We have made in this prospectus and in the documents incorporated herein by reference, and may from time to time otherwise make in other
public filings, press releases and discussions with our management, forward-looking statements as that term is defined in Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements, other than
historical facts, including statements regarding the presentation of the Issuers operations in future reports and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future
circumstances and results and other statements that are not historical facts and are sometimes identified by the words may, will, should, potential, intend, expect,
endeavor, seek, anticipate, estimate, overestimate, underestimate, believe, could, project, predict, continue,
target or other similar words or expressions. Forward looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a
representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, the risk factors identified under
Risk Factors beginning on page 10 of this prospectus, the risk factors in the Risk Factors section of the Annual Report, Proxy Statement/Prospectus, the Q2 2017 Quarterly Report, the Q3 2017 Quarterly Report and those set
forth from
time-to-time
in other filings by BHGE LLC with the SEC. These documents are available through our website or through the SECs Electronic Data Gathering
and Analysis Retrieval system at http://www.sec.gov.
THE EXCHANGE OFFERS
As used in this section, the terms the Issuers, we, us and our refer collectively to Baker
Hughes, a GE company, LLC and Baker Hughes Co-Obligor, Inc.
Purpose and Effect of the Exchange Offers
The Issuers entered into the Registration Rights Agreement with Morgan Stanley & Co. LLC, Barclays Capital Inc., Citigroup Global
Markets Inc. and Deutsche Bank Securities Inc., as representatives of the initial purchasers named therein (the initial purchasers) in which they agreed, under certain circumstances, to use commercially reasonable efforts to file
registration statements relating to offers to exchange the Restricted Notes for Exchange Notes and consummate such exchange offers on or prior to December 11, 2018. The Exchange Notes will have terms identical in all material respects to the
Restricted Notes of the same series, except that the Exchange Notes are registered under the Securities Act and will not contain restrictions on transfer or provisions relating to additional interest, will bear a different CUSIP number from the
Restricted Notes of the same series and will not entitle their holders to registration rights.
If you wish to exchange your outstanding
Restricted Notes for Exchange Notes in the exchange offers, you will be required to make the following written representations:
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you are not our affiliate within the meaning of Rule 405 of the Securities Act or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act, to the
extent applicable;
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you are not participating, and you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of
the Securities Act;
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if you are a broker dealer, you have not entered into any arrangement or understanding with us or any of our affiliates to distribute the Exchange Notes;
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you are acquiring the Exchange Notes in the ordinary course of your business; and
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you are not acting on behalf of any person or entity that could not truthfully make these representations.
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Each broker-dealer that receives Exchange Notes for its own account in exchange for Restricted Notes, where such Restricted Notes were
acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will comply with the registration and prospectus delivery requirements of the Securities Act in connection with any offer,
resale or other transfer of such Exchange Notes, including information with respect to any selling holder required by the Securities Act in connection with the resale of the Exchange Notes. We have agreed that for a period of 180 days after the
effective date of the registration statement of which this prospectus is a part (or for such shorter period during which broker-dealers are required by law to deliver such prospectus), we will make this prospectus available to any broker-dealer for
use in connection with any such resale. See Plan of Distribution.
Exchange and Registration Rights Agreement
At the closing of the offering of Restricted Notes, the Issuers and the initial purchasers entered into a registration rights agreement with
respect to the Restricted Notes (the Registration Rights Agreement). Under the Registration Rights Agreement, the Issuers agreed for the benefit of the holders of the Restricted Notes, that the Issuers will, at its cost, (a) file a
registration statement for the notes (an Exchange Offer Registration Statement) with the SEC with respect to a registered offer to exchange each series of Restricted Notes issued at their issue date the Exchange Notes having terms
substantially identical to such Restricted Notes (except that the Exchange Notes will not contain terms with respect to transfer restrictions or payment of additional interest), (b) use reasonable best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act and (c) upon the effectiveness of the Exchange Offer Registration Statement, offer Exchange Notes in exchange for surrender of the Restricted Notes (a Registered
Exchange Offer). The Issuers agreed to keep the Registered Exchange Offer for each series of Restricted Notes open for not less than 20 business days and to use their reasonable best efforts to complete the Registered Exchange Offer by
December 11, 2018.
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For each Restricted Note surrendered to the Issuers pursuant to the Registered Exchange Offer,
the holder of such Restricted Note will receive an Exchange Note having a principal amount equal to that of the surrendered Restricted Note. Interest on each Exchange Note will accrue from the last interest payment date on which interest was paid on
the Restricted Note surrendered in exchange thereof or, if no interest has been paid on such Restricted Note, from the date of its original issue.
The Registration Rights Agreement provides that if (i) change in law or applicable interpretations of the staff of the SEC do not permit
the Issuers to effect the Registered Exchange Offer provided for under such agreement, (ii) for any other reason the Registered Exchange Offer is not consummated by December 11, 2018, (iii) an initial purchaser determines upon advice of
its counsel that a Shelf Registration Statement must be filed in connection with any public offering or sale of Restricted Notes that are not eligible to be exchanged for Exchange Notes in the Registered Exchange Offer and that are held by it
following consummation of the Registered Exchange Offer or (iv) any holder of Restricted Notes (other than an initial purchaser) is not eligible to participate in the Registered Exchange Offer or does not receive freely tradeable Exchange Notes
in the Registered Exchange Offer other than by reason of such holder being an affiliate of the Issuers (it being understood that the requirement that a participating broker-dealer deliver the prospectus contained in the Exchange Offer Registration
Statement in connection with sales of Exchange Notes shall not result in such Exchange Notes being not freely tradeable), the Issuers will, at its cost, (a) as promptly as practicable, but in no event later than 90 days after such
obligation to file arises, file a shelf registration statement (the Shelf Registration Statement) covering resales of the Restricted Notes or Exchange Notes, as the case may be, (b) use its reasonable best efforts to cause the Shelf
Registration Statement to become effective under the Securities Act on or prior to December 11, 2018 and (c) use its reasonable best efforts to keep the Shelf Registration Statement effective until the earliest of (A) the time when
all the Restricted Notes or Exchange Notes covered by the Shelf Registration Statement can be sold pursuant to Rule 144 without any limitations by
non-affiliates
of ours under clause (d) of Rule 144, (B)
the date on which all such Restricted Notes or Exchange Notes are disposed of in accordance with the Shelf Registration Statement and (C) one year after its effective date.
The Issuers will, if a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration
Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit
unrestricted resales of the Restricted Notes or the Exchange Notes, as the case may be, covered by such Shelf Registration Statement. A holder selling such Restricted Notes or Exchange Notes pursuant to the Shelf Registration Statement generally
would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement which is applicable to such holder (including certain indemnification obligations).
The Registration Rights Agreement will provide that if (a) on or prior to December 11, 2018, the Registered Exchange Offer has not
been consummated and a Shelf Registration Statement is not then effective under the Securities Act, or (b) after either the Exchange Offer Registration Statement or the Shelf Registration Statement provided for under such agreement has become
effective, such Registration Statement thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of Restricted Notes or Exchange Notes in accordance with and during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a) and (b), a Registration Default), then, as liquidated damages, interest (Special Interest) will accrue on the principal amount of the affected
notes and the exchange notes (in addition to the stated interest on the Restricted Notes and the Exchange Notes) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration
Defaults have been cured. Special Interest will accrue at a rate of 0.25% per annum. The Issuers will pay Special Interest on regular interest payment dates in the same manner as other interest.
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If we effect the exchange offers, we will be entitled to close the exchange offers 20 business
days after their commencement; provided that we have accepted all Restricted Notes validly surrendered in accordance with the terms of the exchange offers. Restricted Notes not tendered in the exchange offer shall bear interest at the rate set forth
on the cover page of this prospectus and be subject to all the terms and conditions specified in the indenture, including transfer restrictions.
The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is filed or incorporated by reference as an exhibit to this registration statement.
Terms of the Exchange Offer
On the terms
and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, the Issuers will accept for exchange in the exchange offers any outstanding Restricted Notes that are validly tendered and not validly
withdrawn prior to the Expiration Date. Outstanding Restricted Notes may only be tendered in a minimum denomination of $2,000 and integral multiples of $1,000 in excess of $2,000. No alternative, conditional or contingent tenders will be accepted.
Holders who tender less than all of their Restricted Notes must continue to hold Restricted Notes in the minimum authorized denomination of $2,000 principal amount. The Issuers will issue Exchange Notes in principal amounts identical to the
outstanding Restricted Notes surrendered in the exchange offers.
