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| Acceptance of Original Notes and Delivery of Exchange Notes | | Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all original notes properly tendered prior to the expiration of the exchange offer. We will complete the exchange offer and issue the exchange notes promptly after the expiration of the exchange offer. |
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| Exchange Agent | | U.S. Bank Trust Company, National Association, the trustee under the indenture governing the notes, is serving as exchange agent in connection with the exchange offer. The address and telephone number of the exchange agent are set forth under the heading “The Exchange Offer—The Exchange Agent.” |
The exchange offer applies to the
$600.0 million aggregate principal amount2028 original notes outstanding as of the
date hereof and the 2033 original notes outstanding as of the date hereof. The form and terms of the exchange notes
of each series will be identical in all respects to the form and the terms of the original notes
of such series except that the exchange notes:
•will have been registered under the Securities Act;
•will not be subject to restrictions on transfer under the Securities Act;
•will not be entitled to the registration rights that apply to the original notes; and
•will not be subject to any increase in annual interest rate as described below under “The Exchange Offer—Purpose of the Exchange Offer.”
The exchange notes evidence the same debt as the original notes exchanged for the exchange notes and will be entitled to the benefits of the same indenture under which the original notes were issued, which is governed by New York law.
The following is a brief summary of the principal terms of the exchange notes. For a more complete description of the terms of the exchange notes and the terms and provisions of the indenture that govern the original notes and will govern the exchange notes, see “Description of the Exchange Notes.”
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| Issuer | | LKQ Corporation |
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| Notes Offered | | $800,000,000 aggregate principal amount of 5.750% Senior Notes due 2028, which we refer to as the “2028 exchange notes;” and
$600,000,000 aggregate principal amount of 4.75%6.250% Senior Notes due 2023.2033, which we refer to as the “2033 exchange notes.” We refer to the 2028 exchange notes and the 2033 exchange notes collectively as the “exchange notes.” |
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| Maturity | | The 2028 exchange notes will mature on MayJune 15, 2023.2028.
The 2033 exchange notes will mature on June 15, 2033. |
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| Interest | | Interest on the 2028 exchange notes will accrue at a rate of 4.75%5.750% per annum, payableannum. Interest on the 2033 exchange notes will accrue at a rate of 6.250% per annum. We will pay interest on the exchange notes semi-annually in cash in arrears on MayJune 15 and NovemberDecember 15 of each year, commencing NovemberDecember 15, 2013.2023. |
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Guarantees | | | | | | | | |
| Guarantees | | The exchange notes will be initially fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our 100%wholly owned domestic subsidiaries that guarantee the obligations under our senior secured credit facilities, subject to certain exceptions.the Senior Unsecured Credit Agreement and the CAD Note (each, as defined below). See “Description of the Exchange Notes— RankingRanking” and Guarantees.“Description of Certain Indebtedness.” For
The guarantor subsidiaries, without giving effect to the Uni-Select Acquisition, represented approximately 50% and 61% of our revenue and income from continuing operations, respectively, for the six months ended June 30, 2023, and represented approximately 51% and 52% of our total assets and total liabilities, respectively, as of June 30, 2023 (excluding, in each case, intercompany amounts). The guarantor subsidiaries, without giving effect to the Uni-Select Acquisition, represented approximately 52% and 71% of our revenue and income from continuing operations, respectively, for the year ended December 31, 2013, our subsidiaries that do not guarantee the notes2022, and represented approximately 32%47% and 26% of our total revenue and operating income, respectively. In addition, these non-guarantor subsidiaries represented approximately 38% and 30%42% of our total assets and total liabilities, respectively, as of December 31, 20132022 (excluding, in each case, intercompany amounts). |
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| Ranking | | The exchange notes offered hereby and the guarantees thereof will be our and the subsidiary guarantors’ senior unsecured obligations. They will rank:obligations, and will:
• rank equally in right of payment with all of our and the guarantors’each subsidiary guarantor’s existing and future senior debt;unsecured indebtedness;
• rank senior in right of payment to all of our and each subsidiary guarantor’s existing and future subordinated indebtedness;
• be effectively subordinated to all of our and the subsidiary guarantors’ existing and future subordinated debt;secured indebtedness to the extent of the lesser of the obligations secured by such assets and the value of the assets securing such indebtedness; and
• be structurally subordinated to all liabilities (including trade payables) of our and the subsidiary guarantors’ existing and future subsidiaries that do not guarantee the notes; and• effectively subordinated to all of our and the guarantors’ secured indebtedness (including the obligations under our senior secured credit facilities to the extent of the value of the assets securing such indebtedness).
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notes.
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| | As of December 31, 2013, after giving effect to the offeringJune 30, 2023, our total long-term debt was approximately $4.0 billion (approximately $72 million of the original noteswhich was secured debt), and the borrowings under the senior secured credit facilities and the application of the proceeds therefrom, we had approximately $675.3 million aggregate principal amount of secured debt outstanding and had approximately $1,070.6$700 million of undrawn availability under the Senior Unsecured Credit Agreement (after giving effect to approximately $45.6$74 million of outstanding letters of credit) under the Revolving Credit Facility and $80.0 million of undrawn availability under our receivables securitization program. Of these amounts,credit outstanding). In addition, as of the same date,June 30, 2023, our subsidiaries that dowill not guarantee the original notes or the exchange notes had approximately $236.5 million$1.6 billion of outstanding indebtedness (which includes $233.8$742 million of borrowings under our Revolvingthe Senior Unsecured Credit FacilityAgreement by foreignour subsidiaries that are borrowers under the RevolvingSenior Unsecured Credit Facility but that do not guaranteeAgreement).
In connection with the notes).closing of the Uni-Select Acquisition, we borrowed approximately $531 million under the CAD Note on July 31, 2023. The remaining approximately $1.6 billion required to fund the purchase price for the Uni-Select Acquisition (amount is exclusive of any proceeds to be received in connection with the anticipated divestiture of Uni-Select’s GSF Car Parts segment) was funded with a combination of proceeds from the original notes (which were held in an escrow account pending closing of the Uni-Select Acquisition on August 1, 2023), borrowings on the revolving credit facilities under our Senior Unsecured Credit Agreement, and cash-on-hand. |
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| Optional Redemption | | On or after May 15, 2018, we may redeem the exchange notes, in whole or in part, at any time at the redemption prices described under “Description of the Exchange Notes—Optional Redemption.” In addition, we may redeem up to 35% of the aggregate principal amount of the exchange notes before May 15, 2016 with the net cash proceeds from certain equity offerings at a redemption price of 104.750% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the redemption date. We may also redeem some or all of the exchange notes before May 15, 2018of either series at aany time and from time to time at the applicable redemption price of 100%prices described under the heading “Description of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make whole” premium.Exchange Notes—Optional Redemption.” |
| Special Mandatory Redemption | | The 2033 original notes were subject to a special mandatory redemption provision which would have applied to the 2033 exchange notes if the Uni-Select Acquisition was not consummated, or the Uni-Select Agreement was terminated, on or prior to November 27, 2023 (subject to potential extension). The Uni-Select Acquisition was consummated on August 1, 2023 and, therefore, the 2033 exchange notes will not be subject to the special mandatory redemption provision that applied to the 2033 original notes. |
Change of Control OfferRepurchase Event | | If we experience specific kindsIn the event of a change of control transactionstriggering event as described herein, we maywill be required to offer to repurchase the exchange notes of each series at a price equal to 101% of the principal amount of the notes,thereof, plus accrued and unpaid interest if any, to, but not including, the date of purchase.repurchase. See “Description of the Exchange Notes—Repurchase at the Option of Holders—Change of Control.” |
| Further Issues of Notes | |
Certain Covenants | | The indenture contains covenants that, among other things, will limit our abilityWe may, from time to time, without notice to or the consent of the holders of the exchange notes, issue additional notes of either series and create and issue additional series of debt securities having the abilitysame terms as and ranking equally and ratably with the exchange notes of our subsidiaries to:
• incur liens on assets;
• make certain restricted payments;
• engagesuch series in certain sale and leaseback transactions; and
• sell certain assets or merge or consolidate with or into other companies.
Certain covenants will cease to apply to the notes for so long as the notes have investment grade ratings. The covenants set forth in the indenture are subject to important exceptions and qualificationsall respects, as described under “Description of the Exchange Notes—Certain Covenants.Further Issuances of Notes.”
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| No Listing | | No series of the exchange notes will be listed on any national securities exchange. |
No Established Trading MarketForm and Denominations | | TheEach series of the exchange notes that will be issued in this exchange offer will be a new classminimum denominations of securities for which there is currently no market. Although certain$2,000 and integral multiples of the initial purchasers have informed us that they intend to make a market$1,000 in the notes, such initial purchasers are not obligated to do so, and may discontinue market-making activities at any time without notice. Accordingly, we cannot assure you that a liquid market for theexcess thereof. The exchange notes will develop or be maintained.book-entry only and registered in the name of a nominee of The Depository Trust Company (“DTC”). |
| Governing Law | | The exchange notes, the guarantees, and the indenture are governed by, and construed in accordance with, the laws of the State of New York. |
| Trustee | | U.S. Bank Trust Company, National Association |
Use of ProceedsRisk Factors | | We will not receive any cash proceeds from the exchange offer. |
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Risk Factors | | Investing in the exchange notes involves substantial risks. You should carefully consider the risk factors set forth under the caption “Risk Factors,” as well as other information included and incorporated by reference into this prospectus prior to making an investment in the exchange notes. See “Risk Factors” beginning on page 9.10. |
You should carefully consider the risk factors and uncertainties described below and other information included and incorporated by reference in this prospectus in evaluating us, our business and your participation in the exchange offer. If any of the events described below occur, our business, financial condition, operating results and prospects could be materially adversely affected, which, in turn, could adversely affect the trading price of the exchange notes and our ability to repay the exchange notes.
Risks Relating to Our Business
For a discussion of risks related to our business and operations, please see “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for our fiscal year ended December 31,
2013,2022, which is incorporated by reference in this prospectus, as well as
similar disclosures contained in our
other filings with the
SEC subsequent to the date of this prospectus.SEC.
Risks Relating to the Exchange Offer
The exchange offer may not be consummated.
The exchange offer is subject to the condition that the exchange offer does not violate any applicable law or any interpretations of the staff of the SEC. Even if the exchange offer is completed, it may not be completed on the time schedule described in this prospectus. Accordingly, holders of original notes participating in the exchange offer may have to wait longer than expected to receive the exchange notes, during which time those holders will not be able to effect transfers of their original notes tendered in the exchange offer.
You must comply with the exchange offer procedures in order to receive
new, freely tradable exchange notes.
We will not accept your original notes for exchange if you do not follow the exchange offer procedures. We will issue exchange notes as part of
thisthe exchange offer only after timely receipt of your original notes, a properly completed and duly executed letter of transmittal and all other required documents or if you comply with the guaranteed delivery procedures for tendering your original notes. Therefore, if you want to tender your original notes, please allow sufficient time to ensure timely delivery. If we do not receive your original notes, letter of transmittal, and all other required documents by the expiration date of the exchange offer, or you do not otherwise comply with the guaranteed delivery procedures for tendering your original notes, we will not accept your original notes for exchange. Neither we nor the exchange agent is required to notify you of defects or irregularities with respect to the tenders of original notes for exchange. If there are defects or irregularities with respect to your tender of original notes, we will not accept your original notes for exchange unless we decide in our sole discretion to waive such defects or irregularities.
You may have difficulty selling the original notes that you do not exchange.
If you do not exchange your original notes for exchange notes in the exchange offer, you will continue to be subject to the restrictions on transfer of your original notes described in the legend on your original notes. The restrictions on transfer of your original notes arise because we issued the original notes under exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, you may only offer or sell the original notes if they are registered under the Securities Act and applicable state securities laws, or offered and sold under an exemption from these requirements. Except as required by the registration rights agreement, we do not intend to register the original notes under the Securities Act. The tender of original notes under the exchange offer will reduce the principal amount of the original notes. Due to the corresponding reduction in liquidity, this may have an adverse effect upon, and increase the volatility of, the market price of any original notes that you continue to hold following completion of the exchange offer. Additionally, if a large number of original notes are exchanged for exchange notes issued in the exchange offer, it may be more difficult for you to sell your unexchanged original notes because there will be fewer original notes outstanding. See “The Exchange Offer—Consequences of Failure to Exchange Original Notes.”
