering, delaying or defrauding our creditors or others; and
-
(6)
-
we
must deliver to the trustee an officer's certificate and an opinion of independent legal counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
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Concerning the Trustee
The trustee under the indenture is The Bank of New York Mellon, a banking corporation organized and existing under the laws of the State of New York with
limited liability. Pursuant to the indenture, The Bank of New York Mellon, a banking corporation organized and existing under the laws of the State of New York with limited liability, will be
designated by us as the initial paying and transfer agent and registrar (together, the "Agents") for the debt securities. The corporate trust office of the trustee is currently located at 240
Greenwich Street, New York, NY 10286, United States of America.
The
indenture provides that the trustee, except during the continuance of an Event of Default, undertakes to perform such duties and only such duties as are specifically set forth therein. If an Event
of Default has occurred and is continuing, the trustee will exercise such of the rights and powers vested in it by the indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
Whenever
the trustee shall have discretion or permissive power in accordance with the indenture or the law, the trustee may decline to exercise the same in the absence of approval by the holders and
shall have no obligation to exercise the same unless it has received pre-funding, been indemnified and/or provided with security to its satisfaction against all actions, proceedings, claims, actions
or demands to which it may render itself liable and all costs, damages, charges, expenses and liabilities which it may incur by so doing. Neither the trustee nor any of the Agents shall in any event
be responsible for indirect, special, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit, whether or not foreseeable, even if advised of the
possibility of such loss of damage and regardless of the form of action).
Subject
to the terms of the indenture and the Trust Indenture Act, the trustee is permitted to engage in other transactions with the Company and its affiliates and can profit therefrom without being
obliged to account for such profit; and the trustee shall not be under any obligation to monitor any conflict of interest, if any, which may arise between itself and such other parties. The Company
has custodial arrangements with the trustee and/or its affiliates. The Company may enter into similar or other banking relationships with the trustee or its affiliates in the future in the normal
course of business. In addition, the trustee acts as trustee and as paying agent and registrar with respect to other debt securities issued by the Company and may do so for future issuances of debt
securities by the Company as well. The trustee may have interest in, or may be providing, or may in the future provide financial services to other parties.
Currency Indemnity
To the fullest extent permitted by law, our obligations to any holder of debt securities under the indenture shall, notwithstanding any judgment in a currency
(the "Judgment Currency") other than U.S. dollars (the "Agreement Currency"), be discharged only to the extent that on the Business Day following receipt by such holder or the trustee, as the case may
be, of any amount in the Judgment Currency, such holder or the trustee, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.
If the amount of the Agreement Currency so purchased is less than the amount originally to be paid to such holder or the trustee, as the case may be, in the Agreement Currency, we agree, as a separate
obligation and notwithstanding such judgment, to pay the difference and if the amount of the Agreement Currency so purchased exceeds the amount originally to be paid to such holder, such holder or the
trustee, as the case may be, agrees to pay to or for our account such excess, provided that such holder shall not have any obligation to pay any such excess as long as a default by us in our
obligations under the indenture or the debt securities of the applicable series has occurred and is continuing, in which case such excess may be applied by such holder to such obligations.
Governing Law and Consent to Jurisdiction
The indenture and the debt securities will be governed by and will be construed in accordance with the laws of the State of New York. We have agreed that any
action arising out of or based upon the indenture may be instituted in any U.S. federal or New York State court located in the Borough of Manhattan, The City of New York, and have
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irrevocably
submitted to the non-exclusive jurisdiction of any such court in any such action. We have appointed Corporation Service Company, currently located at 19 West 44th Street,
Suite 200, New York, New York 10036, as our agent upon which process may be served in any such action.
We
have agreed that, to the extent that we are or become entitled to any sovereign or other immunity, we will waive such immunity in respect of our obligations under the indenture and the debt
securities.
Certain Definitions
Set forth below are definitions of certain of the terms used herein. Additional terms are defined elsewhere above or in the indenture.