The form and terms of the Exchange Notes will be identical in all
material respects to the form and terms of the Restricted Notes except that the Exchange Notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional interest upon our
failure to fulfill our obligations under the Registration Rights Agreement to complete the exchange offers, or file, and cause to be effective, a shelf registration statement, if required thereby, within the specified time period. The Exchange Notes
will evidence the same debt as the Restricted Notes. The Exchange Notes will be issued under and entitled to the benefits of the same indenture that authorized the corresponding series of Restricted Notes. For a description of the indenture
governing the Exchange Notes, see Description of the Exchange Notes. The exchange offers are not conditioned upon any minimum aggregate principal amount of outstanding Restricted Notes being tendered for exchange.
As of the date of this prospectus, $1,250,000,000 aggregate principal amount of the 2022 Restricted Notes, $1,350,000,000 aggregate principal
amount of the 2027 Restricted Notes and $1,350,000,000 aggregate principal amount of the 2047 Restricted Notes were outstanding. This prospectus and the accompanying letter of transmittal are being sent to all registered holders of Restricted Notes.
There will be no fixed record date for determining registered holders of outstanding Restricted Notes entitled to participate in the exchange offers. The Issuers intend to conduct the exchange offers in accordance with the provisions of the
Registration Rights Agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Outstanding Restricted Notes that are not tendered for exchange in the exchange offers will remain
outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to such holders outstanding Restricted Notes and the Registration Rights Agreement except we will not
have any further obligation to you to provide for the registration of the outstanding Restricted Notes under the Registration Rights Agreement.
The Issuers will be deemed to have accepted for exchange properly tendered outstanding Restricted Notes when it has given oral or written
notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the Exchange Notes from us and delivering Exchange Notes to holders. Subject to the terms of the
Registration Rights Agreement, we expressly reserve the right to amend or terminate the exchange offers and to refuse to accept the occurrence of any of the conditions specified below under Conditions to the Exchange Offers.
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If you tender your outstanding Restricted Notes in the exchange offers, you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the accompanying letter of transmittal, transfer taxes with respect to the exchange of Restricted Notes. We will pay all charges and expenses, other than certain applicable
taxes, in connection with the exchange offers. It is important that you read the section Fees and Expenses below for more details regarding fees and expenses incurred in the exchange offers.
Expiration Date; Extensions; Termination; Amendments
The exchange offers expire at 12:00 midnight, New York City time, on
, 2018, unless we extend the applicable exchange offer, in which case the Expiration Date will be the latest date and time to which we extend such
exchange offer.
We expressly reserve the right, so long as applicable law allows:
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to delay our acceptance of Restricted Notes for exchange;
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to terminate the exchange offers if any of the conditions set forth under Conditions to the Exchange Offers exist;
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to waive any condition to the exchange offers;
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to amend any of the terms of the exchange offers; and
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to extend the Expiration Date and retain all Restricted Notes tendered in the exchange offers, subject to your right to withdraw your tendered Restricted Notes as described under Withdrawal of Tenders.
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Any waiver or amendment to the exchange offers will apply to all Restricted Notes tendered, regardless of when or in what
order the Restricted Notes were tendered. If the exchange offers are amended in a manner that we think constitutes a material change, or if we waive a material condition of the exchange offers, we will promptly disclose the amendment or waiver in a
manner reasonably calculated to inform the holders of Restricted Notes of the amendment or waiver, and we will extend the exchange offers to the extent required by Rule
14-e
under the Exchange Act.
We will promptly follow any delay in acceptance, termination, extension or amendment by oral or written notice of the event to the exchange
agent, followed promptly by oral or written notice to the registered holders. Should we choose to delay, extend, amend or terminate the exchange offers, we will have no obligation to publish, advertise or otherwise communicate this announcement,
other than by making a timely release to a financial news service.
In the event we terminate the exchange offers, all Restricted Notes
previously tendered and not accepted for payment will be returned promptly to the tendering holders.
In the event that the exchange
offers are withdrawn or otherwise not completed, Exchange Notes will not be given to holders of Restricted Notes who have validly tendered their Restricted Notes.
Acceptance of Restricted Notes for Exchange
In all cases, the Issuers will promptly issue Exchange Notes for outstanding Restricted Notes that it has accepted for exchange under the
exchange offers only after the exchange agent timely receives:
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outstanding Restricted Notes or a timely book-entry confirmation of such outstanding Restricted Notes into the exchange agents account at DTC; and
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a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agents message.
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By tendering outstanding Restricted Notes pursuant to the exchange offers, you will represent to
us that, among other things:
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you are not our affiliate within the meaning of Rule 405 of the Securities Act or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act, to the
extent applicable;
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you are not participating, and you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of
the Securities Act;
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if you are a broker-dealer, you have not entered into any arrangement or understanding with us or any of our affiliates to distribute the Exchange Notes;
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you are acquiring the Exchange Notes in the ordinary course of your business; and
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you are not acting on behalf of any person or entity that could not truthfully make these representations.
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In addition, each broker-dealer that is to receive Exchange Notes for its own account in exchange for outstanding Restricted Notes must
represent that such outstanding Restricted Notes were acquired by that broker-dealer as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus that meets the requirements of the
Securities Act in connection with any resale of the Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within
the meaning of the Securities Act. See Plan of Distribution.
The Issuers will interpret the terms and conditions of the
exchange offers, including the letter of transmittal and the instructions to the letter of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt, and acceptance of outstanding Restricted Notes
tendered for exchange. Our determinations in this regard will be final and binding on all parties. The Issuers reserve the absolute right to reject any and all tenders of any particular outstanding Restricted Notes not properly tendered or not to
accept any particular Restricted Notes if the acceptance might, in its or its counsels judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities as to any particular outstanding Restricted Notes prior to
the Expiration Date.
Unless waived, any defects or irregularities in connection with tenders of outstanding Restricted Notes for exchange
must be cured within such reasonable period of time as we determine. None of the Issuers, the exchange agent or any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding
Restricted Notes for exchange, nor will any of them incur any liability for any failure to give notification. Any outstanding Restricted Notes received by the exchange agent that are not properly tendered and as to which the irregularities have not
been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the Expiration Date.
Procedures for Tendering Restricted Notes
To tender your outstanding Restricted Notes in the exchange offers, you must comply with either of the following:
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complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature(s) on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver
such letter of transmittal or facsimile thereof to the exchange agent at the address set forth on the inside back cover of this prospectus prior to the Expiration Date; or
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comply with the procedures of the Automated Tender Offer Program of the DTC described below.
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In addition, either:
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the exchange agent must receive certificates for outstanding Restricted Notes along with the letter of transmittal prior to the Expiration Date; or
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the exchange agent must receive a timely confirmation of book-entry transfer of outstanding Restricted Notes into the exchange agents account at DTC according to the procedures for book-entry transfer described
below or a properly transmitted agents message prior to the Expiration Date.
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Your tender, if not withdrawn prior to
the Expiration Date, constitutes an agreement between us and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal.
If you wish to exchange your outstanding Restricted Notes for Exchange Notes in the exchange offers, you will be required to make the written
representations as set forth in this section and Acceptance of Restricted Notes for Exchange.
The method of delivery of
outstanding Restricted Notes, letters of transmittal and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured.
In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the Expiration Date. You should not send letters of transmittal or certificates representing outstanding Restricted Notes to us. You may request
that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you.
If you are a beneficial owner
whose outstanding Restricted Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding Restricted Notes, you should promptly contact your registered holder and
instruct the registered holder to tender on your behalf.
Signatures on the letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or
another eligible guarantor institution within the meaning of Rule
17A(d)-15
under the Exchange Act unless the outstanding Restricted Notes surrendered for exchange are tendered:
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by a registered holder of the outstanding Restricted Notes who has not completed the box entitled Special Registration Instructions or Special Delivery Instructions on the letter of transmittal;
or
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for the account of an eligible guarantor institution.
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If the letter of transmittal is signed
by a person other than the registered holder of any Restricted Notes listed on the outstanding Restricted Notes, such outstanding Restricted Notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by
the registered holder as the registered holders name appears on the outstanding Restricted Notes, and an eligible guarantor institution must guarantee the signature on the bond power.
If the letter of transmittal, any certificates representing outstanding Restricted Notes or bond powers are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should also indicate when signing and, unless waived by us, they should also submit evidence
satisfactory to us of their authority to so act.
The exchange agent and DTC have confirmed that any financial institution that is a
participant in DTCs system may use DTCs Automated Tender Offer Program to tender Restricted Notes. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange
agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the Restricted Notes to
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the exchange agent in accordance with DTCs Automated Tender Offer Program procedures for transfer. DTC will then send an agents message to the exchange agent. The term
agents message means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:
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DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding Restricted Notes that are the subject of the book-entry confirmation;
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the participant has received and agrees to be bound by the terms of the letter of transmittal; and
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we may enforce that agreement against such participant.