Some persons who participate in the exchange offer must deliver a prospectus in connection with resales of the exchange notes.
Based on interpretations of the staff of the SEC contained in Exxon Capital Holdings Corp., SEC No-Action Letter available on May 13, 1988, Morgan Stanley & Co., Incorporated, SEC No-Action Letter available June 5, 1991 and Shearman & Sterling, SEC No-Action Letter available July 2, 1993, we believe that you may offer for resale, resell or otherwise transfer the exchange notes without compliance with the registration and prospectus delivery
requirements of the Securities Act. However, in some instances described in this prospectus under "Plan of Distribution," you will remain obligated to comply with the registration and prospectus delivery requirements of the Securities Act to transfer your exchange notes. In these cases, if you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes under the Securities Act, you may incur liability under the Securities Act. We do not and will not assume, or indemnify you against, this liability.
Risks Relating to our Indebtedness,
our Financial Structure and the Exchange Notes
We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business.
As of
December 31, 2013,June 30, 2023, we had
$1,305.8(a) approximately $4.0 billion of total long-term debt outstanding ($72 million
of which was secured), including $1.4 billion aggregate principal amount of
debt outstanding.the original notes, €500 million ($545 million) aggregate principal amount of 3.875% senior notes due April 1, 2024 (the “Euro Notes (2024)”), €250 million ($273 million) of 4.125% senior notes due 2028 (the “Euro Notes (2028)”), $500 million drawn of term loans under the Senior Unsecured Credit Agreement, and $1,226 million drawn of the revolving credit facilities under the Senior Unsecured Credit Agreement, and (b) $700 million of availability under the Senior Unsecured Credit Agreement (after giving effect to approximately $74 million of letters of credit outstanding). In connection with the closing of the Uni-Select Acquisition, we borrowed approximately $531 million under the CAD Note on July 31, 2023. The remaining approximately $1.6 billion required to fund the purchase price for the Uni-Select Acquisition (amount is exclusive of any proceeds to be received in connection with the anticipated divestiture of Uni-Select’s GSF Car Parts segment) was funded with a combination of proceeds from the original notes (which were held in an escrow account pending closing of the Uni-Select Acquisition on August 1, 2023), borrowings on the revolving credit facility under our Senior Unsecured Credit Agreement, and cash-on-hand. Under the Senior Unsecured Credit Agreement, the Credit Agreement Revolving Loans have a maturity date of January 5, 2028, and the Credit Agreement Term Loan has a maturity date of January 5, 2026. The maturity date of the Credit Agreement Revolving Loans can be extended for up to two years in one-year increments. The maturity date of the Credit Agreement Term Loan can be extended for one year. The CAD Note matures three years after the date of funding. Our significant amount of debt and our debt service obligations could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position.
For example,
itour debt and our debt service obligations could:
make it more difficult for us to satisfy our obligations under the notes;
• increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;
• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and industry;
• place us at a disadvantage compared to competitors that may have proportionately less debt;
• limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and
• increase our cost of borrowing.
As of December 31, 2013, we also had $1,070.6 million of undrawn availability (after giving effect to approximately $45.6 million of outstanding letters of credit) under the Revolving Credit Facility and $80.0 million of undrawn availability under our receivables securitization program.
In
January 2014, we increased our borrowings under our Revolving Credit Facility by $370 million and borrowed the full amount available under our receivables securitization program, primarily to finance our acquisition of Keystone Specialty. Ifaddition, if we or our subsidiaries incur additional debt, the risks associated with our substantial leverage and the ability to service such debt would increase.
The
indentures governing our notes do not impose any limitations on our ability to incur additional debt or protect against certain other types of
transactions.Althoughtransactions, and we are subject tomay incur additional indebtedness under our Senior Secured Credit Facility for so long as it remains in effect,credit agreements.
The indentures governing the Euro Notes (2024) and the Euro Notes (2028) and the indenture that governs the
original notes
doesand the exchange notes offered hereby do not restrict the future incurrence of unsecured indebtedness, guarantees or other obligations. The
indentures governing our Euro Notes (2024) and Euro Notes (2028) and the indenture that governs the
original notes
containsand the exchange notes offered hereby contain certain limitations on our ability to incur liens on assets, and
the indentures governing our Euro Notes (2024) and Euro Notes (2028) and the indenture that governs the original notes and the exchange notes offered hereby contain certain limitations on our ability to engage in sale and leaseback transactions. However, these limitations are subject to important exceptions.
See “Description of the Exchange Notes—Certain Covenants—Limitation on Liens” and “Description of the Exchange Notes—Certain Covenants—Limitation on Sale and Leaseback Transactions.” In addition, the
indenture governing the notes doesindentures do not contain many other restrictions, including certain restrictions contained in
ourthe Senior
SecuredUnsecured Credit
Facility,Agreement and the CAD Note, including, without limitation,
restrictions onmaking investments,
or prepaying subordinated indebtedness or engaging in transactions with our affiliates.
Our
The Senior
SecuredUnsecured Credit
Facility permits,Agreement and the CAD Note permit, subject to specified conditions and limitations, the incurrence of a significant amount of additional indebtedness.
As of December 31, 2013, we had $1,070.6 million of undrawn availability (after giving effect to approximately $45.6 million of outstanding letters of credit) under the Revolving Credit Facility and $80.0 million of undrawn availability under our receivables securitization program). In January 2014, we increased our borrowings under our Revolving Credit Facility by $370 million and borrowed the full amount available under our receivables securitization program, primarily to finance our acquisition of Keystone Specialty. If we or our subsidiaries incur additional debt, the risks associated with our substantial leverage and the
abilityneed to service such debt would increase.
Our
The Senior
SecuredUnsecured Credit
Facility imposes significantAgreement and the CAD Note impose operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.
Our Senior
SecuredUnsecured Credit
Facility imposes significantAgreement and CAD Note impose operating and financial restrictions on us. These restrictions
may limit our ability, among other things, to:
• incur, assume or permit to exist additional indebtedness (including guarantees thereof); outside of the Senior Unsecured Credit Agreement and the CAD Note;
pay dividends or certain other distributions on our capital stock or repurchase our capital stock or prepay subordinated indebtedness;
• incur liens on assets;
make certain investments or other restricted payments;
pay dividends or make other payments from our restricted subsidiaries that are borrowers or guarantors under our Senior Secured Credit Facility to subsidiaries that are not guarantors under our Senior Secured Credit Facility;
• engage in transactions with affiliates;
• sell certain assets or merge or consolidate with or into other companies;
• guarantee indebtedness; and
• alter the business that we conduct.
As a result of these covenants and restrictions, we
willmay be limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur
or changes we make to existing indebtedness could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants. The failure to comply with any of these covenants would cause a default under the
applicable credit agreement. A default, if not waived, could result in acceleration of our debt, in which case the debt would become immediately due and payable. If this occurs, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing were available, it may be on terms that are less attractive to us than our existing credit facilities or it may be on terms that are not acceptable to us.
We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.successful
. Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which
isare subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our
indebtedness, including the notes.indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our
indebtedness, including the notes.indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. If our operating results and available cash are insufficient to meet our debt service obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions or to obtain the proceeds that we
couldhope to realize from them, and these proceeds may not be adequate to meet any debt service obligations then due. Any future refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations. Additionally,
our credit agreements and the
Senior Secured Credit Facility limitsindentures that govern the Euro Notes (2024) and the Euro Notes (2028) limit the use of the proceeds from
any dispositioncertain dispositions of our
assets; asassets. As a result, our
Senior Secured Credit Facilitycredit agreements and the indentures that govern the Euro Notes (2024) and the Euro Notes (2028) may prevent us from using the proceeds from such dispositions to satisfy
all of our debt service obligations.
Our future capital needs may require that we seek to refinance our debt or obtain additional debt or equity financing, events that could have a negative effect on our business.
We may need to raise additional funds in the future to, among other things, refinance existing debt, fund our existing operations, improve or expand our operations, respond to competitive pressures, or make acquisitions. From time to time, we may raise additional funds through public or private financing, strategic alliances, or other arrangements. Funds may not be available or available on terms acceptable to us as a result of different factors, including but not limited to, turmoil in the credit markets that results in the tightening of credit conditions and current or future regulations applicable to the financial institutions from which we seek financing. If adequate funds are not available on acceptable terms, we may be unable to meet our business or strategic objectives or compete effectively. If we raise additional funds by issuing equity securities, stockholders may experience dilution of their ownership interests, and the newly issued securities may have rights superior to those of our common stock. If we raise additional funds by issuing debt, we may be subject to higher borrowing costs and further limitations on our operations. If we refinance or restructure our debt, we may incur charges to write off the unamortized portion of deferred debt issuance costs from a previous financing, or we may incur charges related to hedge ineffectiveness from our interest
rate swap obligations. There are restrictions in the indentures that govern the Euro Notes (2024), the Euro Notes (2028), the 2028 exchange notes offered hereby, and the 2033 exchange notes offered hereby on our ability to refinance such notes prior to January 1, 2024, April 1, 2023, May 15, 2028 and March 15, 2033, respectively. We could refinance the Euro Notes (2024), the Euro Notes (2028), and the exchange notes offered hereby through open market purchases, subject to a limitation in our credit agreement on the amount of such purchases. If we fail to raise capital when needed, our business may be negatively affected.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly.Certain borrowingssignificantly
. Borrowings under our
Senior Secured Credit Facility and the borrowing under our receivables securitization facilitycredit agreements are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
Moreover, changes in market interest rates could affect the trading value of the Euro Notes (2024), the Euro Notes (2028), and the exchange notes offered hereby. To hedge the risk of changes in interest rates related to forecasted debt issuance to finance a portion of the Uni-Select Acquisition, in March 2023, we entered into forward-starting interest rate swaps to lock interest rates for the exchange notes offered hereby. These swaps were settled in May 2023 after issuance of the original notes, resulting in total payments of $13 million. As of June 30, 2023, on an as adjusted basis to give effect to the Uni-Select Acquisition and the borrowings under our Senior Unsecured Credit Agreement and CAD Note in connection therewith as well as the offering of the original notes and the application of the proceeds therefrom, we had an aggregate principal amount of $1.7 billion of outstanding variable rate indebtedness that was not covered by interest rate hedges.
Repayment of our indebtedness
including the notes, is dependent on cash
flowflows generated by our subsidiaries.
We are a holding company and repayment of
the notesour indebtedness will be dependent upon cash
flowflows generated by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are
borrowers or guarantors of the
notes,indebtedness, our subsidiaries do not have any obligation to pay amounts due on
the notesour indebtedness or to make funds available for that purpose. Our subsidiaries may not be able to, or be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the
notes.Euro Notes (2024), Euro Notes (2028), the original notes, and the exchange notes offered hereby. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our
subsidiaries. While our Senior Secured Credit Facility limits the ability ofsubsidiaries and, under certain circumstances, distributions from our subsidiaries
to restrict the payment of dividends or make other intercompany payments to us, these limitations aremay be subject to
certain qualifications and exceptions.taxes that reduce the amount of such distributions available to us. In the event that we do not receive
sufficient distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the
notes.YourEuro Notes (2024), the Euro Notes (2028), the original notes, and the exchange notes offered hereby.
A downgrade in our credit rating would impact our cost of capital.
Credit ratings have an important effect on our cost of capital. Credit rating agencies rate our debt securities on factors that include, among other items, our results of operations, business decisions that we make, their view of the general outlook for our industry, and their view of the general outlook for the economy. Actions taken by the rating agencies can include maintaining, upgrading, or downgrading the current rating or placing us on a watch list for possible future downgrading. We believe our current credit ratings enhance our ability to borrow funds at favorable rates. A downgrade in our current credit rating from a rating agency could adversely affect our cost of capital by causing us to pay a higher interest rate on borrowed funds under our credit facilities. A downgrade could also adversely affect our ability to issue debt securities in the future or incur other indebtedness upon favorable terms. If the Euro Notes (2024) or the Euro Notes (2028) are downgraded to a rating that is below investment grade by S&P or Moody’s, we may also become subject to additional covenants under the indentures governing the Euro Notes (2024) or the Euro Notes (2028), as the case may be.