"Business
Day" means a Monday, Tuesday, Wednesday, Thursday or Friday, unless banking institutions or trust companies in The City of New York, Hong Kong, Singapore or Beijing are authorized or
obligated by law, regulation or executive order to remain closed on such day.
"Capital
Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such
Person, including any Preferred Shares and limited liability or partnership interests (whether general or limited), but excluding any debt securities convertible or exchangeable into such equity.
"Company"
means Alibaba Group Holding Limited, an exempted company incorporated under the laws of the Cayman Islands.
"Consolidated
Affiliated Entity" of any Person means any corporation, association or other entity which is or is required to be consolidated with such Person under Accounting Standards Codification
subtopic 810-10, Consolidation: Overall (including any changes, amendments or supplements thereto) or, if such Person prepares its financial statements in accordance with accounting principles other
than U.S. GAAP, the equivalent of Accounting Standards Codification subtopic 810-10, Consolidation: Overall under such accounting principles. Unless otherwise specified herein, each reference
to a Consolidated Affiliated Entity will refer to a Consolidated Affiliated Entity of ours.
"Controlled
Entity" of any Person means a Subsidiary or a Consolidated Affiliated Entity of such Person.
"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.
"Group"
means the Company and our Controlled Entities.
"holder"
in relation to a debt security, means the Person in whose name a debt security is registered in the security register for the registration and the registration of transfer or of exchange of
the debt security.
"Lien"
means any mortgage, charge, pledge, lien or other form of encumbrance or security interest.
"Non-recourse
Obligation" means indebtedness or other obligations substantially related to (1) the acquisition of assets not previously owned by us or any of our Controlled Entities or
(2) the financing of a project involving the purchase, development, improvement or expansion of properties of ours or any of our Controlled Entities, as to which the obligee with respect to
such indebtedness or obligation has no recourse to us or any of our Controlled Entities of ours or to our or any such Controlled Entity's assets other than the assets which were acquired with the
proceeds of such transaction or the project financed with the proceeds of such transaction (and the proceeds thereof).
"Paying
Agent" means The Bank of New York Mellon or its successor as paying agent under the indenture.
"Person"
means any individual, corporation, firm, limited liability company, partnership, joint venture, undertaking, association, joint stock company, trust, unincorporated organization, trust,
state, government or any agency or political subdivision thereof or any other entity (in each case whether or not being a separate legal entity).
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"PRC"
means the People's Republic of China, excluding, for purposes of this definition, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.
"Preferred
Shares," as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends upon
liquidation, dissolution or winding up.
"Principal
Controlled Entities" at any time shall mean one of our Controlled Entities
-
(i)
-
as
to which one or more of the following conditions is/are satisfied:
-
(a)
-
its
total revenue or (in the case of one of our Controlled Entities which has one or more Controlled Entities) consolidated total revenue attributable to the Group
is at least 5% of the Group's consolidated total revenue;
-
(b)
-
its
net profit or (in the case of one of our Controlled Entities which has one or more Controlled Entities) consolidated net profit attributable to the Group (in
each case before taxation and exceptional items) is at least 5% of the Group's consolidated net profit (before taxation and exceptional items); or
-
(c)
-
its
net assets or (in the case of one of our Controlled Entities which has one or more Controlled Entities) consolidated net assets attributable to the Group (in
each case after deducting minority interests in Subsidiaries) are at least 10% of the Group's consolidated net assets (after deducting minority interests in Subsidiaries of the Company);
all
as calculated by reference to the then latest audited financial statements (consolidated or, as the case may be, unconsolidated) of our Controlled Entity and our then latest audited consolidated
financial statements;
provided
that, in relation to paragraphs (a), (b) and (c) above:
-
(1)
-
in
the case of a corporation or other business entity becoming a Controlled Entity after the end of the financial period to which our latest consolidated audited
accounts relate, the reference to our then latest consolidated audited accounts and our Controlled Entities for the purposes of the calculation above shall, until our consolidated audited accounts for