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Book-Entry Transfer
The exchange agent will seek to establish a new account or utilize an existing account with respect to the Restricted Notes at DTC
promptly after the date of this prospectus. Any financial institution that is a participant in the DTC system and whose name appears on a security position listing as the owner of the Restricted Notes may make book-entry delivery of Restricted Notes
by causing DTC to transfer such Restricted Notes into the exchange agents account. The confirmation of a book-entry transfer of Restricted Notes into the exchange agents account at DTC is referred to in this prospectus as a
book-entry confirmation. Delivery of documents to DTC in accordance with DTCs procedures does not constitute delivery to the exchange agent.
Other Matters
Exchange Notes will be issued in exchange for Restricted Notes accepted for exchange only after timely receipt by the exchange agent of:
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certificates for (or a timely book-entry confirmation with respect to) your Restricted Notes;
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a properly completed and duly executed letter of transmittal or facsimile thereof with any required signature guarantees, or, in the case of a book-entry transfer, an agents message; and
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any other documents required by the letter of transmittal.
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We will determine, in our sole
discretion, all questions as to the form of all documents, validity, eligibility, including time of receipt, and acceptance of all tenders of Restricted Notes. There will be no guaranteed delivery procedures for the exchange offers. Our
determination will be final and binding on all parties. Alternative, conditional or contingent tenders of Restricted Notes will not be considered valid.
We reserve the absolute right to reject any or all tenders of Restricted Notes that are not in proper form or the acceptance of which, in
our opinion, would be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular Restricted Notes.
Our interpretation of the terms and conditions of the exchange offers, including the instructions in the accompanying letter of transmittal,
will be final and binding.
Any defect or irregularity in connection with tenders of Restricted Notes must be cured within the time we
determine, unless waived by us. We will not consider the tender of Restricted Notes to have been validly made until all defects and irregularities have been waived by us or cured. None of the Issuers, the exchange agent or any other person will be
under any duty to give notice of any defects or irregularities in tenders of Restricted Notes, or will incur any liability to holders for failure to give any such notice.
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Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your tender of Restricted Notes at any time prior to the Expiration Date.
For a withdrawal to be effective:
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the exchange agent must receive a written notice of withdrawal at the address set forth on the inside of the back cover of this prospectus; or
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you must comply with the appropriate procedures of DTCs Automated Tender Offer Program system.
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Any notice of withdrawal must:
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specify the name of the person who tendered the Restricted Notes to be withdrawn;
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identify the Restricted Notes to be withdrawn, including the certificate numbers and principal amount of the Restricted Notes;
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be signed by the person who tendered the Restricted Notes in the same manner as the original signature on the letter of transmittal, including any required signature guarantees; and
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specify the name in which the Restricted Notes are to be re-registered, if different from that of the withdrawing holder.
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If Restricted Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must
specify the name and number of the account at DTC to be credited with the withdrawn Restricted Notes and otherwise comply with the procedures of DTC.
We will determine in our sole discretion all questions as to validity, form, eligibility and time of receipt of any withdrawal notices. Our
determination will be final and binding on all parties. We will deem any Restricted Notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offers.
Any Restricted Notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without
cost to the holder or, in the case of Restricted Notes tendered by book-entry transfer into the exchange agents account at DTC according to the procedures described above, such Restricted Notes will be credited to an account maintained with
DTC for the Restricted Notes. This return or crediting will take place promptly after withdrawal, rejection of tender or termination of the exchange offers. You may retender properly withdrawn Restricted Notes by following one of the procedures
described under Procedures for Tendering Restricted Notes at any time on or prior to the Expiration Date.
Conditions to the Exchange
Offers
Despite any other term of the exchange offers, the Issuers will not be required to accept for exchange, or to issue Exchange
Notes in exchange for, any outstanding Restricted Notes and it may terminate or amend the exchange offers as provided in this prospectus prior to the Expiration Date if in its reasonable judgment:
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the exchange offers or the making of any exchange by a holder violates any applicable law or interpretation of the SEC;
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any action or proceeding has been instituted or threatened in writing in any court or by or before any governmental agency with respect to the exchange offers that, in our judgment, would reasonably be expected to
impair our ability to proceed with the exchange offers; or
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any law, rule or regulation or applicable interpretations of the staff of the SEC have been issued or promulgated, which, in our good faith determination, does not permit us to effect either exchange offers.
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In addition, the Issuers will not be obligated to accept for exchange the outstanding Restricted
Notes of any holder that has not made to us:
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the representations described under Procedures for Tendering Restricted Notes and Acceptance of Restricted Notes for Exchange; or
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any other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the Exchange Notes under the Securities
Act.
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The Issuers expressly reserve the right at any time or at various times to extend the period of time during which the
exchange offers are open. Consequently, the Issuers may delay acceptance of any Restricted Notes by giving oral or written notice of such extension to their holders. The Issuers will return any outstanding Restricted Notes that it does not accept
for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offers.
The Issuers expressly reserve the right to amend or terminate the exchange offers and to reject for exchange any outstanding Restricted Notes
not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offers specified above. The Issuers will give oral or written notice of any extension, amendment, non-acceptance or termination of the exchange offers
to the holders of the outstanding Restricted Notes as promptly as practicable. In the case of any extension of the exchange offers, such notice will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
These conditions are for our sole benefit, and the Issuers may assert them regardless of the circumstances
that may give rise to them or waive them in whole or in part at any or at various times prior to the Expiration Date in our sole discretion. If the Issuers fail at any time to exercise any of the foregoing rights, this failure will not constitute a
waiver of such right. Each such right will be deemed an ongoing right that it may assert at any time or at various times prior to the Expiration Date.
In addition, the Issuers will not accept for exchange any outstanding Restricted Notes tendered, and will not issue Exchange Notes in exchange
for any such outstanding Restricted Notes, if at such time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture governing the Exchange
Notes under the Trust Indenture Act of 1939, as amended.
Consequences of Failing to Exchange
If you do not exchange your Restricted Notes for Exchange Notes in the exchange offers, you will remain subject to the restrictions on transfer
of the Restricted Notes:
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as set forth in the legend printed on the Restricted Notes as a consequence of the issuance of the Restricted Notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of
the Securities Act and applicable state securities laws; and
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otherwise set forth in the offering memorandum distributed in connection with the private offerings of the Restricted Notes.
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In general, you may not offer or sell the Restricted Notes unless they are registered under the Securities Act, or if the offer or sale is
exempt from registration under the Securities Act and applicable state securities laws. Upon completion of the exchange offers, we are under no obligation to, and do not intend to, register resales of the outstanding Restricted Notes under the
Securities Act.
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Accounting Treatment
The Exchange Notes will be recorded at the same carrying value as the outstanding Restricted Notes, as reflected in our accounting records on
the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offers, other than the recognition of the fees and expenses of the offering as stated under Fees and
Expenses. The expenses of the exchange offers and the unamortized expenses related to the issuance of the Restricted Notes will be amortized over the term of the Exchange Notes.
Exchange Agent
The Bank of New York
Mellon Trust Company, N.A. has been appointed as exchange agent for the exchange offers. All correspondence in connection with the exchange offers should be sent or delivered by each holder of Restricted Notes, or a beneficial owners
commercial bank, broker, dealer, trust company or other nominee, to the exchange agent at the address and telephone number set forth on the back cover of this prospectus.
Questions concerning tender procedures and requests for additional copies of this prospectus should be directed to the exchange agent at the
address and telephone numbers listed below. Holders of Restricted Notes may also contact their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the exchange offers.
We will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable
out-of-pocket
expenses.
The address for The Bank of New York
Mellon Trust N.A., as exchange agent, is:
By Mail or in Person
The Bank of New York Mellon Trust Company, N.A.
Processor: Adam DeCapio
By
Facsimile:
732-667-9408
Confirm by telephone
:
315-414-3360
By Mail, Hand or Courier
:
The Bank of New York Mellon Trust Company, N.A., as Exchange Agent
c/o The Bank of New York Mellon Corporation
Corporate Trust OperationsReorganization Unit 111 Sanders Creek Parkway
East Syracuse, NY 13057 Attn: Adam DeCapio
Questions and requests for assistance related to the exchange offers or for additional copies of this prospectus may be directed to the
exchange agent at the telephone number and address listed above.
TRANSMISSION OF INSTRUCTIONS TO AN ADDRESS OR FACSIMILE NUMBER OTHER
THAN THAT OF THE EXCHANGE AGENT AS SET FORTH ON THE BACK COVER OF THIS PROSPECTUS DOES NOT CONSTITUTE VALID DELIVERY.
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Resale of Exchange Notes
Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that you may resell or otherwise
transfer Exchange Notes issued in the exchange offers without complying with the registration and prospectus delivery provisions of the Securities Act, if:
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you are not our affiliate within the meaning of Rule 405 of the Securities Act;
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you are not participating, and you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of
the Securities Act;
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if you are a broker dealer, you have not entered into any arrangement or understanding with us or any of our affiliates to distribute the Exchange Notes; and
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you are acquiring the Exchange Notes in the ordinary course of your business.