The amount and frequency of our share repurchases and dividend payments may fluctuate.
The amount, timing and execution of our share repurchase program may fluctuate based on our priorities for the use of cash for other purposes such as operational spending, capital spending, acquisitions or repayment of debt. Changes in cash flows, tax laws and our share price could also impact our share repurchase program and other capital activities. Additionally, decisions to return capital to stockholders, including through our repurchase program or the issuance of dividends on our common stock, remain subject to determination of our Board of Directors that any such activity is in the best interests of our stockholders and is in compliance with all applicable laws and contractual obligations.
The right to receive payments on the notes is effectively junior to those lenders who have a security interest in our assets.
Our obligations under the exchange notes and our guarantors’ obligations under their guarantees of the exchange notes are unsecured, but our and each co-borrower’s obligations under our Senior Secured Credit Facility and each guarantor’s obligations under their respective guarantees of the Senior Secured Credit Facility are secured by a security interest in substantially all of our domestic tangible and intangible assets, including the stock of most of our wholly-owned United States subsidiaries and the stock of certain of our non-United States subsidiaries.unsecured. If we are declared bankrupt or insolvent, or if we default under our Senior Secured Credit Facility,any future secured indebtedness, the lenders could declare all of the funds borrowed thereunder, together with accrued interest,
immediately due and payable. If we were unable to repay such
secured indebtedness, the lenders could foreclose on the pledged assets to the exclusion of holders of the
exchange notes, even if an event of default exists under the
applicable indenture governing the
exchange notes. Furthermore, if the lenders foreclose
on our assets following an event of default under any future secured indebtedness and sell the pledged equity interests in any subsidiary guarantor
underof the
Euro Notes (2024), the Euro Notes (2028), the original notes, or the exchange notes, then that guarantor will be released from its guarantee of the
Euro Notes (2024), the Euro Notes (2028), the original notes,
or the exchange notes offered hereby, as the case may be, automatically and immediately upon such sale. In any such event, because the
Euro Notes (2024), the Euro Notes (2028), the original notes,
willand the exchange notes are not
be secured by any of our assets or the equity interests in subsidiary guarantors, it is possible that there would be no assets remaining from which
your claims
by holders of the Euro Notes (2024), the Euro Notes (2028), the original notes, or the exchange notes could be satisfied or, if any assets remained, they might be insufficient to satisfy
your claims fully.
As of June 30, 2023, on an as adjusted basis to give effect to the Uni-Select Acquisition and the borrowings under our Senior Unsecured Credit Agreement and CAD Note in connection therewith as well as the offering of the original notes and the application of the proceeds therefrom, we had approximately $72 million aggregate principal amount of secured debt outstanding and the remaining approximately $4.6 billion of our outstanding debt was unsecured. See “Description of
OtherCertain Indebtedness.”
United States federal and state statutes allow courts, under specific circumstances, to void the
exchange notes, the original notes, and the guarantees, subordinate claims in respect of the
exchange notes, the original notes, and the guarantees and require
holders of the notesnoteholders to return payments received from us or the guarantors.
Our direct and indirect domestic subsidiaries that are
obligorsguarantors under the Senior
SecuredUnsecured Credit
Facility willAgreement and the CAD Note guarantee the obligations under the
notes. Ouroriginal notes and the exchange notes offered hereby. The issuance of the
original notes and the exchange notes and the issuance of the guarantees by the guarantors may be subject to review under state and federal laws if a bankruptcy, liquidation or reorganization case or a lawsuit, including in circumstances in which bankruptcy is not involved, were commenced at some future date by, or on behalf of, our unpaid creditors or the unpaid creditors of a guarantor. Under the federal bankruptcy laws
of the United States and comparable provisions of state fraudulent transfer laws, a court may avoid or otherwise decline to enforce the
exchange notes, the original notes, or a guarantor’s guarantee, or may subordinate the
exchange notes
orand such
guaranteeguarantees, to our or the applicable guarantor’s existing and future indebtedness. While the relevant laws may vary from
statejurisdiction to
state,jurisdiction, a court might do so if it found that when
indebtedness under the
exchange notes
wereor the original notes was issued, or when the applicable guarantor entered into its guarantee, or, in some
states,jurisdictions, when payments became due under the
exchange notes, the original notes, or such guarantee, the issuer or the applicable guarantor received less than reasonably equivalent value or fair consideration and:
• was insolvent or rendered insolvent by reason of such incurrence;
• was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or
• intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.
A court would likely find that we or a guarantor did not receive reasonably equivalent value or fair consideration for the
exchange notes, the original notes or such guarantee if we or such guarantor did not substantially benefit directly or indirectly from the issuance of the
exchange notes or the original notes.
Thus, if the guarantees were legally challenged, any guarantee could be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the guarantor, the obligations of the applicable guarantor were incurred for less than reasonably equivalent value or fair consideration. If a court were to void the issuance of the exchange notes, the original notes, or any guarantee, you would no longer have any claim against us or the applicable guarantor. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the exchange notes or the original notes. Further, the avoidance of the exchange notes or the original notes could result in an event of default with respect to our and our subsidiaries’ other debt, which could result in acceleration of that debt. The measures of insolvency for purposes of these fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, an issuer or a guarantor, as applicable, would be considered insolvent if:
• the sum of its debts, including contingent liabilities, was greater than the fair saleable value of its assets;
• the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
• it could not pay its debts as they become due.
A court might also void the exchange notes, the original notes, or a guarantee, without regard to the above factors, if the court found that the exchange notes or the original notes were incurred or issued or the applicable guarantor entered into its guarantee with actual intent to hinder, delay or defraud its creditors. We cannot assure you as to what
standard a court would apply in determining whether we or the guarantors were solvent at the relevant time or that a court would agree with our conclusions in this regard, or, regardless of the standard that a court uses, that it would not determine that we or a guarantor were indeed insolvent on that date; that any payments to the holders of the notes (including under the guarantees) did not constitute preferences, fraudulent transfers or conveyances on other grounds; or that the issuance of the original notes, the exchange notes and the guarantees would not be subordinated to our or any guarantor’s other debt. In addition, any payment by us or a guarantor pursuant to the exchange notes, the original notes or itsthe guarantee could be avoided and required to be returned to us or such guarantor or to a fund for the benefit of our or such guarantor’s creditors, and accordingly the court might direct you to repay any amounts that you had already received from us or such guarantor. Among other things, under U.S. bankruptcy law, any payment by us pursuant to the exchange notes, the original notes or by a guarantor under a guarantee made at a time we or such guarantor were found to be insolvent could be voided and required to be returned to us or such guarantor or to a fund for the benefit of our or such guarantor’s creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any outside party and such payment would give such insider or outsider party more than such party would have received in a distribution under the Bankruptcy Code in a hypothetical Chapter 7 case. Although each guarantee will contain a “savings clause” intended to limit the subsidiary guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under itssubsidiary guarantee to be a fraudulent transfer, this provision may not be effective as a legal matter to protect any subsidiary guarantees from being avoided under fraudulent transfer law. Furthermore,In that regard, in
Official Committee of Unsecured Creditors of TOUSA, Inc. vv. Citicorp North America, Inc.Inc., the United States Bankruptcy Court in the Southern District of Florida held that a savings clause similar to the savings clause to be included in our indenture was unenforceable. As a result, the subsidiary guarantees were found to be fraudulent conveyances.conveyances in TOUSA. The United States Court of Appeals for the Eleventh Circuit recentlysubsequently affirmed the liability findings of the Bankruptcy Courtbankruptcy court without ruling directly on the enforceability of savings clauses generally. If the decision of the bankruptcy court in TOUSA decision were followed by other courts, the risk that the guarantees would be deemed fraudulent conveyances would be significantly increased. To the extent a court avoids the
exchange notes, the original notes, or any of the guarantees as fraudulent transfers or holds the
exchange notes, the original notes, or any of the guarantees unenforceable for any other reason,
the holders of the
original notes and the exchange notes would cease to have any direct claim against us or the applicable guarantor. If a court were to take this action, our or the applicable guarantor’s assets would be applied first to satisfy our or the applicable guarantor’s other liabilities, if any, and might not be applied to the payment of the
original notes and the exchange notes. Sufficient funds to repay the
original notes and the exchange notes may not be available from other sources, including the remaining guarantors, if any.
Not all of our subsidiaries will guarantee the original notes and the exchange notes, and the assets of our non-guarantor subsidiaries may not be available to make payments on the notes.original notes and the exchange notes
. Not all of our subsidiaries will
be required to guarantee the
original notes and the exchange notes.
See “Summary—Corporate Structure and Financing Arrangements.” In the event that any non-guarantor subsidiary becomes insolvent, liquidates, reorganizes, dissolves or otherwise winds up, holders of its indebtedness and its trade creditors generally will be entitled to payment on their claims from the assets of that subsidiary before any of those assets are made available to
us.the holders of the original notes and the exchange notes. Consequently,
your claims in respect of the
original notes
will beand the exchange notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries, including trade payables,
borrowings by LKQ Delaware LLP and our foreign borrowers under the Senior Unsecured Credit Agreement and CAD Note, and any claims of
third partythird-party holders of preferred equity interests, if any, in our non-guarantor subsidiaries.
In addition, certain of our subsidiaries located in the Czech Republic and Italy are guarantors under the Euro Notes (2024) but will not guarantee the original notes or the exchange notes and, therefore, claims in respect of the original notes and the exchange notes are also structurally subordinated to the Euro Notes (2024) for those subsidiaries located in the Czech Republic and Italy which guarantee the Euro Notes (2024) but do not guarantee the original notes and the exchange notes. For the
yearsix months ended
December 31, 2013,June 30, 2023, without giving effect to the Uni-Select Acquisition, our subsidiaries that do not guarantee the
original notes and will not guarantee the exchange notes represented approximately
32%50% and
26%39% of our total
revenuesrevenue and
operating income
respectively.from continuing operations, respectively (excluding, in each case, intercompany amounts). In addition, these non-guarantor subsidiaries represented approximately
38%49% and
30%48% of our total assets and total liabilities, respectively, as of
December 31, 2013June 30, 2023 (excluding, in each case, intercompany
amounts)amounts and without giving effect to the Uni-Select Acquisition). Of these amounts, as of the same date, our subsidiaries that do not guarantee the
original notes and will not guarantee the exchange notes had approximately
$236.5 million$1.6 billion of outstanding indebtedness (which includes
$233.8$742 million of borrowings under
our Revolvingthe Senior Unsecured Credit
FacilityAgreement by foreign subsidiaries that are borrowers under the
RevolvingSenior Unsecured Credit
Facility butAgreement). For the year ended December 31, 2022, without giving effect to the Uni-Select Acquisition, our subsidiaries that do not guarantee the
notes)original notes and will not guarantee the exchange notes represented approximately 48% and 29% of our total revenue and income from continuing operations, respectively (excluding, in each case, intercompany amounts).
In addition, these non-guarantor subsidiaries represented approximately 53% and 58% of our total assets and total liabilities, respectively, as of December 31, 2022 (excluding, in each case, intercompany amounts and without giving effect to the Uni-Select Acquisition). Of these amounts, as of the same date, our subsidiaries that do not guarantee the original notes and will not guarantee the exchange notes had approximately $1.7 billion of outstanding indebtedness (which includes $807 million of
borrowings under the Senior Unsecured Credit Agreement by foreign subsidiaries that are borrowers under the Senior Unsecured Credit Agreement).
We may not be able to repurchase the
exchange notes upon a change of control or pursuant to an asset sale offer.
Upon a change of control, as defined in the indenture governing
each series of the
exchange notes, the holders of the
applicable series of exchange notes will have the right to require us to offer to purchase all of the
exchange notes
of such series then outstanding at a price equal to 101% of their principal amount plus accrued and unpaid interest.