the financial period in which the relevant corporation or other business entity becomes a Controlled Entity are issued, be deemed to be a reference to the then latest consolidated audited accounts of
us and our Controlled Entities adjusted to consolidate the latest audited accounts (consolidated in the case of a Controlled Entity which itself has Controlled Entities) of such Controlled Entity in
such accounts;
-
(2)
-
if
at any relevant time in relation to us or any Controlled Entity which itself has Controlled Entities, no consolidated accounts are prepared and audited, total
revenue, net profit or net assets of us and/or any such Controlled Entity shall be determined on the basis of pro forma consolidated accounts prepared for this purpose by or on behalf of us;
-
(3)
-
if
at any relevant time in relation to any Controlled Entity, no accounts are audited, its net assets (consolidated, if appropriate) shall be determined on the basis
of pro forma accounts (consolidated, if appropriate) of the relevant Controlled Entity prepared for this purpose by or on behalf of us; and
-
(4)
-
if
the accounts of any Controlled Entity (not being a Controlled Entity referred to in proviso (1) above) are not consolidated with our accounts, then the
determination of whether or not such Controlled Entity is a Principal Controlled Entity shall be based on a pro forma consolidation of its accounts (consolidated, if appropriate) with our consolidated
accounts (determined on the basis of the foregoing); or
-
(ii)
-
that
Principal Controlled Entity merges with or into, or to which is transferred all or substantially all of the assets of a Controlled Entity which immediately
prior to the transfer was a Principal Controlled Entity; provided that, with effect from such transfer, the Controlled Entity which so transfers its assets and undertakings shall cease to be a
Principal Controlled Entity (but without prejudice to paragraph (i)
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An
officer's certificate delivered to the trustee certifying in good faith as to whether or not a Controlled Entity is a Principal Controlled Entity shall be conclusive in the absence of manifest
error.
"Relevant
Indebtedness" means any indebtedness which is in the form of, or represented or evidenced by, bonds, notes, debentures, or other securities which for the time being are, or are intended to
be or are commonly, quoted, listed or dealt in or traded on any stock exchange or over-the-counter or other securities market, but shall exclude any bank debt, bank loans or securitizations.
"Stated
Maturity" means, when used with respect to any debt security or any installment of principal thereof or interest thereon, the date specified in such debt security as the fixed date on which
the principal (or any portion thereof) of or premium, if any, on such debt security or such installment of principal or interest is due and payable.
"Subsidiary"
of any Person means (a) 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 ordinary 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
(or Persons performing similar functions) or (b) any partnership, joint venture limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights,
total equity and voting interests or general or limited partnership interests, as applicable, is, in the case of clauses (a) and (b), voting at the time owned or controlled, directly or
indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. Unless otherwise specified herein, each
reference to a Subsidiary will refer to a Subsidiary of the Company.
"trustee"
means The Bank of New York Mellon or its successor as trustee under the indenture.
"U.S. GAAP"
refers to generally accepted accounting principles in the United States of America.
"U.S.
Government Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or
(ii) obligations of an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depositary 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 depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced by such depositary receipt.
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LEGAL OWNERSHIP OF DEBT SECURITIES
In this prospectus and the applicable prospectus supplement, when we refer to the "holders" of debt securities as being entitled to specified rights or
payments, we mean only the actual legal holders of the debt securities. While you will be the holder if you hold a security registered in your name, more often than not the registered holder will
actually be a broker, bank, other financial institution or, in the case of a global security, a depository. Our obligations, as well as the obligations of the trustee, any registrar, any depository
and any third parties employed by us or the other entities listed above, run only to persons who are registered as holders of our debt securities, except as may be specifically provided for in a
contract governing the debt securities. For example, once we make payment to the registered holder, we have no further responsibility for the payment even if that registered holder is legally required
to pass the payment along to you as a street name customer but does not do so.