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If you are our
affiliate, or are engaging in, or intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the Exchange Notes, or are not acquiring the Exchange Notes in the ordinary course of your business:
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You cannot rely on the position of the SEC set forth in
Morgan Stanley
& Co. Incorporated
(available June 5, 1991) and
Exxon Capital Holdings Corporation
(available May 13,
1988), as interpreted in the SECs letter to Shearman & Sterling, dated July 2, 1993, and similar
no-action
letters; and
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in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale
transaction of the Exchange Notes, in which case the registration statement must contain the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation
S-K
of the SEC.
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This prospectus may be used for an offer to resell, resale or other transfer of Exchange Notes only as specifically set
forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding Restricted Notes as a result of market-making activities or other trading activities may participate in the exchange offers. Each broker or
dealer that receives Exchange Notes for its own account in exchange for Restricted Notes that were acquired as a result of market-making or other trading activities must acknowledge that it will comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any offer, resale, or other transfer of the Exchange Notes issued in the exchange offers, including information with respect to any selling holder required by the Securities Act in connection
with any resale of the Exchange Notes. Please read Plan of Distribution for more details regarding the transfer of Exchange Notes.
Fees
and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make
additional solicitation by
e-mail,
telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer manager in connection with the exchange offers and will not make any payments to broker-dealers or others
soliciting acceptances of the exchange offers. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable
out-of-pocket
expenses.
We will pay the cash expenses to
be incurred in connection with the exchange offers. They include:
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Commission registration fees;
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fees and expenses of the exchange agent and trustee;
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accounting and legal fees and printing costs; and
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related fees and expenses.
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Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of outstanding Restricted Notes under the exchange offers. Each tendering
holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if a transfer tax is imposed for any reason other than the exchange of outstanding Restricted Notes under the exchange offers.
Other
Participation in the exchange
offers is voluntary, and you should consider carefully whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered outstanding Restricted Notes in open market or privately negotiated transactions, through
subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding Restricted Notes that are not tendered in the exchange offers or to file a registration statement to permit resales of any untendered outstanding Restricted
Notes.
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DESCRIPTION OF EXCHANGE NOTES
Our predecessor, Baker Hughes Incorporated, a Delaware corporation (BHI), entered into an indenture, dated as of October 28,
2008 (the Original Indenture), between BHI and The Bank of New York Mellon Trust Company, N.A., as trustee (herein called the Trustee). In connection with the combination of BHI and GE O&G, BHI converted into a Delaware
limited liability company and changed its name to Baker Hughes, a GE company, LLC, and succeeded to the obligations of BHI under the indenture. In addition, on July 3, 2017, Baker Hughes, a GE company, LLC; Baker Hughes
Co-Obligor,
Inc., a Delaware corporation and a wholly owned subsidiary of Baker Hughes, a GE company, LLC; and the Trustee entered into the Second Supplemental Indenture pursuant to which Baker Hughes, a GE company,
LLC and Baker Hughes
Co-Obligor,
Inc. agreed to be jointly and severally liable with respect to the obligations of the Company under the indenture. We refer to the Original Indenture, as previously
supplemented by the Second Supplemental Indenture, as the Base Indenture.
The 2022 Exchange Notes, the 2027 Exchange Notes
and the 2047 Exchange Notes will be issued as separate series of senior debt securities under the Base Indenture, as supplemented by the Third Supplemental Indenture, dated as of December 11, 2017 (the Third Supplemental Indenture),
by and among BHGE LLC,
Co-Obligor
and the Trustee, which will establish the terms of each series of Exchange Notes. We refer to the Base Indenture, as so supplemented, as the Indenture. The terms
of the Exchange Notes to be issued in the exchange offers are substantially identical to the Restricted Notes of the same series, except that the transfer restrictions, registration rights and additional interest provision relating to such series of
Restricted Notes will not apply to the corresponding series of Exchange Notes. In this section, the notes refers to the each series of Exchange Notes offered by this prospectus, any Restricted Notes of such series that are outstanding
after the exchange offers are completed and any additional notes of such series. The terms of the notes will be those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act.
As used in this description of the Exchange Notes, (i) the terms Company, we, us and our
refer solely to Baker Hughes, a GE company, LLC and not to any of its subsidiaries or affiliates, (ii) the term
Co-Obligor
refers to Baker Hughes
Co-Obligor,
Inc. and (iii) the term Issuers refers collectively to the Company and the
Co-Obligor.
The following is a summary of the material provisions of the notes and the Indenture and is qualified in its entirety by the provisions of the
Indenture and the notes, including definitions of terms used therein. Because this description is only a summary, you should refer to the Base Indenture and the Third Supplemental Indenture, which are included or incorporated by reference as
exhibits to this registration statement, for a complete description of our obligations and your rights.
Certain terms used but not
defined herein shall have the meanings given to them in the Indenture or the notes, as the case may be.
General
The 2022 notes will mature on December 15, 2022, the 2027 notes will mature on December 15, 2027, and the 2047 notes will mature on
December 15, 2047 and will constitute part of the senior debt of each of the Issuers. The Indenture and the notes do not limit the Issuers ability to incur other indebtedness or to issue other securities. Also, other than to the limited extent
set forth below, the Issuers are not subject to financial or similar restrictions by the terms of the notes.
The notes will be issued
under the Indenture. The Indenture provides for the issuance by the Company from time to time of one or more series of debt securities with varying maturities and other terms. Each of the 2022 notes, the 2027 notes and the 2047 notes will be a
separate series for the purposes of the Indenture. As of September 30, 2017, there were three other series of debt securities outstanding under the Indenture aggregating $2.18 billion in principal amount. The
Co-Obligor
is jointly and severally liable, as a primary obligor and not as a
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guarantor or surety, with respect to all payment obligations on the notes, including the due and punctual payment of principal (and premium, if any) and interest on the notes and all other
obligations of the Company under the Indenture.
We may, without the consent of the holders of any series of the notes, issue additional
notes having the same ranking and the same interest rate, maturity and other terms as the notes of such series, except for the issue date, public offering price and, in certain cases, interest accrual date. Such additional notes will include the
exchange notes for such series of notes referred to below under Exchange and Registration Rights. Any additional notes having such similar terms, including exchange notes, together with the previously issued notes of such
series, will constitute a single series of notes under the Indenture. If we issue any additional notes, the Rule 144 holding period will be automatically extended.
The notes will be issued in fully registered form without coupons, in denominations of $2,000 and any integral multiples of $1,000 in excess
of $2,000. Each of the 2022 notes, the 2027 notes and the 2047 notes will be initially issued only in book-entry form and represented by one or more global securities registered in the name of a nominee of The Depository Trust Company
(DTC), which will be the holder of all the notes represented by any global security. Those who own beneficial interests in a global security will do so through participants in the DTCs securities clearance system, and the rights of
these indirect owners will be governed solely by the applicable procedures of DTC and its participants. References to holders in this section mean those who own notes registered in their own names, on the books that we or the Trustee
maintains for this purpose, and not those who own beneficial interests in notes registered in street name or in notes issued in book-entry form through DTC. See Book-Entry System.
Ranking
The notes will rank equally in
right of payment with all other unsubordinated indebtedness of each of the Issuers. The notes will not be secured by any of the Issuers properties or assets. Our subsidiaries are separate and distinct legal entities and holders of the notes
will not have any claim on our subsidiaries other than the
Co-Obligor.
Our right to receive any assets of any of our subsidiaries upon the insolvency, liquidation or reorganization of any of our subsidiaries,
and therefore the right of the holders of the notes to participate in those assets, will be structurally subordinated to the claims of that subsidiarys creditors. The
Co-Obligor
conducts no business and
has no operations other than as necessary to serve as
co-obligor
in respect of debt securities of the Company.
As of September 30, 2017, after giving effect to the issuance of Restricted Notes and the use of proceeds thereof (based on the Use of
Proceeds Assumptions (as defined in note 3 in Ratio of Earnings to Fixed Charges included in this prospectus)), we would have had $6,249 million of total long-term unsecured indebtedness, $215 million of which would be
indebtedness of our subsidiaries other than the
Co-Obligor
(representing primarily the remaining carrying value of the 8.55% debentures due 2024 after final settlement of the Maximum Tender Offers and our
capital leases), excluding intercompany indebtedness.
Sinking Fund
There is no provision for a sinking fund for the notes.
Payments on the Notes; Paying Agent
So
long as the notes are in global form, principal of and premium, if any, and interest on the notes will be payable through DTC in accordance with the applicable policies of DTC as in effect from time to time.
Under those policies, we will pay directly to DTC, or its nominee, and not to any indirect owner who owns beneficial interests in the global
security. An indirect owners right to receive those payments will be governed
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by the rules and practices of DTC and its participants. Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive payments on their
notes.