Such a change of control would also be an event of default under our Senior Unsecured Credit Agreement and the CAD Note and would require repurchase of the Euro Notes (2024) and the Euro Notes (2028). In order to obtain sufficient funds to pay
amounts due under the Senior Unsecured Credit Agreement and the CAD Note and the purchase price of the outstanding
Euro Notes (2024), Euro Notes (2028) and the applicable series of exchange notes, we expect that we would have to refinance
the notes.our indebtedness. We cannot assure you that we would be able to refinance
the notesour indebtedness on
reasonablefavorable terms, if at all. Our failure to offer to purchase all outstanding
exchange notes
of the applicable series or to purchase all validly tendered notes
of such series would be an event of default under the indenture. Such an event of default may cause the acceleration of our other
debt.indebtedness. Our other
debtindebtedness also may contain restrictions on repayment requirements with respect to specified events or transactions that constitute a change of control under the indenture.
See “Description of the Exchange Notes—Change of Control.”
The definition of change of control in the indenture governing the exchange notes includes a phrase relating to the sale of “all or substantially all” of our assets. There is no precise established definition of the phrase “substantially all” under applicable law. Accordingly, the ability of a holder of each series of exchange notes to require us to repurchase its exchange notes as a result of a sale of less than all our assets to another person may be uncertain.
In addition, in certain circumstances as specified in the indentureindentures governing the Euro Notes (2024) and the Euro Notes (2028), including S&P or Moody’s withdrawal of its investment grade rating on such notes or downgrade of the rating of such notes below investment grade, we will be required to commence an asset sale offer, as defined in thesuch indenture, pursuant to which we will be obligated to purchase certain notes at a price equal to 100% of their principal amount plus accrued and unpaid interest with the proceeds we receive from certain asset sales. Our other debt may contain restrictions that would limit or prohibit us from completing any such asset sale offer. In particular, our Senior Secured Credit Facility contains provisions that require us, upon the sale of certain assets, to apply all of the proceeds from such asset sale to the prepayment of amounts due under the Senior Secured Credit Facility. The mandatory prepayment obligations under the Senior Secured Credit Facility will be effectively senior to our obligations to make an asset sale offer with respect to the notes under the terms of the indenture. Our failure to purchase any such notes when required under the applicable indenture would be an event of default under such indenture.
The exchange notes will initially be held in book-entry form, and therefore you must rely on the
indenture.Holdersprocedures of the relevant clearing systems to exercise any rights and remedies.
Owners of the book-entry interests will not be considered owners or holders of exchange notes offered hereby unless and until “definitive” notes are issued in exchange for book-entry interests. Instead, we expect that the exchange notes offered hereby are issued in the form of one or more global notes, which will be deposited with the indenture trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC.
Payments of principal, interest and other amounts owing on or in respect of the exchange notes in global form will be made to the principal paying agent, which will make payments to DTC. Thereafter, such payments will be credited to DTC participants’ accounts that hold book-entry interests in the notes offered hereby in global form and credited by such participants to indirect participants. After payment to DTC, as described above, none of the Company, the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments of interest, principal or other amounts to DTC, or to owners of book-entry interests. Accordingly, if you own a book-entry interest in any series of the exchange notes offered hereby, you must rely on the procedures of DTC and, if you are not a participant in DTC, on the procedures of the participant through which you own your interest, to exercise any rights and obligations of a holder of the exchange notes offered hereby under the indenture governing the exchange notes offered hereby.
Owners of book-entry interests will not have the direct right to act upon any solicitations for consents or requests for waivers or other actions from holders of the notes may notoffered hereby. Instead, if you own a book-entry interest, you will be ablereliant on the common depositary (or its nominee) (as registered holder of the exchange notes offered hereby) to determine whenact on your instructions and/or will be permitted to act directly only to the extent you have received appropriate proxies to do so from DTC or, if applicable, from a changeparticipant. We cannot assure you that procedures implemented for the granting of control giving risesuch proxies will be sufficient to their rightenable you to havevote on any requested actions or to take any other action on a timely basis.
Similarly, upon the
notes repurchased has occurred following a saleoccurrence of
“substantially all”an “event of
our assets.The definition of change of controldefault” under and as defined in the indenture governing the exchange notes includesoffered hereby, unless and until the definitive registered notes are issued in respect of all book-entry interests, if you own a phrase relatingbook-entry interest, you will be restricted to acting through DTC. We cannot assure you that the saleprocedures to be implemented through DTC will be adequate to ensure the timely exercise of “all or substantially all” of our assets. There is no precise established definitionrights under the exchange notes. See the section entitled “Book-Entry, Delivery and Form” in this prospectus.
The liquidity and market value of the
phrase “substantially all” under applicable law. Accordingly, the abilityexchange notes may change due to a variety of
a holder of notes to require us to repurchase its notes as a result of a sale of less than all our assets to another person may be uncertain.An active trading market may not develop for the notes.
factors.
The liquidity of any trading market in theseeach series of the exchange notes, and the market price quoted for theseeach series of the exchange notes, may be adversely affected by changes in the overall market for these types of securities, changes in interest rates, changes in our ratings, and by changes in our financial performance or prospects or in the prospects for companies in our industries generally. As a result, you cannot be sure that an active trading market will develop for
Risks Related to Acquisitions and Divestitures
We face risks associated with the
notes.Key termsintegration of acquired businesses.
In addition to the
notes will be suspended if the notes achieve investment grade ratingsUni-Select Acquisition, we enter into mergers, acquisitions and
no default or event of default has occurred and is continuing.Many of the covenants in the indenture governing the notes will be suspended if the notes are rated investment grade by Standard & Poor’s and Moody’s provided at suchstrategic alliances from time no default or event of default has occurred and is continuing,to time with expected benefits including, those covenants that restrict, among other things, operating efficiencies, innovation and sharing of best practices, that may allow for future growth. Achieving the anticipated or desired benefits of the Uni-Select Acquisition or our abilityother acquisitions may be subject to pay dividends, incur debta number of significant challenges and to enter into certainuncertainties, including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and effective manner, the possibility of imprecise assumptions underlying expectations regarding potential synergies, capital requirements, and the integration process, unforeseen expenses and delays, and competitive factors in the marketplace. We could also encounter unforeseen transaction and integration-related costs or other transactions. There can be no assurance that the notes will ever be rated investment grade. However, suspensioncircumstances such as unforeseen liabilities or other issues. Some of these covenants would allow uspotential circumstances are outside of our control and any of them could result in increased costs, decreased revenue, decreased synergies and the diversion of management time and attention. If we are unable to engage in certain transactions that wouldachieve our objectives within the anticipated time frame, or at all, the expected benefits may not be permitted while these covenants wererealized fully or at all, or may take longer to realize than expected, which could have an adverse effect on our business, financial condition, results of operations or cash flows.
Divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results.
We intend to divest Uni-Select’s GSF Car Parts segment. In addition, we continually evaluate the performance and strategic fit of all of our businesses and may sell other businesses or product lines from time to time. Divestitures involve risks, including difficulties in force,the separation of operations, services, products and personnel, the diversion of management’s attention from other business concerns, the disruption of our business, the potential loss of key employees and the effectsretention of any such transactionsuncertain contingent liabilities, including environmental liabilities, related to the divested business. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or
alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a price or on terms that are less desirable than we had
anticipated, which could result in significant asset impairment charges, including those related to goodwill and
other intangible assets, that could have a material adverse effect on our financial condition and results of operations. In addition, we may experience greater dis-synergies than expected, the impact of the divestiture on our revenue growth may be larger than projected, and some divestitures may be dilutive to earnings. We cannot assure you that we will be permittedable to remainsuccessfully divest Uni-Select’s GSF Car Parts segment on commercially reasonable terms or at all. We cannot assure you that we will be successful in place even if themanaging these or any other significant risks that we encounter in divesting a business or product line, and any divestiture we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows.
SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
The exchange notes are
subsequently downgraded below investment grade. Seeguaranteed on a senior, unsecured basis by each of our wholly owned domestic subsidiaries that are guarantors under our Senior Unsecured Credit Agreement and the CAD Note (each, a “subsidiary guarantor” and, together with LKQ, the “Obligor Group”). Any guarantees will be full and unconditional, and will be subject to certain conditions for release, which are further described in this prospectus under the section titled “Description of the Exchange Notes—
Certain Covenants—SuspensionSubsidiary Guarantees.” The subsidiaries of
Certain Covenants when Notes Rated Investment Grade.”Our credit ratings mayLKQ that will not reflect all risks associated with an investmentguarantee the exchange notes are referred to herein as the “non-guarantor subsidiaries.” For a brief description of the exchange notes that we are offering hereby and the guarantees that each subsidiary guarantor is offering, see “Description of the Exchange Notes.”
We conduct our operations almost entirely through our subsidiaries. Holders of the exchange notes will have a direct claim only against the Obligor Group.
Summarized financial information is presented below for the Obligor Group (without giving effect to the Uni-Select Acquisition) on a combined basis after elimination of intercompany transactions and balances within the Obligor Group and equity in the
notes.Credit rating agencies rate our debt securities on factors that include ourearnings from and investments in any non-guarantor subsidiary. This summarized financial information has been prepared and presented pursuant to the SEC Regulation S-X Rule 13-01 and is not intended to present the financial position or results of operations actions that we take, their view of the general outlook for our industryObligor Group in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
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| Summarized Statements of Operations (in millions) | Six Months Ended June 30, 2023 | | Fiscal Year Ended December 31, 2022 |
| Revenue | $ | 3,436 | | | $ | 6,762 | |
| Cost of goods sold | 1,976 | | | 3,911 | |
Gross margin(1) | 1,460 | | | 2,851 | |
| Income from continuing operations | 337 | | | 811 | |
| Net income | $ | 337 | | | $ | 816 | |
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| Summarized Balance Sheets (in millions) | June 30, 2023 | | December 31, 2022 |
| Current assets | $ | 3,412 | | | $ | 1,845 | |
| Noncurrent assets | 3,872 | | | 3,797 | |
| Current liabilities | 858 | | | 825 | |
| Noncurrent liabilities | 3,420 | | | 2,001 | |
(1) Guarantor subsidiaries recorded $27 million and their view$46 million of the general outlooknet sales to and $91 million and $148 million of purchases from non-guarantor subsidiaries for the economy. Actions taken by the rating agencies can include maintaining, upgrading, or downgrading the current rating or placing us on a watch list for possible future downgrading. Downgrading the credit rating of our debt securities or placing us on a watch list for possible future downgrading would likely increase our cost of financing, limit our access to the capital marketssix months ended June 30, 2023 and have an adverse effect on the market price of our securities, including the notes offered hereby.fiscal year ended December 31, 2022, respectively.
The exchange offer is intended to satisfy certain of our obligations under the registration rights agreement. We will not receive any proceeds from the issuance of the exchange notes in the exchange offer, and we have agreed to pay the expenses of the exchange offer. In exchange for each of the exchange notes, we will receive original notes in like principal amount. We will retire or cancel all of the original notes tendered in the exchange offer. Accordingly, issuance of the exchange notes will not result in any increase in our outstanding indebtedness or any change in our capitalization.
RATIO OF EARNINGS TO FIXED CHARGES
Our consolidated ratio of earnings to fixed charges for each
The net proceeds from the sale of the
last five fiscal years is set forth below. You should read this table in conjunction withoriginal notes were approximately $1,385 million after the
consolidated financial statements and related notes to financial statements incorporated by reference in this prospectus. See “Incorporation by Reference.”For the purposededuction of this table, “earnings” consists of income from continuing operations before provision for income taxes, plus fixed charges (excluding capitalized interest, but including amortization of amounts previously capitalized), and “fixed charges” consists of interest (including capitalized interest) on all debt, amortization of debt discountstransaction fees and expenses, incurred on issuance, and thatincluding initial purchaser discounts. We used those net proceeds together with borrowings under the CAD Note to finance a portion of rental expense believedthe consideration payable by us in the Uni-Select Acquisition, including repaying existing Uni-Select indebtedness, to represent interest.