Street Name and Other Indirect Holders
Holding debt securities in accounts at banks or brokers is called holding in "street name." If you hold our debt securities in street name, we will recognize
only the bank or broker, or the financial institution that the bank or broker uses to hold the debt securities, as a holder. These intermediary banks, brokers, other financial institutions and
depositaries pass along principal, interest, dividends and other payments, if any, on the debt securities, either because they agree to do so in their customer agreements or because they are legally
required to do so. This means that if you are an indirect holder, you will need to coordinate with the institution through which you hold your interest in a security in order to determine how the
provisions involving holders described in this prospectus and any applicable prospectus supplement will actually apply to you. For example, if the debt security in which you hold a beneficial interest
in street name can be repaid at the option of the holder, you cannot redeem it yourself by following the procedures described in the prospectus supplement relating to that security. Instead, you would
need to cause the institution through which you hold your interest to take those actions on your behalf. Your institution may have procedures and deadlines different from or additional to those
described in the applicable prospectus supplement.
If
you hold our debt securities in street name or through other indirect means, you should check with the institution through which you hold your interest in a security to find out, among other
things:
-
-
how it handles payments and notices with respect to the debt securities;
-
-
whether it imposes fees or charges;
-
-
how it handles voting, if applicable;
-
-
how and when you should notify it to exercise any rights or options that may exist under the debt securities on your behalf;
-
-
whether and how you can instruct it to send you debt securities registered in your own name so you can be a direct holder; and
-
-
how it would pursue rights under the debt securities if there were a default or other event triggering the need for holders to act to protect
their interests.
Global Securities
A global security is a special type of indirectly held security. If we issue debt securities in the form of global securities, the ultimate beneficial owners
can only be indirect holders. We do this by requiring that the global security be registered in the name of a financial institution we select and by requiring that the debt securities included in the
global security not be transferred to the name of any other direct holder unless the special circumstances described below occur. The financial institution that acts as the sole direct holder of the
global security is called the "depository." Any person wishing to own a security issued in global form must do so indirectly through an account with a broker, bank or other financial institution that
in turn has an account with the
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depository.
The applicable prospectus supplement will indicate whether the debt securities will be issued only as global securities.
As
an indirect holder, your rights relating to a global security will be governed by the account rules of your financial institution and of the depository, as well as general laws relating to
securities transfers. We will not recognize you as a holder of the debt securities and instead will deal only with the depository that holds the global security.
You
should be aware that if our debt securities are issued only in the form of global securities:
-
-
you cannot have the debt securities registered in your own name;
-
-
you cannot receive physical certificates for your interest in the debt securities;
-
-
you will be a street name holder and must look to your own bank or broker for payments on the debt securities and protection of your legal
rights relating to the debt securities;
-
-
you may not be able to sell interests in the debt securities to some insurance companies and other institutions that are required by law to own
their debt securities in the form of physical certificates;
-
-
the depository's policies will govern payments, dividends, transfers, exchange and other matters relating to your interest in the global
security. We, the trustee and the Agents have no responsibility for any aspect of the depository's actions or for its records of ownership interests in the global security. We, the trustee and the
Agents also do not supervise the depository in any way; and
-
-
the depository will require that interests in a global security be purchased or sold within its system using same-day funds for settlement.
In
a few special situations described below, a global security representing our debt securities will terminate and interests in it will be exchanged for physical certificates representing the debt
securities. After that exchange, the choice of whether to hold debt securities directly or in street name will be up to you. You must consult your bank or broker to find out how to have your interests
in the debt securities transferred to your name if you wish to become a direct holder.
Unless
we specify otherwise in the applicable prospectus supplement, the special situations for termination of a global security representing our debt securities
are:
-
-
the depository has notified us that it is unwilling or unable to continue as depository for such global security or the depository ceases to be
a clearing agency registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, at a time when such depository is required to be so registered in order to act as depository,
and in each case we do not or cannot appoint a successor depository within 90 days; or
-
-
upon request by holders, in case that an event of default with respect to the debt securities of the applicable series has occurred and is
continuing.
The
applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of debt securities covered by that prospectus
supplement. When a global security terminates, the depository (and not us, the trustee or any Agent) is responsible for deciding the names of the institutions that will be the initial direct holders.
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