If any certificated notes are issued in the future, payment on such notes may be made, and the transfer of such notes will be
registrable, at the corporate trust office of The Bank of New York Mellon in New York City; provided, however, that payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the
notes register and all other payments will be made by check against surrender of notes. All payments by check will be made in
next-day
funds i.e., funds that become available on the day after the check
is cashed.
We may add, replace or terminate paying agents from time to time. We may also choose to act as our own paying agent. We must
notify the Trustee of changes in the paying agents. Regardless of who acts as paying agent, all money paid by us to a paying agent that remains unclaimed at the end of two years after the amount is due to a holder will be repaid to us. After that
two-year
period, the holder may look only to us for payment and not to the Trustee, any other paying agent or anyone else.
Interest
The 2022 notes will bear
interest from December 11, 2017 at the annual rate of 2.773%, the 2027 notes will bear interest from December 11, 2017 at the annual rate of 3.337%, and the 2047 notes will bear interest from December 11, 2017 at the annual rate of
4.080%. Additional interest may also accrue on the notes in the circumstances described under Exchange and Registration Rights, and all references to interest in this description include any such additional interest. Interest
on the notes will be payable semiannually on June 15 and December 15, commencing June 15, 2018 to the person in whose name such note is registered at the close of business on the immediately preceding
June 1 and December 1 (whether or not a Business Day).
Interest payable at the maturity of the notes will be payable to the
Person in whose name the note is registered at the close of business on the Regular Record Date for such interest. Interest will be computed on the basis of a
360-day
year of twelve
30-day
months.
If any interest payment date falls on a day that is not a Business Day, the interest
payment will be made on the next day that is a Business Day with the same force and effect as if made on such interest payment date, and no interest on such payment will accrue for the period from and after such interest payment date. If the
maturity date of any series of notes falls on a day that is not a Business Day, the payment of interest, premium, if any, and principal may be made on the next succeeding Business Day, and no interest on such payment will accrue for the period from
and after the maturity date.
Interest payments for the notes will include accrued interest from and including the date of issue or from
and including the last date in respect of which interest has been paid, as the case may be, to but excluding the interest payment date or the date of maturity, as the case may be.
Business Day
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in
New York City are authorized or obligated by law or executive order to close.
Optional Redemption
The 2022 notes will be redeemable as a whole at any time or in part from time to time, at the option of the Company, at a redemption price
equal to:
(x) if the redemption date is prior to November 15, 2022 (the date one month prior to the stated maturity
of the notes (the 2022 Par Call Date)), the greater of (i) 100% of the principal amount of the notes or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon that would be due if
such 2022 notes matured on the 2022 Par Call Date from the redemption date to
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the 2022 Par Call Date (exclusive of any accrued interest) discounted to the redemption date on a semiannual basis (assuming a
360-day
year consisting of
twelve
30-day
months) at the Treasury Rate plus 10 basis points; or
(y) if the
redemption date is on or after the 2022 Par Call Date, 100% of the principal amount of notes,
plus, in each case, any interest accrued but not paid to the
date of redemption (subject to the right of holders on the relevant record date to receive interest due on the relevant interest payment date).
The 2027 notes will be redeemable as a whole at any time or in part from time to time, at the option of the Company, at a redemption price
equal to:
(x) if the redemption date is prior to September 15, 2027 (the date three months prior to the stated
maturity of the notes (the 2027 Par Call Date)), the greater of (i) 100% of the principal amount of the notes or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon that would be
due if such 2027 notes matured on the 2027 Par Call Date from the redemption date to the 2027 Par Call Date (exclusive of any accrued interest) discounted to the redemption date on a semiannual basis (assuming a
360-day
year consisting of twelve
30-day
months) at the Treasury Rate plus 15 basis points; or
(y) if the redemption date is on or after the 2027 Par Call Date, 100% of the principal amount of notes,
plus, in each case, any interest accrued but not paid to the date of redemption (subject to the right of holders on the relevant record date to receive
interest due on the relevant interest payment date)
The 2047 notes will be redeemable as a whole at any time or in part from time to
time, at the option of the Company, at a redemption price equal to:
(x) if the redemption date is prior to June 15,
2047 (the date six months prior to the stated maturity of the notes (the 2047 Par Call Date and together with the 2022 Par Call Date and the 2027 Par Call Date, each a Par Call Date)), the greater of (i) 100% of the principal
amount of the notes or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon that would be due if such 2047 notes matured on the 2047 Par Call Date from the redemption date to the 2047 Par Call
Date (exclusive of any accrued interest) discounted to the redemption date on a semiannual basis (assuming a
360-day
year consisting of twelve
30-day
months) at the
Treasury Rate plus 20 basis points; or
(y) if the redemption date is on or after the 2047 Par Call Date, 100% of the
principal amount of notes,
plus, in each case, any interest accrued but not paid to the date of redemption (subject to the right of holders on the
relevant record date to receive interest due on the relevant interest payment date).
Treasury Rate
means, with
respect to any redemption date for a series of notes, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated H.15 or
any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the maturity date for the applicable series of notes, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if that
release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. The Treasury Rate shall be calculated on the third Business Day preceding the
redemption date.
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Comparable Treasury Issue
means, with respect to the applicable series of
notes, the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of such notes to be redeemed (assuming, for this purpose, that such notes matured on the applicable Par
Call Date) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.
Independent Investment Banker
means one of the Reference Treasury Dealers appointed by the Trustee after consultation with
the Company.
Comparable Treasury Price
means with respect to any redemption date for the notes (i) the average of
four Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.
Reference Treasury Dealer
means each of Morgan Stanley & Co. LLC,
Barclays Capital Inc., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States (a Primary Treasury
Dealer), the Company shall substitute therefor another Primary Treasury Dealer.
Reference Treasury Dealer
Quotations
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding that redemption date.
The Company will appoint a calculation agent to calculate the present value, if applicable, in the case of a redemption as described above.
Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the
notes or portions thereof called for redemption.
If less than all of the notes are to be redeemed at any time, the Trustee will select
notes for redemption on a pro rata basis. No notes of $2,000 or less can be redeemed in part. Notices of redemption will be delivered at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its
registered address, except that notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a covenant defeasance or legal defeasance with respect to the notes or a satisfaction and discharge of the
Indenture with respect to the notes. A notice of redemption need not set forth the exact redemption price but only the manner of calculation thereof.
The Company is not prohibited from acquiring the notes by means other than a redemption, whether pursuant to a tender offer, open market
purchase or otherwise. Notes that we purchase may not be resold.
Restrictions on Transfer
The notes will be subject to restrictions on transfer and will bear a restrictive legend substantially as described in Book-Entry
System and Transfer Restrictions.
Certain Covenants
Except for the limitations on secured debt and Sale and Leaseback Transactions described below, the Indenture and notes do not contain any
covenants or other provisions designed to afford holders of the notes protection in the event of a highly leveraged transaction involving us.
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Restriction on Liens.
So long as any of the notes remain outstanding, the Company will
not, and will not permit any Restricted Subsidiary (as defined below in Definitions of Certain Terms) to, issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed
(debt) if that debt is secured by a mortgage on any Principal Property (as defined), or on any shares of stock or indebtedness of any Restricted Subsidiary (whether the Principal Property, shares of stock or indebtedness is now owned or
hereafter acquired), without in any such case effectively providing that the notes shall be secured equally and ratably with or prior to such debt until such time as such debt is no longer so secured by such mortgage. This restriction, however,
shall not apply to:
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mortgages on property of any corporation or other Person existing at the time such corporation or other Person becomes a Restricted Subsidiary;
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mortgages on property of a corporation or other Person existing at the time that corporation or other Person is merged into or consolidated with the Company or a Restricted Subsidiary or at the time of a sale, transfer,
conveyance or the disposition of all or substantially all of the properties or assets of that corporation or other Person to the Company or a Restricted Subsidiary;
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mortgages on any property the Company or any Restricted Subsidiary acquires, constructs, develops, expands or improves that secure debt issued, assumed or guaranteed (or issued, assumed or guaranteed pursuant to a
commitment entered into) prior to, at the time of or within 12 months after the acquisition or completion of construction, development, expansion or improvement of the property (or, in the case of property constructed, developed, expanded or
improved, if later, the commencement of commercial operation of the property) for the purpose of financing all or any part of the purchase price of the property or the cost of the construction or improvement (together with, in the case of
construction, development, expansion or improvement, mortgages on property previously owned by the Company or any Restricted Subsidiary to the extent constituting unimproved real property on which the property being constructed, developed or
expanded or the improvement is located);
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mortgages securing debt owing by the Company or any Restricted Subsidiary to the Company or another Restricted Subsidiary;
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mortgages on property of the Company or a Restricted Subsidiary in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States
of America or any State thereof, or in favor of any other country, or any political subdivision thereof, to secure any debt incurred for the purpose of financing all or any part of the purchase price or the cost of construction, development,
expansion or improvement of the property subject to such mortgages or to secure partial, progress, advance or other payments pursuant to the provisions of any contracts, statute, law, rule or regulation;
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mortgages incurred in connection with pollution control, industrial revenue or similar financings;
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mortgages incurred or deposits made (including mortgages and deposits securing letters of credit or similar financial assurance) to secure the performance of or in connection with bids, tenders, statutory, governmental
or private contractual or other obligations, surety, performance, completion, appeal or similar bonds, leases,
return-of-money
bonds and other obligations similar to any
of the foregoing, in each case in the ordinary course of business;
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mortgages arising by operation of law, including but not limited to mortgages for taxes, assessments or similar charges that are not yet due or the validity of which is being contested in good faith by appropriate
proceedings;
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mortgages existing at the date of the original issuance of the notes;
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mortgages on inventory to secure current liabilities of debt; and
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any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of
any mortgage referred to in the clauses immediately above if the amount of debt secured by
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the extended, renewed or replacement mortgage does not exceed the amount of the debt refinanced (plus accrued interest and premiums with respect thereto) plus transaction expenses related thereto
and such mortgage is limited to the property secured by the original mortgage plus improvements thereon.