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| | | Year Ended December 31, | |
| | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
Ratio of Earnings to Fixed Charges: | | | 5.7 | | | | 6.7 | | | | 6.9 | | | | 5.9 | | | | 4.8 | |
pay associated fees and expenses, and for general corporate purposes.
The following table sets forth our unaudited consolidated cash and cash equivalents and capitalization as of
December 31, 2013.June 30, 2023. You should read the following table in conjunction with
the information under the heading "Summary-Summary Historical Consolidated Financial Information" and our financial statements and related notes incorporated by reference in this prospectus.
| | | | |
| | | As of
December 31,
2013 | |
Cash and equivalents | | $ | 150.5 | |
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Long-Term Debt | | | | |
Revolving Credit Facility(1) | | $ | 233.8 | |
Term Loan Facility | | | 438.8 | |
Original Notes | | | 600.0 | |
Other Long-Term Debt(2) | | | 33.2 | |
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Total Long-Term Debt | | | 1,305.8 | |
Total Stockholders’ Equity | | | 2,350.7 | |
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Total Capitalization | | $ | 3,656.5 | |
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(1) | In connection with the closing | | | | | | | | | | |
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| | | As of our acquisition of Keystone Specialty on January 3, 2014, we increased our borrowings under the RevolvingJune 30, 2023 | | |
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| | | (in millions) | | |
| Cash and cash equivalents | | | $ | 1,904 | | | |
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| Long-Term Debt | | | | | |
| | | | | |
Senior Unsecured Credit Facility by $370 million.Agreement—term loans payable | | | $ | 500 | | | |
| Senior Unsecured Credit Agreement—revolving credit facilities | | | 1,226 | | | |
| Euro Notes (2024) | | | 545 | | | |
| Euro Notes (2028) | | | 273 | | | |
| 2028 Original Notes | | | 800 | | | |
| 2033 Original Notes | | | 600 | | | |
Other Long-Term Debt(1) | | | 86 | | | |
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Total Long-Term Debt(2) | | | $ | 4,030 | | | |
| Total Stockholders’ Equity | | | 5,968 | | | |
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| Total Capitalization | | | $ | 9,998 | | | |
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(2) | | | | | |
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| (1) | Includes $15.7$14 million of notes payable, issued in connection with acquisitions$66 million of finance lease obligations, and $17.5$6 million of other obligations such as capital leases. We entered into a three year receivables securitization facility on September 28, 2012 for up to $80 milliondebt. |
| (2) | Total long-term debt excludes debt issuance costs and unamortized bond discount, which are netted against this line item in cash proceeds. In connection with the closing of our acquisition of Keystone Specialty on January 3, 2014, we increased our borrowings under the receivables securitization facility to the maximum amount of $80 million.consolidated balance sheet. |
SELECTED FINANCIAL DATA
We have derived
In connection with the
following selected consolidated financial and other dataclosing of the Uni-Select Acquisition, we borrowed approximately $531 million under the CAD Note on July 31, 2023. The remaining approximately $1.6 billion required to fund the purchase price for the
fiscal years ended December 31, 2013, 2012,Uni-Select Acquisition (amount is exclusive of any proceeds to be received in connection with the anticipated divestiture of Uni-Select’s GSF Car Parts segment) was funded with a combination of proceeds from the original notes (which were held in an escrow account pending closing of the Uni-Select Acquisition on August 1, 2023), borrowings on the revolving credit facilities under our Senior Unsecured Credit Agreement, and
2011 from our audited consolidated financial statements incorporated by reference into this prospectus. The selected consolidated financial and other data for the years ended December 31, 2010 and 2009 have been derived from our audited consolidated financial statements which are not included or incorporated by reference into this prospectus. The following selected consolidated financial and other data set forth below should be read together with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated by reference in this prospectus. | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | |
(in thousands, except per share data) | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| | | (a) | | | (b) | | | (c) | | | (d) | | | (e) | |
Statements of Income Data: | | | | | | | | | | | | | | | | | | | | |
Revenue | | $ | 5,062,528 | | | $ | 4,122,930 | | | $ | 3,269,862 | | | $ | 2,469,881 | | | $ | 2,047,942 | |
Cost of goods sold | | | 2,987,126 | | | | 2,398,790 | | | | 1,877,869 | | | | 1,376,401 | | | | 1,120,129 | |
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Gross margin | | | 2,075,402 | | | | 1,724,140 | | | | 1,391,993 | | | | 1,093,480 | | | | 927,813 | |
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Operating income | | | 530,180 | | | | 437,953 | | | | 361,483 | | | | 297,877 | | | | 231,448 | |
Other (income) expense | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | 51,184 | | | | 31,429 | | | | 24,307 | | | | 29,765 | | | | 32,252 | |
Other (income) expense, net | | | 3,169 | | | | (2,643 | ) | | | 1,405 | | | | (2,013 | ) | | | (6,121 | ) |
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Income from continuing operations before provision for income taxes | | | 475,827 | | | | 409,167 | | | | 335,771 | | | | 270,125 | | | | 205,317 | |
Provision for income taxes | | | 164,204 | | | | 147,942 | | | | 125,507 | | | | 103,007 | | | | 78,180 | |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 311,623 | | | $ | 261,225 | | | $ | 210,264 | | | $ | 167,118 | | | $ | 127,137 | |
| | | | | | | | | | | | | | | | | | | | |
Basic earnings per share from continuing operations | | $ | 1.04 | | | $ | 0.88 | | | $ | 0.72 | | | $ | 0.58 | | | $ | 0.45 | |
Diluted earnings per share from continuing operations | | $ | 1.02 | | | $ | 0.87 | | | $ | 0.71 | | | $ | 0.57 | | | $ | 0.44 | |
Weighted average shares outstanding-basic | | | 299,574 | | | | 295,810 | | | | 292,252 | | | | 286,542 | | | | 281,082 | |
Weighted average shares outstanding-diluted | | | 304,131 | | | | 300,693 | | | | 296,750 | | | | 291,714 | | | | 287,980 | |
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
Other Financial Data: | | | | | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | $ | 428,056 | | | $ | 206,190 | | | $ | 211,772 | | | $ | 159,183 | | | $ | 164,002 | |
Net cash used in investing activities | | | (505,606 | ) | | | (352,534 | ) | | | (571,607 | ) | | | (191,583 | ) | | | (102,494 | ) |
Net cash provided by (used in) financing activities | | | 165,941 | | | | 157,072 | | | | 311,411 | | | | 18,962 | | | | (33,165 | ) |
Capital expenditures | | | 90,186 | | | | 88,255 | | | | 86,416 | | | | 61,438 | | | | 55,870 | |
Business acquisitions(f) | | | 408,384 | | | | 265,336 | | | | 486,934 | | | | 143,578 | | | | 65,171 | |
Depreciation and amortization | | | 86,463 | | | | 70,165 | | | | 54,505 | | | | 41,428 | | | | 38,062 | |
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 4,518,774 | | | $ | 3,723,456 | | | $ | 3,199,704 | | | $ | 2,299,509 | | | $ | 2,020,121 | |
Working capital | | | 1,121,864 | | | | 896,407 | | | | 752,042 | | | | 611,555 | | | | 526,125 | |
Long-term obligations, including current portion | | | 1,305,781 | | | | 1,118,478 | | | | 956,076 | | | | 600,954 | | | | 603,045 | |
Stockholders’ equity | | | 2,350,745 | | | | 1,964,094 | | | | 1,644,085 | | | | 1,414,161 | | | | 1,179,434 | |
(a) | Includes the results of operations of Sator Beheer B.V. from its acquisition effective May 1, 2013 and 19 other businesses from their respective acquisition dates in 2013. Our 2013 results include a loss on debt extinguishment of $2.8 million related to our execution of a new senior secured credit facility on May 3, 2013. Also in 2013, we recorded a net $2.5 million loss on adjustments to contingent consideration liabilities, which is included in Other expense, net. |
(b) | Includes the results of operations of 30 businesses from their respective acquisition dates in 2012. Our 2012 results include gains totaling $17.9 million, which are included in Cost of goods sold, resulting from lawsuit settlements with certain of our aftermarket product suppliers. Also in 2012, we recorded a net $1.6 million loss on adjustments to contingent consideration liabilities, which is included in Other income, net. |
(c) | Includes the results of operations of Euro Car Parts Holdings Limited from its acquisition effective October 1, 2011 and 20 other businesses from their respective acquisition dates in 2011. Our 2011 results include a loss on debt extinguishment of $5.3 million related to our execution of a new senior secured credit facility on March 25, 2011. Also in 2011, we recorded a net $1.4 million gain on adjustments to contingent consideration liabilities. The loss on debt extinguishment and adjustment to contingent consideration liabilities are included in Other expense, net. |
(d) | Includes the results of operations of 20 businesses from their respective acquisition dates in 2010. |
(e) | Includes the results of operations of Greenleaf Auto Recyclers, LLC (“Greenleaf”) from its acquisition on October 1, 2009 and seven other businesses from their respective acquisition dates in 2009. We recorded a gain on bargain purchase for the Greenleaf acquisition totaling $4.3 million, which is included in Other income, net. |
(f) | Includes cash paid for acquisitions, net of cash acquired. |
cash-on-hand.
DESCRIPTION OF CERTAIN INDEBTEDNESS
Euro Notes (2024)
On April 14, 2016, LKQ Italia Bondco S.p.A. (“LKQ Italia”), our indirect, wholly owned subsidiary, completed an offering of €500 million aggregate principal amount of 3.875% senior notes due April 1, 2024 (the “Euro Notes (2024)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act. The proceeds from the offering were used to repay a portion of the revolver borrowings under the Prior Credit Agreement (as defined below) and to pay related fees and expenses. The Euro Notes (2024) are governed by the Indenture dated as of April 14, 2016 (the “Euro Notes (2024) Indenture”) among LKQ Italia, us and certain of our subsidiaries (the “Euro Notes (2024) Subsidiaries”), the trustee, and the paying agent, transfer agent, and registrar.
Interest on the Euro Notes (2024) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2024) are fully and unconditionally guaranteed by us and the Euro Notes (2024) Subsidiaries (the “Euro Notes (2024) Guarantors”).
The Euro Notes (2024) and the related guarantees are, respectively, LKQ Italia’s and each Euro Notes (2024) Guarantor’s senior unsecured obligations and are subordinated to all of LKQ Italia’s and the Euro Notes (2024) Guarantors’ existing and future secured debt to the extent of the lesser of the debt secured by such assets and the value of the assets securing that secured debt. In addition, the Euro Notes (2024) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2024). The Euro Notes (2024) have been listed on the ExtraMOT, Professional Segment of the Borsa Italia S.p.A. securities exchange and the Global Exchange Market of Euronext Dublin.
Prior to January 1, 2024, the Euro Notes (2024) are redeemable, in whole or in part, at any time at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make whole” premium. On or after January 1, 2024, we may redeem some or all of the Euro Notes (2024) at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. We may be required to make an offer to purchase the Euro Notes (2024) upon the sale of certain assets, subject to certain exceptions (including S&P and Moody’s downgrades its ratings below investment grade), and upon a change of control. In addition, in the event of certain developments affecting taxation or under certain other circumstances which, in any case, require the payment of certain additional amounts, we may redeem the Euro Notes (2024) in whole, but not in part, at any time at a redemption price of 100% of the principal amount thereof plus accrued but unpaid interest, if any, and such certain additional amounts, if any, to the redemption date.
On May 31, 2022, Moody’s Investors Services upgraded the rating on LKQ Italia’s senior unsecured notes to Baa3 with a stable outlook. This rating upgrade, combined with the upgrade to BBB- by S&P Global Ratings in April 2022, triggered a “covenant suspension event” for purposes of the Euro Notes (2024) Indenture, and LKQ Italia and the Euro Notes (2024) Guarantors (including us) will no longer be required to comply with certain restrictive covenants set forth in the Euro Notes (2024) Indenture unless Moody’s or S&P withdraws its investment grade rating on the Euro Notes (2024) or downgrades its rating on the Euro Notes (2024) below investment grade.