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There is an
additional exception as described below under 10% Basket Amount.
Restriction on Sale and Leaseback Transactions.
So
long as any of the notes remain outstanding, the Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction (as defined below) of any Principal Property unless (a) the Company or such
Restricted Subsidiary would be entitled to issue, assume or guarantee debt secured by a mortgage upon the Principal Property involved in an amount at least equal to the Attributable Debt (as defined below) for that transaction without equally and
ratably securing the notes, (b) an amount in cash equal to the Attributable Debt for that transaction is applied prior to, at the time of or within 12 months after that transaction to the retirement of notes or other debt of the Company or debt
of a Restricted Subsidiary, which by its terms matures at or is extendible or renewable at the option of the obligor to a date more than 12 months after its creation and, which in the case of such debt of the Company, is not subordinate in right of
payment to the notes or (c) prior to, at the time of or within 12 months after such transaction, the Company or a Restricted Subsidiary uses an amount equal to the Attributable Debt for the purchase of any asset or any interest in an asset
which would qualify, after purchase, as a Principal Property.
This covenant does not apply to any Sales and Leaseback Transaction
(i) entered into in connection with an industrial revenue, pollution control or similar financing or any Sale and Leaseback Transaction or (ii) in which the only parties involved are the Company and any Subsidiary or Subsidiaries. When
calculating the amount of Attributable Debt, we will exclude any Attributable Debt for these Sale and Leaseback Transactions.
There is an
additional exception as described below under 10% Basket Amount.
10% Basket Amount.
In addition to the exceptions
described above under Restriction on Liens and Restriction on Sale and Leaseback Transactions, the Indenture allows additional debt secured by mortgages and additional Sale and Leaseback Transactions otherwise prohibited by
(and not permitted under the exceptions to) the covenants described above under such sections as long as the total of such debt secured by mortgages plus the Attributable Debt in respect of such Sale and Leaseback Transactions does not exceed 10% of
Consolidated Net Worth (as defined below).
Definitions of Certain Terms.
For purposes of the foregoing covenants, the following
definitions are applicable:
Attributable Debt
means, with respect to any Sale and Leaseback Transaction, as of
the time of determination, the total obligation, discounted to present value at the annual rate equal to the discount rate which would be applicable to a capital lease obligation with a similar term in accordance with generally accepted accounting
principles, of a lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, water rates and other items which do not constitute payments for property rights) during the remaining
portion of the initial term of the lease with respect to such Sale and Leaseback Transaction.
Consolidated Net Worth
means the amount of total equity shown in the Companys most recent quarterly statement of financial position.
Principal
Property
means any real property, manufacturing plant, warehouse, office building or other physical facility, or any item of marine, transportation or construction equipment or other like depreciable assets of the Company or of any
Restricted Subsidiary, whether now owned or hereafter acquired, unless, in the opinion of our Board of Directors, such plant or facility or other asset is not of material importance to the total business conducted by the Company and its Restricted
Subsidiaries taken as a whole.
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Restricted Subsidiary
means:
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any Subsidiary of the Company that owns, indirectly through ownership of another Subsidiary of the Company, a Principal Property located in the United States or Canada; or
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the
Co-Obligor
and any other Subsidiary of the Company that the Company designates as a Restricted Subsidiary.
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Sale and Leaseback Transaction
means any arrangement with any Person under which the Company or any Restricted Subsidiary
leases for a term of more than three years any Principal Property that the Company or any Restricted Subsidiary has sold or transferred or will sell or transfer to that Person. This term excludes leases of any Principal Property the Company or any
Restricted Subsidiary acquires or places in service within 180 days prior to the arrangement.
Subsidiary
means
any Person a majority of the combined voting power of the total outstanding ownership interests in which is, at the time of determination, beneficially owned or held, directly or indirectly, by the Company or one or more other Subsidiaries. For this
purpose voting power means power to vote in an ordinary election of directors (or, in the case of a Person that is not a corporation, ordinarily to appoint or approve the appointment of Persons holding similar positions), whether at all
times or only as long as no senior class of ownership interests has such voting power by reason of any contingency.
Mergers,
Consolidations and Sale of Assets.
So long as the notes remain outstanding, the Company will not consolidate with or merge into any other corporation or other entity or sell, convey, transfer or lease all or substantially all of its properties
and assets to another corporation or other entity, unless:
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either: (a) the Company is the surviving entity; or (b) the entity formed by or surviving any such consolidation or merger or to which such sale, transfer, conveyance or lease has been made is a corporation,
limited liability company, partnership or trust organized under the laws of the United States, any state thereof or the District of Columbia;
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the entity formed by or surviving any such consolidation or merger (if other than the Company) or the entity to which such sale, transfer, conveyance or lease has been made expressly assumes all of the obligations of
the Company under the Indenture and the notes governed thereby pursuant to agreements reasonably satisfactory to the Trustee;
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the Company or the successor will not immediately be in default under the Indenture; and
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the Company delivers an officers certificate and opinion of counsel to the Trustee stating that such consolidation, merger, sale, conveyance, transfer or lease complies with the Indenture and that all conditions
precedent set forth in the Indenture have been complied with.
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If the conditions described above are satisfied with respect
to the notes, we will not need to obtain the approval of the holders of the notes in order to merge or consolidate or to sell our assets. Also, these conditions will apply only if the Company wishes to merge or consolidate with another entity or
sell all or substantially all of its assets to another entity. The Company will not need to satisfy these conditions if the Company or its subsidiaries enter into other types of transactions, including any transaction in which the Company or its
subsidiaries acquire the stock or assets of another entity, any transaction that involves a change of control of the Company but in which the Company does not merge or consolidate and any transaction in which the Company sells less than
substantially all its assets. If the conditions described above are satisfied with respect to the notes, each of the Company and the
Co-Issuer
will be released from all its liabilities and obligations under
the notes and the Indenture with respect to the notes, except in the case of a lease.
SEC Reports; Financial Information.
So long
as any notes remain outstanding, the Company will file with the Trustee copies, within 15 days after the Company has filed the same with the SEC, of the annual reports and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC
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may from time to time by rules and regulations prescribe) which the Company may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act. The Company
will also comply with Section 314(a) of the Trust Indenture Act. Any document or report that we have filed with the SEC and that is publicly accessible on the SECs EDGAR system will be deemed filed with the Trustee for purposes of this
provision.
At any time when the Company is not subject to Section 13 or Section 15(d) of the Exchange Act, so long as any notes
remain restricted securities within the meaning of Rule 144(a)(3) of the Securities Act, upon the request of a holder of notes, the Company will promptly furnish or cause to be furnished the information specified under Rule 144A(d)(4) of
the Securities Act to such holder.
Modifications and Waivers
There are three types of changes we can make to the Indenture and the notes.
First, there are changes that cannot be made without the approval of each holder of a note affected by the change, including, among others:
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changing the stated maturity for any principal or interest payment on any note;
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reducing the principal amount, the amount payable on acceleration of the maturity after a default, the interest rate or the redemption price for any note;
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changing the currency of any payment on any note;
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changing the place of payment on any note;
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impairing a holders right to sue for payment of any amount due on its note;
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reducing the percentage in principal amount of the notes of any series, taken separately or together with any other affected series of debt securities, as applicable, the approval of the holders of which is needed to
change the Indenture or the notes of such series waive our compliance with the Indenture or to waive defaults; and
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changing the provisions of the Indenture dealing with modification and waiver in any other respect, except to increase any required percentage referred to above or to add to the provisions that cannot be changed or
waived without approval of the holder of each affected note.