Euro Notes (2026/2028)
On April 9, 2018, LKQ European Holdings B.V. (“LKQ Euro Holdings”), our wholly owned subsidiary, completed an offering of €1,000 million aggregate principal amount of senior notes. The offering consisted of €750 million aggregate principal amount of 3.625% senior notes due 2026 (the “Euro Notes (2026)”) and €250 million aggregate principal amount of 4.125% senior notes due 2028 (the “Euro Notes (2028)” and, together with the Euro Notes (2026), the “Euro Notes (2026/28)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act. The proceeds from the offering, together with borrowings under our Prior Credit Agreement, were used (i) to finance a portion of the consideration paid for the Stahlgruber acquisition, (ii) for general corporate purposes and (iii) to pay related fees and expenses, including the refinancing of net financial debt. The Euro Notes (2026/28) are governed by the Indenture dated as of April 9, 2018 (the “Euro Notes (2026/28) Indenture”) among LKQ Euro Holdings, us and certain of our subsidiaries (the “Euro Notes (2026/28) Subsidiaries”), the trustee, paying agent, transfer agent, and registrar identified in the Euro Notes (2026/28) Indenture.
On April 1, 2021, we redeemed the Euro Notes (2026) at a redemption price equal to 101.813% of the principal amount of the Euro Notes (2026) plus accrued and unpaid interest thereon to, but not including, April 1, 2021. The total redemption payment was $915 million (€777 million), including an early redemption premium of $16 million (€14 million) and accrued and unpaid interest of $16 million (€14 million). In the second quarter of 2021, we recorded a loss on debt extinguishment of $24 million related to the redemption due to the early redemption premium and the write-off of the unamortized debt issuance costs.
Interest on the Euro Notes (2028) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2028) are fully and unconditionally guaranteed by us and the Euro Notes (2026/28) Subsidiaries (the “Euro Notes (2028) Guarantors”).
The Euro Notes (2028) and the related guarantees are, respectively, LKQ Euro Holdings’ and each Euro Notes (2028) Guarantor’s senior unsecured obligations and will be subordinated to all of LKQ Euro Holdings’ and the Euro Notes (2028) Guarantors’ existing and future secured debt to the extent of the lesser of the debt secured by such assets and the value of the assets securing that secured debt. In addition, the Euro Notes (2028) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2028). The Euro Notes (2028) are listed on the Global Exchange Market of Euronext Dublin.
The Euro Notes (2028) are redeemable, in whole or in part, at any time at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date and a “make whole” premium. On or after April 1, 2023, we may redeem some or all of the Euro Notes (2028) at the applicable redemption prices set forth in the Euro Notes (2026/28) indenture. We may be required to make an offer to purchase the Euro Notes (2028) upon the sale of certain assets, subject to certain exceptions (including Moody’s and S&P rating the Euro Notes (2028) investment grade), and upon a change of control. In addition, in the event of certain developments affecting taxation or under certain other circumstances which, in any case, require the payment of certain additional amounts, we may redeem the Euro Notes (2028) in whole, but not in part, at any time at a redemption price of 100% of the principal amount thereof, plus accrued but unpaid interest, if any, and such certain additional amounts, if any, to the redemption date.
On May 31, 2022, Moody’s Investors Services upgraded the rating on LKQ Euro Holdings’ senior unsecured notes to Baa3 with a stable outlook. This rating upgrade, combined with the upgrade to BBB- by S&P Global Ratings in April 2022, triggered a “covenant suspension event” for purposes of the Euro Notes (2026/28) Indenture, and the Euro Notes (2028) Guarantors (including us) will no longer be required to comply with certain restrictive covenants set forth in the Euro Notes (2026/28) Indenture unless Moody’s or S&P withdraws its investment grade rating on the Euro Notes (2028) or downgrades its rating on the Euro Notes (2028) below investment grade.
Senior
SecuredUnsecured Credit
FacilityGeneral
Agreement
On
March 25, 2011, weJanuary 5, 2023, LKQ and certain subsidiaries of LKQ (collectively, the “Credit Agreement Borrowers”) entered into
athe credit agreement,
dated January 5, 2023 (the "Senior Unsecured Credit Agreement"), with
the several lenders from time to time party thereto,
as Lenders (the “Credit Agreement Lenders”); Wells Fargo Bank,
National Association, as administrative
agent,agent; Bank of America,
N.A., as syndication
agent, Theagent; PNC Bank,
of Tokyo-Mitsubishi UFJ, Ltd.National Association, Truist Bank and
RBS Citizens, N.A.,MUFG Bank, as
co-documentation agents,Documentation Agents; and Wells Fargo Securities, LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, TheBofA Securities, Inc., PNC Capital Markets LLC, Truist Securities, Inc. and MUFG Bank,
of Tokyo-Mitsubishi UFJ, Ltd. and RBS Citizens, N.A., as joint
lead arrangersbookrunners and joint
bookrunners,lead arrangers. The Senior Unsecured Credit Agreement replaced the Company’s senior secured credit agreement ("Prior Credit Agreement"), which was
amended and restatedscheduled to mature on
September 30, 2011 and May 3, 2013 (as amended, the “Credit Agreement”).Size and Tenor
January 29, 2024.
The Senior Unsecured Credit Agreement provides for borrowings up to $1.8 billion, consisting of (1) a $1.35 billionincludes an unsecured revolving credit facility (the “Revolving Credit Facility”) and (2) a $450 million term loan facility (the “Term Loan Facility”). Under the Revolving Credit Facility, we are permitted to drawof up to the United Statesa U.S. dollar equivalent of $1.2$2.0 billion, in Canadian dollars, pounds sterling, euros, and other agreed-upon currencies. The Credit Agreement also provideswhich includes a $150 million sublimit for (a) the issuance of up to $150 million of letters of credit under theand a $150 million sublimit for swing line loans (the “Credit Agreement Revolving Credit Facility in agreed-upon currencies, (b) the issuanceLoans”) and an unsecured term loan facility of up to $50$500 million (the “Credit Agreement Term Loan” and collectively with the Credit Agreement Revolving Loans, the “Credit Agreement Loans”). Under the Senior Unsecured Credit Agreement, the Credit Agreement Revolving Loans have a maturity date of January 5, 2028, and the Credit Agreement Term Loan has a maturity date of January 5, 2026. The maturity date of the Credit Agreement Revolving Loans can be extended for up to two years in one-year increments. The maturity date of the Credit Agreement Term Loan can be extended for one year. The Credit Agreement Term Loan has no required amortization payments prior to its maturity date. The Senior Unsecured Credit Agreement allows for additional revolving credit facility capacity and/or additional term loans at the greater of $750 million or 50% of our EBITDA (as calculated in accordance with the terms of the Senior Unsecured Credit Agreement) for the prior four quarters. Proceeds of the Credit Agreement Loans may be used (i) to refinance certain existing indebtedness of LKQ and its subsidiaries and (ii) for general corporate purposes of LKQ and its subsidiaries in the ordinary course of business, including acquisitions and capital expenditures.
The Credit Agreement Borrowers will pay a commitment fee (the “Credit Agreement Commitment Fee”) on the daily amount of unutilized Credit Agreement Revolving Loan commitments based on our debt rating and total leverage ratio. The Credit Agreement Borrowers will also pay a variable rate of interest on outstanding Credit Agreement Loans based on our debt rating and total leverage ratio and the currency in which the Credit Agreement Loans are borrowed. The Credit Agreement Term Loan will be borrowed in U.S. dollars. Credit Agreement Revolving Loans is borrowed in U.S. dollars, Euros, Australian dollars, Canadian dollars, Mexican pesos, Norwegian krone, pounds sterling, Swedish krona and Swiss francs. The Credit Agreement Borrowers may also make borrowings in other currencies agreed to by Wells Fargo Bank and the Credit Agreement Lenders.
The interest rate applicable to Credit Agreement Loans (other than swing line loans underloans) denominated in U.S. dollars may be (i) a forward-looking term rate based on SOFR for an interest period chosen by the Revolving Credit Facility,Agreement Borrowers of one, three or six months plus 0.10% per annum plus the Term SOFR Spread (as defined in the Senior Unsecured Credit Agreement) or (ii) an Alternate Base Rate plus the ABR Spread (as defined in the Senior Unsecured Credit Agreement). “Alternate Base Rate” on any day means the highest of (a) the prime rate announced from time to time by Wells Fargo Bank, (b) the federal funds effective rate plus 0.50% and (c) the opportunity to increase the amountsum of the Revolving Credit Facility or obtain incremental
forward-looking term
loans up to $400 million. Outstanding letters of credit and swingrate based on SOFR for a one-month period plus 1.00%. Swing line loans
are taken into account when determining availability under the Revolving Credit Facility.Interest Rates and Fees
Borrowings under the Credit Agreementdenominated in U.S. dollars will bear interest at variablethe Alternate Base Rate plus the ABR Spread.
The interest rate for Credit Agreement Loans denominated in currencies other than U.S. dollars will be based on other risk-free interest rates that are applicable for that currency plus a spread which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrearswill apply depending on the type of borrowing. Including the effect of our interest rate swap agreements,applicable to such Credit Agreement Loans. Some risk-free interest rates are forward-looking rates and some are daily rates, as set forth in the weighted averageSenior Unsecured Credit Agreement. All risk-free interest rate on borrowings outstanding againstrates applicable to the Credit Agreement at December 31, 2013 was 3.05%Loans have a floor which prevents any rate from being less than 0.00% plus the applicable spread for that Credit Agreement Loan.
The spreads applicable to the Credit Agreement Loans are the Term SOFR Spread, Eurocurrency Rate Spread, RFR Spread, ABR Spread and Canadian Prime Rate Spread (each as defined in the Senior Unsecured Credit Agreement). We also pay a commitment fee based on the average daily unused amountEach of the RevolvingTerm SOFR Spread, Eurocurrency Rate Spread and RFR Spread ranges from 1.125% to 1.75%, and each of the ABR Spread and Canadian Prime Rate Spread ranges from 0.125% to 0.750%. The Credit Facility. The commitment fee is subjectAgreement Commitment Fee payable by the Credit Agreement Borrowers ranges from 0.100% to change0.275%, in increments of 0.05% depending on our net leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rateeach case based on our nettotal leverage ratio as well as a fronting feeset forth in our most recent financials or our then current applicable debt rating. As of 0.125% to the issuing bank, which are due quarterly in arrears. Borrowings undereffective date of the Senior Unsecured Credit Agreement, totaled $672.6 million at December 31, 2013,each of which $22.5 millionthe Term SOFR Spread, Eurocurrency Rate Spread and RFR Spread was classified as current maturities. As1.250%, each of December 31, 2013, there were letters of credit outstanding in the aggregate amount of $45.6 million. The amounts available underABR Spread and Canadian Prime Rate Spread was 0.250% and the Revolving Credit Facility are reduced by the amounts outstanding under letters of credit, and thus availability on the Revolving Credit Facility at December 31, 2013Commitment Fee was $1,070.6 million. In connection with the closing0.125%.
Certain of our
acquisition of Keystone Specialty on January 3, 2014, we increased our borrowings under the Revolving Credit Facility by $370 million.Security and Guarantees
The obligations under the Credit Agreement are unconditionally guaranteed by our direct and indirectwholly owned U.S. domestic subsidiaries and certain foreign subsidiaries. Obligations under the Credit Agreement, including the related guarantees, are collateralized by a security interest and lien on a majority of the existing and future personal property of, and a security interest in 100% of our equity interest in, each of our existing and future direct and indirect domestic and foreign subsidiaries, provided that if a pledge of 100% of a foreign subsidiary’s voting equity interests gives rise to an adverse tax consequence, such pledge shall be limited to 65% of the voting equity interest of the first tier foreign subsidiary. In the event that we obtain and maintain certain ratings from S&P (BBB- or better, with stable or better outlook) or Moody’s (Baa3 or better, with stable or better outlook), and upon our request, the security interests in and liens on the collateral described above shall be released.
Amortization
Amounts under the Revolving Credit Facility are due and payable upon maturityguarantors of the Credit Agreement in May 2018. AmountsBorrowers’ obligations under the Term Loan Facility are due and payable on the last day of each of our fiscal quarters ending on or after September 30, 2013, in the aggregate principal amount equal to approximately $5.6 million. The remaining balance under the Term Loan Facility is due and payable on the maturity date of theSenior Unsecured Credit Agreement. We are required to prepay the Term Loan Facility by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty.