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The second type of change does not require any approval by
holders of the notes of any series. These changes are limited to clarifications and changes that would not adversely affect the notes of such series in any material respect. Nor do we need any approval to make changes that affect only a series of
debt securities to be issued after the changes take effect. We may also make changes to provide for the issuance of additional notes, including exchange notes, in accordance with the Indenture. We may also make changes or obtain waivers that do not
adversely affect the notes of a particular series, even if they affect other series of debt securities. In those cases, we do not need to obtain the approval of the holders of any notes of such series; we need only obtain any required approvals from
the holders of the affected series of debt securities.
Any other change to the Indenture and the notes would require the following
approval:
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If the change affects only a particular series of notes, it must be approved by the holders of a majority in principal amount of such series of notes.
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If the change affects the notes of a particular series and any other series of debt securities, it must be approved by the holders of a majority in principal amount of all series affected by the change, with the debt
securities of all the affected series, including such series of notes, voting together as one class for this purpose (and of any affected series that by its terms is entitled to vote separately as a series).
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The same majority approval would be required for us to obtain a waiver of any of our covenants in
the Indenture. Our covenants include the agreements we make about merging or selling substantially all of our assets, which we describe above under Certain Covenants Mergers, Consolidations and Sale of Assets. If the
holders approve a waiver of a covenant, we will not have to comply with such covenant. The holders, however, cannot approve a waiver of any provision in a series of notes, or in the Indenture as it affects such series of notes, that we cannot change
without the approval of the holders of such series of notes as described above, unless the holders approve the waiver.
Book-entry and
other indirect owners should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the Indenture or the notes or request a waiver.
Only holders of outstanding notes will be eligible to take any action under the Indenture, such as giving a notice of default, declaring an
acceleration, approving any change or waiver or giving the Trustee an instruction with respect to the notes of the applicable series. Also, we will count only outstanding notes in determining whether the various percentage requirements for taking
action have been met. Any notes owned by us or any of our affiliates or surrendered for cancellation or for payment or redemption of which money has been set aside in trust are not deemed to be outstanding.
We will generally be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take action
under the Indenture. In certain limited circumstances, only the Trustee will be entitled to set a record date for action by holders. If we or the Trustee sets a record date for an approval or other action to be taken by holders, that vote or action
may be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for this purpose, or that the Trustee specifies if it sets the record date. We or the Trustee, as applicable, may shorten
or lengthen this period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In addition, record dates for any notes represented by global securities may be set in accordance with
procedures established by the depository from time to time. Accordingly, record dates for notes represented by global securities may differ from those for other notes.
Default, Remedies and Waiver of Default
You will have special rights if an event of default with respect to the notes occurs and is continuing, as described in this subsection.
Events of Default
An event of default means any of the following with respect to each series of notes:
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the Issuers do not pay the principal or any premium on such series of notes on the due date;
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the Issuers do not pay interest on such series of notes within 30 days after the due date;
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we remain in breach of our covenants regarding secured debt, sales and leasebacks or mergers or sales of substantially all of our assets or any other covenant we make in the Indenture for the benefit of the holders of
the notes (other than a covenant that has been included in the Indenture solely for the benefit of another series of debt securities that does not constitute a part of such series of notes), for 90 days after we receive a notice of default stating
that we are in breach and requiring us to remedy the breach. The notice must be sent by the Trustee or the holders of at least 25% in principal amount of the notes of the applicable series; or
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we file for bankruptcy or other events of bankruptcy, insolvency or reorganization relating to the Company occur.
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Remedies if an Event of Default Occurs
If an event of default has occurred with respect to any series of notes and has not been cured or waived, the Trustee or the holders of not
less than 25% in principal amount of the outstanding of such series of notes may declare the entire principal amount of such notes to be due immediately. If the event of default occurs because of events of bankruptcy, insolvency or reorganization
relating to the Company, the entire principal amount of the notes of such series will be automatically accelerated, without any action by the Trustee or any holder.
Each of the situations described above is called an acceleration of the stated maturity of the applicable series of notes. If the stated
maturity of a series of notes is accelerated and a judgment for payment has not yet been obtained, the holders of a majority in principal amount of such series of notes may cancel the acceleration for the entire series.
The Indenture governing the notes does not contain a
so-called
cross-acceleration event of
default with respect to the Issuers other debt, and the absence of such an event of default in the Indenture could disadvantage holders of the outstanding notes by preventing the Trustee from pursuing remedies under the Indenture at a time
when the Issuers other creditors may be exercising remedies under such other debt.
If an event of default occurs, the Trustee will
have special duties. In that situation, the Trustee will be obligated to use those of its rights and powers under the Indenture, and to use the same degree of care and skill in doing so, that a prudent person would use in that situation in
conducting his or her own affairs.
Except as described in the prior paragraph, the Trustee is not required to take any action under the
Indenture at the request of any holders unless the holders offer the Trustee reasonable protection from expenses and liability. This is called an indemnity. If the Trustee is provided with an indemnity reasonably satisfactory to it, the holders of a
majority in principal amount of an outstanding series of notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the Trustee with respect to such series of notes. These
majority holders of a series of notes may also direct the Trustee in performing any other action under the Indenture with respect to such series of notes.
Before you bypass the Trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect
your interests relating to a series of notes, all of the following must occur:
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the holder of your note must give the Trustee written notice that an event of default has occurred with respect to such series of notes, and the event of default must not have been cured or waived;
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the holders of not less than 25% in outstanding principal amount of such series of notes must make a written request that the Trustee take action because of the default, and they or other holders must offer to the
Trustee indemnity reasonably satisfactory to the Trustee against the cost and other liabilities of taking that action;
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the Trustee must not have taken action for 60 days after the above steps have been taken; and
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during those 60 days, the holders of a majority in outstanding principal amount of such series of notes must not have given the Trustee directions that are inconsistent with the written request of the holders of not
less than 25% in outstanding principal amount of such series of notes.
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You are entitled at any time, however, to bring a
lawsuit for the payment of money due on your note on or after its stated maturity (or on or after its redemption date).
Book-entry and
other indirect owners should consult their banks or brokers for information on how to give notice or direction to or make a request of the Trustee and how to declare or cancel an acceleration of the maturity.
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Waiver of Default
The holders of not less than a majority in principal amount of a series of notes may waive a default for all notes of such series. If this
happens, the default will be treated as if it has not occurred. No one can waive a payment default on your note, however, without the approval of the particular holder of that note.
Annual Information about Defaults to the Trustee
We will furnish to the Trustee every year a written statement of two of our officers certifying that to their knowledge we are in compliance
with the Indenture and the notes, or else specifying any default under the Indenture.
Defeasance, Covenant Defeasance and Satisfaction and Discharge
When we use the term defeasance, we mean discharge from some or all of our obligations under the Indenture. If we deposit with the
Trustee funds or government securities, sufficient to make payments on a series of notes on the dates those payments are due and payable and other specified conditions are satisfied, then, at our option, either of the following will occur:
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we will be discharged from our obligations with respect to such series notes (legal defeasance); or
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we will be discharged from any covenants we make in the Indenture for the benefit of such series of notes and the related events of default will no longer apply to us (covenant defeasance).
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If we defease any series of notes, the holders will not be entitled to the benefits of the Indenture, except for our
obligations to register the transfer or exchange of such notes, replace stolen, lost or mutilated notes of such series or maintain paying agencies and hold moneys for payment in trust. In case of covenant defeasance, our obligation to pay principal,
premium and interest on the applicable series of notes will also survive. In the case of either legal defeasance or covenant defeasance, the
Co-Obligor
will be released to the same extent as the Company.
We will be required to deliver to the Trustee an opinion of counsel that the deposit and related defeasance would not cause the holders of the
applicable series of notes to recognize gain or loss for federal income tax purposes. If we elect legal defeasance, that opinion of counsel must be based upon a ruling from the United States Internal Revenue Service or a change in law to that
effect.
In addition, we may satisfy and discharge all our obligations under the Indenture with respect to a series of notes, other than
our obligation to register the transfer of and exchange the notes, provided that we either:
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deliver all outstanding notes of such series to the Trustee for cancellation; or
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all notes of such series not so delivered for cancellation have either become due and payable or will become due and payable at their stated maturity within one year or are to be called for redemption within one year,
and in the case of this bullet point, we have deposited with the Trustee in trust an amount of cash sufficient to pay the entire indebtedness of the notes of such series, including interest to the stated maturity or applicable redemption date.
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Notices
Notices to be
given to holders of a global security will be given only to the depository, in accordance with its applicable policies as in effect from time to time. Notices to be given to holders of any notes not in global form will be sent by mail to the
respective addresses of the holders as they appear in the Trustees records, and will be deemed given when mailed. Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will
affect the sufficiency of any notice given to another holder.
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Book-entry and other indirect owners should consult their banks or brokers for information on how
they will receive notices.
Concerning the Trustee
The Bank of New York Mellon Trust Company, N.A. is acting as trustee under the Indenture. At all times, the Trustee must comply with all
applicable requirements under the Trust Indenture Act of 1939.
Governing Law
The Indenture and the notes will be governed by New York law.
Book-Entry System
General
The Exchange Notes will be represented by one or more global securities (the global securities) in registered form
without interest coupons.
Global securities will be deposited upon issuance with the Trustee as custodian for DTC and registered in the
name of DTC or its nominee, in each case, for credit to an account of a direct or indirect participant of DTC as described below.
The
global securities may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global securities may not be exchanged for Exchange Notes in certificated form except
in the limited circumstances described below. See Depository ProceduresExchange of Book-Entry Notes for Certificated Notes. In addition, transfers of beneficial interests in the global securities are subject to the applicable
rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear System (Euroclear) and Clearstream Banking S.A. (Clearstream)), which may change from time to time.
The Exchange Notes may be presented for registration of transfer and exchange at the offices of the registrar.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their
participants directly to discuss these matters.
DTC has advised us that it is a limited-purpose trust company created to hold securities
for its participating organizations (collectively, the Participants) and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its
Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTCs system is also available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the Indirect Participants). Persons who are not Participants may beneficially own securities held by
or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised us that, pursuant to procedures established by it:
(1) upon deposit of the global securities, DTC will credit the accounts of Participants with portions of the principal amount
of the global securities; and
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(2) ownership of these interests in the global securities will be shown on, and
the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in
the global securities).
Investors in the global securities who are Participants in DTCs system may hold their interests therein
directly through DTC. Investors in the global securities who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) that are Participants in such system. Euroclear and Clearstream
may hold interests in the global securities on behalf of their participants through customers securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./N.V., as operator of the
Euroclear, and Clearstream. Such depositaries in turn will hold such positions in customers securities accounts in the names of the nominees of the depositaries on the books of DTC. All interests in a global security, including those held
through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. All securities in Euroclear or
Clearstream are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts.
The laws
of some jurisdictions may require that certain persons take physical delivery of securities that they own in the form of a certificate. Consequently, the ability to transfer beneficial interests in a global security to such Persons will be limited
to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having a beneficial interest in a global security to pledge such interest to Persons that do not
participate in DTCs system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest.
Except as described below, owners of an interest in the global securities will not have Exchange Notes registered in their names, will not
receive or be entitled to receive physical delivery of Exchange Notes in the form of a certificate, will not be considered the registered owners or holders thereof under the Indenture or the Exchange Notes for any purpose and may not be
entitled to give the Trustee directions, instructions or approvals. So long as DTC or its nominee is the registered owner of a global security, DTC or that nominee will be considered the sole owner or holder of the Exchange Notes represented by that
global security for all purposes under the Indenture and under the Exchange Notes. For that reason, each holder owning a beneficial interest in a global security must rely on DTCs procedures and, if that holder is not a direct or indirect
participant in DTC, on the procedures of the DTC participant through which that holder owns its interest, to exercise any rights of a holder of Exchange Notes under the Indenture or the global security for any purpose.
Payments in respect of the principal of, and interest and premium, if any, on, a global security registered in the name of the nominee of DTC
will be payable to the nominee in its capacity as the registered holder under the Indenture. Payments on the Exchange Notes represented by the global securities will be made in immediately available funds. Under the terms of the Indenture, the
Issuers and the Trustee will treat the persons in whose names the Exchange Notes, including the global securities, are registered as the owners thereof for the purpose of receiving such payments and for all other purposes. Consequently, neither the
Issuers, the Trustee, nor any agent of ours or the Trustee has or will have any responsibility or liability for:
(1) any
aspect of DTCs records or any Participants or Indirect Participants records relating to or payments made on account of beneficial ownership interest in the global securities or for maintaining, supervising or reviewing any of
DTCs records or any Participants or Indirect Participants records relating to the beneficial ownership interests in the global securities; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
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DTC has advised us that its current practice, upon receipt of any payment in respect of
securities such as the Exchange Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment on such payment
date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect
Participants to the beneficial owners of the Exchange Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC,
the Trustee or the Issuers. Neither the Issuers nor the Trustee will be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the beneficial owners of the Exchange Notes, and the Issuers and the Trustee
may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Subject to the
transfer restrictions set forth under Transfer Restrictions, transfers between Participants in DTC will be effected in accordance with DTCs procedures, and will be settled in
same-day
funds,
and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the Exchange Notes described herein, cross-market transfers between persons
holding directly or indirectly through the Participants in DTC, on the one hand, and persons holding directly or indirectly through Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTCs
rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such
system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to
its depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global security, and making or receiving payment, in accordance with normal procedures for
same-day
funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised us that it will take any action permitted to be taken by a holder of the Exchange Notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the global securities and only in respect of such portion of the aggregate principal amount of the Exchange Notes as to which such Participant or Participants has or have given such
direction.
Although DTC, Euroclear and Clearstream have agreed to the preceding procedures to facilitate transfers of interests in the
global securities among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither the Issuers, the Trustee nor any of
the Issuers respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing
their operations.
Exchange of Book-Entry Exchange Notes for Certificated Exchange Notes
The Issuers will issue Exchange Notes in certificated form to each person that DTC identifies as the beneficial owner of the notes represented
by the global securities upon surrender by DTC of the global securities only if:
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DTC notifies us that it is no longer willing or able to act as a depository for the global securities or DTC has ceased to be a clearing agency registered under the Exchange Act, and we have not appointed a successor
depository within 90 days of that notice; or
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we decide not to have such notes represented by a global security.
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Additionally, if an event of default with respect to the Exchange Notes of a series has occurred and is
continuing, a holder may request that certificates representing the Exchange Notes of such series be registered in such holders name.
In all cases, Exchange Notes in certificated form delivered in exchange for any global security or beneficial interest therein will be
registered in names, and issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, requested by or on behalf of DTC (in accordance with its customary procedures) and will bear the restrictive legend referred to in
Transfer Restrictions unless we determine otherwise in compliance with applicable law.
Neither we nor the Trustee will be
liable for any delay by a global security holder or DTC in identifying the beneficial owners of the Exchange Notes and we and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the global security holder or
DTC about the registration and delivery, and the respective principal amounts, of the Exchange Notes to be issued or other matters for all purposes.
Same Day Settlement and Payment
Payments in respect of the Exchange Notes represented by a global security (including principal, premium, if any, and interest) will be made by
wire transfer of immediately available funds to the accounts specified by the global security holder. With respect to certificated Exchange Notes, the Issuers will make all payments of principal, premium, if any, additional amounts, if any, and
interest in the manner described above under Payments on the Exchange Notes; Paying Agent. We expect that secondary trading in the certificated Exchange Notes will also be settled in immediately available funds.
Because of time zone differences, credits of securities received in Euroclear or Clearstream as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits, or any transactions in the securities settled during such processing, will be reported to the
relevant Euroclear participants or Clearstream participants on that business day. Cash received in Euroclear or Clearstream as a result of sales of securities by or through a Euroclear participant or a Clearstream participant to a DTC participant
will be received with value on the business day of settlement in DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day following settlement in DTC.
The information in the foregoing section, Book-Entry System, concerning DTC, Clearstream and Euroclear and the respective
operations and procedures thereof has been obtained from sources that we believe to be reliable (including DTC), but we take no responsibility for its accuracy.
Form, Exchange and Transfer
If any notes
cease to be issued in registered global form, they will be issued:
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only in fully registered form;
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without interest coupons; and
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in denominations of $2,000 and multiples of $1,000.
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Holders may exchange their notes for
notes of smaller denominations (subject to the denomination limitations described above) or combine notes into fewer notes of larger denominations, as long as the total principal amount is not changed. You may not exchange your notes for securities
of a different series or having different terms.
Holders may exchange or transfer their notes at the office of the Trustee. They may also
replace lost, stolen, destroyed or mutilated notes at that office. We have appointed the Trustee to act as our agent for registering notes
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in the names of holders and transferring and replacing notes. We may appoint another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or exchange their notes, but they may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or exchange, and any replacement, will be made only if our transfer agent is satisfied with the holders proof of legal ownership. The transfer agent may require an
indemnity before replacing any notes.
We may appoint additional transfer agents or cancel the appointment of any particular transfer
agent. We may also approve a change in the office through which any transfer agent acts.
If we redeem less than all the notes of a
series, we may block the transfer or exchange of notes of such series during the period beginning 15 days before the day such notes to be redeemed are selected for redemption and ending on the day of such selection, in order to freeze the list of
holders to prepare the mailing. We may also refuse to register transfers of or exchange any notes selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any note being partially redeemed.
If a note is represented by a global security, only DTC will be entitled to transfer and exchange the note as described in this
subsection, since the depository will be the sole holder of the note.
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