Covenants
The Senior Unsecured Credit Agreement contains customary covenants for an unsecured credit facility for a company that provide limitations and conditionshas debt ratings that are investment grade. For instance, unlike the Prior Credit Agreement, the Senior Unsecured Credit Agreement does not contain covenants limiting dividends or investments (other than intercompany loans). The Senior Unsecured Credit Agreement contains limits on our and our subsidiaries’ ability to among other things (i) incur indebtedness, except for certain exclusions such as borrowings on a permitted receivables facility up to $200 million, (ii) incur liens (iii) enter into any merger, consolidation, amalgamation, or otherwise liquidate or dissolveand indebtedness, but these restrictions on liens and indebtedness have been changed from the Company, (iv) dispose of certain property, (v) make dividend payments, repurchase our stock, or enter into derivative contracts indexed to the value of our common stock, (vi) make certain investments, including the acquisition of assets constituting a business or the stock of a business designated as a non-guarantor, (vii) make optional prepayments of subordinated debt, (viii) enter into sale-leaseback transactions, (ix) issue preferred stock, redeemable stock, convertible stock or other similar equity instruments, and (x) enter into hedge agreements for speculative purposes or otherwise notcomparable restrictions in the ordinary course of business.Prior Credit Agreement. The Senior Unsecured Credit Agreement also contains financial and affirmative covenants under which we (i) may not exceedrequires compliance with a maximum nettotal leverage ratio of 3.50 to 1.00, except in connection with permitted acquisitions with aggregate consideration in excess of $200 million during any period of four consecutive fiscal quarters in which case the maximum net leverage ratio may increase to 4.00 to 1.00 for the subsequent four fiscal quarters and (ii) are required to maintain a minimum interest coverage ratio, each calculated in accordance with the terms of 3.00 to 1.00. We were in compliancethe Senior Unsecured Credit Agreement.
In connection with
all restrictive covenants underentry into the
Senior Unsecured Credit Agreement
described above, that certain Fourth Amended and Restated Credit Agreement dated as of
December 31, 2013.EventsJanuary 29, 2016, by and among us and certain of Default
The Credit Agreement contains events of default that include (i) our failure to pay principal when due or interest, fees, or other amounts after grace periods, (ii) our material breach of any representation or warranty, (iii) covenant defaults, (iv) cross defaults to certain other indebtedness, (v) bankruptcy, (vi) certain ERISA events, (vii) material judgments, (viii) change of control,subsidiaries, as the borrowers, Wells Fargo Bank, as the Administrative Agent for the lenders, and (ix) failure of subordinated indebtedness to be validlythe various lenders party thereto, and sufficiently subordinated.
Receivables Securitization Facility
General
each amendment thereto, was terminated on January 5, 2023.
CAD Note
On September 28, 2012,March 27, 2023, we entered into a new term loan credit agreement (the “CAD Note”) with several lenders from time to time party thereto as Lenders; Wells Fargo Bank, as administrative agent; Bank of America, as syndication agent; Capital One, N.A., MUFG Bank, PNC Bank, National Association and Truist Bank as documentation agents; and BofA Securities, Inc., Wells Fargo Securities, LLC, Capital One, N.A., MUFG Bank, PNC Capital Markets LLC and Truist Securities, Inc. as joint bookrunners and joint lead arrangers.
The CAD Note includes an unsecured term loan facility of up to CAD 700 million. The term loan (the “CAD Term Loan”) funded under the CAD Note will mature three year receivables securitization facility (the “Receivables Facility”) pursuantyears from the date of funding of the CAD Term Loan. The CAD Note does not require any amortization payments prior to the maturity date.
The proceeds of the CAD Term Loan may only be used (i) to finance a portion of the aggregate cash consideration of the Uni-Select Acquisition, (ii) to refinance certain outstanding debt of Uni-Select and (iii) to pay fees, costs and expenses related to the transactions contemplated by the CAD Note. The CAD Term Loan was funded one business day prior to the effectiveness of the Uni-Select Acquisition (which occurred on August 1, 2023).
We will pay a commitment fee, which shall accrue at 0.175% per annum on the daily amount of unutilized commitments during the period from and after the date that is the later of (i) May 26, 2023 and (ii) the Effective Date to, but excluding, the earlier of (i) the Funding Date and (ii) the Termination Date (each as defined in the CAD Note).
The CAD Term Loan was borrowed in Canadian dollars on the Funding Date, which was July 31, 2023. The interest rate applicable to the CAD Term Loan may be (i) a Receivables Sale Agreement (the “RSA”)forward-looking term rate based on the rate applicable to Canadian Dollar bankers’ acceptances for an interest period chosen by us of one or three months or (ii) the Canadian Prime Rate (as defined in the CAD Note), among certain subsidiariesplus in each case a spread based on our debt rating and total leverage ratio. The spreads applicable to the CAD Term Loan are the Eurocurrency Rate Spread and Canadian Prime Rate Spread (each as described in the CAD Note). The Eurocurrency Rate Spread ranges from 1.125% to 1.75%, and the Canadian Prime Rate Spread ranges from 0.125% to 0.750%. The risk-free interest rates applicable to the CAD Term Loan have a floor which prevents the rate from being less than 0.00% plus the spread for the CAD Term Loan.
Certain of LKQ, as “Originators,” and LKQ Receivables Finance Company, LLC (“LRFC”), aour wholly owned bankruptcy-remote special purpose subsidiaryU.S. domestic subsidiaries are guarantors of LKQ, as Buyerour obligations under the CAD Note. The CAD Note contains customary covenants for an unsecured credit facility for a company that has debt ratings that are investment grade. Accordingly, the CAD Note does not contain covenants limiting dividends or investments (other
than intercompany loans). The CAD Note does, however, contain limits on our and (ii)our subsidiaries’ ability to incur liens and indebtedness. The CAD Note also requires compliance with a Receivables Purchase Agreement (the “RPA”) among LRFC, as Seller, LKQ, as Servicer, certain conduit investorstotal leverage ratio and the Bank of Tokyo Mitsubishi UFJ, Ltd. (“BTMU”), as Administrative Agent, Managing Agent and Financial Institution. Underinterest coverage ratio, each calculated in accordance with the terms of the RSA, the Originators sell at a discount or contribute certainCAD Note.
Other Long-Term Obligations
Other long-term obligations totaling $86 million and $73 million as of
their trade accounts receivable, related collectionsJune 30, 2023 and
security interests (the “Receivables”) to LRFC on a revolving basis. Under the termsDecember 31, 2022, respectively, consist of
the RPA, LRFC sells to BTMU for the benefit of the conduit investors and/or financial institutions (together with BTMU, the “Purchasers”) an undivided ownership interest in the Receivables for up to $80 million in cash proceeds, subject to additional Incremental Purchases, as defined in the RPA, which may increase the maximum amount of aggregate investments made by the Purchasers.notes payable, finance lease obligations, and other debt. The
proceeds from the Purchasers’ initial investment of $77.3 million were used to finance LRFC’s initial purchase from the Originators, and the proceeds from LRFC’s initial purchase from the Originators were used to repay outstanding borrowings under the Revolving Credit Facility. Upon payment of the Receivables by customers, rather than remitting to BTMU the amounts collected, LRFC has reinvested and will reinvest such Receivables payments to purchase additional Receivables from the Originators, subject to the Originators generating sufficient eligible Receivables to sell to LRFC in replacement of collected balances. LRFC may also use the proceeds from a subordinated loan made by the Originators to LRFC to finance purchases of the Receivables from the Originators. Because the Receivables are held by LRFC, a separate bankruptcy-remote corporate entity, the Receivables will be available first to satisfy the creditors of LRFC, including the Purchasers. At the end of the initial three year term, the financial institutions may elect to renew their commitments under the RPA.Accounting Treatment
The sale of the ownership interest in the Receivables is accounted for as a secured borrowing on our Consolidated Balance Sheets, under which the Receivables collateralize the amounts invested by the Purchasers.
Under the RPA, we pay variableweighted average interest rates plus a margin on the other long-term obligations outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) LIBOR rates plus 1.25%, or (iii) base rates,at June 30, 2023 and are payable monthly in arrears. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. There were no borrowings outstanding under the Receivables Facility as of December 31, 2013. In connection with the closing of our acquisition of Keystone Specialty on January 3, 2014, we increased our borrowings under the Receivables Facility to the maximum amount of $80 million.
Covenants & Defaults
The RPA contains customary covenants, including covenants to preserve the bankruptcy remote status of LRFC. The RPA also contains customary default2022 were 4.1% and termination provisions that provide for acceleration of amounts owed under the RPA upon the occurrence of certain specified events with respect to LRFC, the Originators or LKQ, including, but not limited to, (i) LRFC’s failure to pay interest and other amounts due, (ii) failure by LRFC, the Originators, or LKQ to pay certain indebtedness, (iii) certain insolvency events with respect to LRFC, the Originators or LKQ, (iv) certain judgments entered against LRFC, the Originators or LKQ, (v) certain liens filed with respect to the assets of LRFC or the Originators, and (vi) breach of certain financial ratios designed to capture events negatively affecting the overall credit quality of the Receivables securing amounts invested by the Purchasers.
3.4%, respectively.
Purpose of the Exchange Offer
In connection with the sale of the original notes on May
9, 2013,24, 2023, we, the subsidiary guarantors and the initial purchasers entered into a registration rights agreement. Pursuant to the registration rights agreement, we and the subsidiary guarantors agreed to file with the SEC a registration statement on the appropriate form under the Securities Act with respect to publicly registered notes having
substantially identical terms to the original notes. Upon the effectiveness of the
exchange offer registration statement
of which this prospectus is a part, we and the guarantors will, pursuant to the exchange offer, offer to the holders of the original notes who are able to make certain representations the opportunity to exchange their notes for the exchange notes. We also agreed to file a shelf registration statement under certain circumstances.
If we and the guarantors fail to complete the exchange offer, or the shelf registration statement, if required by the terms of the registration rights agreement, does not become effective, in each case, within 365 days of the date of original issuance of the
original notes, or by May
9, 2014,24, 2024, or the shelf registration statement, if required by the terms of the registration rights agreement, is declared effective but thereafter ceases to be effective or the prospectus contained therein ceases to be usable in connection with resales of the original notes during the periods specified in the registration rights agreement, then we will pay additional interest to each holder of the original notes, with respect to the first 90-day period immediately following the occurrence of the first registration default in an amount equal to
one-quarter of one percent (0.25%)0.25% per annum on the principal amount of the original notes held by such holder. The amount of the additional interest will increase by an additional
one-quarter of one percent (0.25%)0.25% per annum on the principal amount of original notes with respect to each subsequent 90-day period until all registration defaults have been cured, up to a maximum amount of additional interest for all registration defaults of 1.0% per annum. There can only exist one registration default at any one time. Following the cure of all registration defaults, the accrual of additional interest will cease.
Each broker-dealer that receives the exchange notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”
A copy of the registration rights agreement is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part.
Terms of the Exchange Offer
We and the guarantors are offering to exchange an aggregate principal amount of up to
$800.0 million of the 2028 exchange notes and $600.0 million of
2033 exchange notes,
in each case, and guarantees thereof for a like aggregate principal amount of
2028 original notes
and 2033 original notes, in each case, and guarantees thereof. The form and terms of the exchange notes are the same as the form and the terms of the original notes, except that the exchange notes:
•will have been registered under the Securities Act;
•will not bear the restrictive legends restricting their transfer under the Securities Act; and
•will not contain the registration rights and additional interest provisions contained in the original notes.
The exchange notes evidence the same debt as the original notes exchanged for the exchange notes and will be entitled to the benefits of the same indenture under which the original notes were issued, which is governed by New York law. For a complete description of the terms of the exchange notes, see “Description of the Exchange Notes.” We will not receive any cash proceeds from the exchange offer.
The exchange offer is not extended to holders of original notes in any jurisdiction where the exchange offer would not comply with the securities or blue sky laws of that jurisdiction.
As of the date of this prospectus, $800.0 million aggregate principal amount of 2028 original notes and $600.0 million aggregate principal amount of 2033 original notes isare outstanding and registered in the name of the Depository Trust Company (“DTC”)DTC or its nominee. Only registered holders of the original notes, or their legal representatives and attorneys-in-fact, as reflected on the records of the trustee under the indenture governing the original notes, may participate in the exchange offer. We and the guarantors will not set a fixed record date for determining registered holders of the original notes entitled to participate in the exchange offer. This prospectus, together with the letter of transmittal, is
being sent to all registered holders of original notes and to others believed to have beneficial interests in the original notes.
This prospectus and the accompanying letter of transmittal together constitute the exchange offer. Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange original notes
of each series, which are properly tendered on or before the expiration date and are not withdrawn as permitted below, for
a like principal amount of exchange
notes.notes of such series. The expiration date for this exchange offer is 5:00 p.m., New York City time, on ,
2014,2023, or such later date and time to which we, in our sole discretion, extend the exchange offer.
Notes tendered in the exchange offer must be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Neither we nor any of the guarantors, our or their respective boards of directors or our or their management recommends that you tender or not tender original notes in the exchange offer or has authorized anyone to make any recommendation. You must decide whether to tender original notes in the exchange offer and, if you decide to tender, the aggregate amount of original notes to tender. We intend to conduct the exchange offer in accordance with the applicable requirements of the
Securities Exchange Act
of 1934 (the "Exchange Act") and the rules and regulations of the SEC promulgated under the Exchange Act.
We expressly reserve the right, in our sole discretion:
•to extend the expiration date;
•to delay accepting any original notes due to an extension of the exchange offer;
•if any condition set forth below under “—Conditions to the Exchange Offer” has not been satisfied, to terminate the exchange offer and not accept any original notes for exchange; or
•to amend the exchange offer in any manner.
We will give oral or written notice of any extension, delay, non-acceptance, termination or amendment as promptly as practicable by a public announcement, and in the case of an extension, no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The notice of extension will disclose the aggregate principal amount of the original notes that have been tendered as of the date of such notice. Without limiting the manner in which we may choose to make a public announcement of any extension, delay, non-acceptance, termination or amendment, we shall have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency, which may be an agency controlled by us. Notwithstanding the foregoing, in the event of a material change in the exchange offer, including our waiver of a material condition, we will extend the exchange offer period if necessary so that at least five business days remain in the exchange offer following notice of the material change.
During an extension, all original notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any original notes not accepted for exchange for any reason will be returned without cost to the holder that tendered them promptly after the expiration or termination of the exchange offer.
How to Tender Original Notes for Exchange
When the holder of original notes tenders, and we accept such notes for exchange pursuant to that tender, a binding agreement between us and the tendering holder is created, subject to the terms and conditions set forth in this prospectus and the accompanying letter of transmittal. Except as set forth below, a holder of original notes who wishes to tender such notes for exchange must, on or prior to the expiration date:
•transmit a properly completed and duly executed letter of transmittal, including all other documents required by such letter of transmittal, to U.S. Bank Trust Company, National Association, which will act as the exchange agent, at the address set forth below under the heading “—The Exchange Agent”;Agent;”
•comply with DTC’s Automated Tender Offer Program, or ATOP, procedures described below; or
•if original notes are tendered pursuant to the book-entry procedures set forth below, the tendering holder must transmit an agent’s message to the exchange agent as per the procedures of DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear system, or Euroclear, or Clearstream Banking S.A., or Clearstream (as appropriate).
•the exchange agent must receive the certificates for the original notes and the letter of transmittal;
•the exchange agent must receive, prior to the expiration date, a timely confirmation of the book-entry transfer of the original notes being tendered, along with the letter of transmittal or an agent’s message; or
•the holder must comply with the guaranteed delivery procedures described below.below.
The term “agent’s message” means a message, transmitted to DTC, Euroclear or Clearstream, as appropriate, and received by the exchange agent and forming a part of a book-entry transfer, or “book-entry confirmation,” which states that DTC, Euroclear or Clearstream, as appropriate, has received an express acknowledgement that the tendering holder agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against such holder.
We will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a letter of transmittal or by causing the transmission of an agent’s message, waives any right to receive any notice of the acceptance of such tender.
Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible institution unless the original notes surrendered for exchange are tendered:
•by a registered holder of the original notes; or
•for the account of an eligible institution.
An “eligible institution” is a firm which is a member of a registered national securities exchange or a member of the Financial Industry Regulatory Authority or a commercial bank or trust company having an office or correspondent in the United States.
If original notes are registered in the name of a person other than the signer of the letter of transmittal, the original notes surrendered for exchange must be endorsed by, or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us in our sole discretion, duly executed by, the registered holder with the holder’s signature guaranteed by an eligible institution.
We will determine all questions as to the validity, form, eligibility (including time of receipt) and acceptance of original notes tendered for exchange in our sole discretion. Our determination will be final and binding. We reserve the absolute right to:
•reject any and all tenders of any original note improperly tendered;
•refuse to accept any original note if, in our judgment or the judgment of our counsel, acceptance of the original note may be deemed unlawful; and
•waive any defects or irregularities or conditions of the exchange offer as to any particular original note based on the specific facts or circumstance presented either before or after the expiration date, including the right to waive the ineligibility of any holder who seeks to tender original notes in the exchange offer.
Notwithstanding the foregoing, we do not expect to treat any holder of original notes differently from other holders to the extent they present the same facts or circumstances.
Our interpretation of the terms and conditions of the exchange offer as to any particular original notes either before or after the expiration date, including the letter of transmittal and the instructions to it, will be final and binding on all parties. Holders must cure any defects and irregularities in connection with tenders of notes for exchange within such reasonable period of time as we will determine, unless we waive such defects or irregularities. Neither we, the exchange agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of original notes for exchange, nor shall any of us incur any liability for failure to give such notification.
If a person or persons other than the registered holder or holders of the original notes tendered for exchange signs the letter of transmittal, the tendered original notes must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered holder or holders appear on the original notes.
If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity sign the letter of transmittal or any original notes or any power of attorney, these persons should so indicate when signing, and you must submit proper evidence satisfactory to us of those persons’ authority to so act unless we waive this requirement.
By tendering, each holder will represent to us: that such holder acquiring exchange notes in the exchange offer is acquiring them in the ordinary course of its business; at the time of the commencement of the exchange offer it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes issued in the exchange offer in violation of the provisions of the Securities Act; it is not an “affiliate,” as defined under Rule 405 of the Securities Act, of us or any guarantor; and if such holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the exchange notes.
If any holder or any other person receiving exchange notes from such holder is an “affiliate,” as defined under Rule 405 of the Securities Act, of us, or is engaged in or intends to engage in or has an arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the notes to be acquired in the exchange offer in violation of the provisions of the Securities Act, the holder or any other person:
•may not rely on applicable interpretations of the staff of the SEC; and
•must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.
Each broker-dealer who acquired its original notes as a result of market-making activities or other trading activities, and thereafter receives exchange notes issued for its own account in the exchange offer, must represent to us and acknowledge that it will provide us with information we reasonably request and comply with the applicable provisions of the Securities Act (including, but not limited to, delivering this prospectus in connection with any resale of such exchange notes issued in the exchange offer). 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” for a discussion of the exchange and resale obligations of broker-dealers.
Acceptance of Original Notes for Exchange; Delivery of Exchange Notes Issued in the Exchange Offer
Upon satisfaction or waiver of all the conditions to the exchange offer, we will accept, promptly after the expiration date, all original notes properly tendered and will issue exchange notes registered under the Securities Act in exchange for the tendered original notes. For purposes of the exchange offer, we shall be deemed to have accepted properly tendered original notes for exchange when, as and if we have given oral or written notice to the exchange agent, with written confirmation of any oral notice to be given promptly thereafter, and complied with the applicable provisions of the registration rights agreement. See “—Conditions to the Exchange Offer” for a discussion of the conditions that must be satisfied before we accept any original notes for exchange.
For each original note accepted for exchange, the holder will receive an exchange note registered under the Securities Act having a principal amount equal to that of the surrendered original note. Registered holders of exchange notes issued in the exchange offer on the relevant record date for the first interest payment date following the consummation of the exchange offer will receive interest accruing from May
9, 2013.24, 2023. Under the registration rights agreement, we may be required to make payments of additional interest to the holders of the original notes under circumstances relating to the timing of the exchange offer.
In all cases, we will issue exchange notes for original notes that are accepted for exchange only after the exchange agent timely receives:
•certificates for such original notes or a timely book-entry confirmation of such original notes into the exchange agent’s account at DTC, Euroclear or Clearstream, as appropriate;
•a properly completed and duly executed letter of transmittal or an agent’s message; and
•all other required documents.
If for any reason set forth in the terms and conditions of the exchange offer we do not accept any tendered original notes, or if a holder submits original notes for a greater principal amount than the holder desires to exchange, we will return such unaccepted or nonexchanged notes without cost to the tendering holder. In the case of original notes tendered by book-entry transfer into the exchange agent’s account with DTC, Euroclear or Clearstream, the nonexchanged notes will be credited to an account maintained with DTC, Euroclear or Clearstream. We will return
the original notes or have them credited to DTC, Euroclear or Clearstream accounts, as appropriate, promptly after the expiration or termination of the exchange offer.
The participant should transmit its acceptance to DTC, Euroclear or Clearstream, as the case may be, on or prior to the expiration date or comply with the guaranteed delivery procedures described below. DTC, Euroclear or Clearstream, as the case may be, will verify the acceptance and then send to the exchange agent confirmation of the book-entry transfer. The confirmation of the book-entry transfer will include an agent’s message confirming that DTC, Euroclear or Clearstream, as the case may be, has received an express acknowledgement from the participant that the participant has received and agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against such participant. Delivery of exchange notes issued in the exchange offer may be effected through book-entry transfer at DTC, Euroclear or Clearstream, as the case may be. However, the letter of transmittal or facsimile thereof or an agent’s message, with any required signature guarantees and any other required documents, must:
•be transmitted to and received by the exchange agent at the address set forth below under “—The Exchange Agent” on or prior to the expiration date; or
•comply with the guaranteed delivery procedures described below.
DTC’s ATOP program is the only method of processing exchange offers through DTC. To accept an exchange offer through ATOP, participants in DTC must send electronic instructions to DTC through DTC’s communication system. In addition, such tendering participants should deliver a copy of the letter of transmittal to the exchange agent unless an agent’s message is transmitted in lieu thereof. DTC is obligated to communicate those electronic instructions to the exchange agent through an agent’s message. To tender original notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal. Any instruction through ATOP is at your risk and such instruction will be deemed made only when actually received by the exchange agent.
In order for an acceptance of an exchange offer through ATOP to be valid, an agent’s message must be transmitted to and received by the exchange agent prior to the expiration date, or the guaranteed delivery procedures described below must be complied with. Delivery of instructions to DTC does not constitute delivery to the exchange agent.
Guaranteed Delivery Procedures
If a holder of original notes desires to tender such notes and the holder’s original notes are not immediately available, or time will not permit the holder’s original notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if:
•the holder tenders the original notes through an eligible institution;
•prior to the expiration date, the exchange agent receives from such eligible institution a properly completed and duly executed notice of guaranteed delivery, acceptable to us, by mail, hand delivery, overnight courier or facsimile transmission, setting forth the name and address of the holder of the original notes tendered, the certificate number or numbers of such original notes and the amount of the original notes being tendered. The notice of guaranteed delivery shall state that the tender is being made and guarantee that within three New York Stock Exchange trading days after the expiration date, the certificates for all physically tendered original notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal or agent’s message with any required signature guarantees and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and
•the exchange agent receives the certificates for all physically tendered original notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal or agent’s message with any required signature guarantees and any other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.
You may withdraw tenders of your original notes at any time prior to the expiration of the exchange offer.
For a withdrawal to be effective, you must send a written notice of withdrawal to the exchange agent at the address set forth below under “—The Exchange Agent.” Any such notice of withdrawal must:
•specify the name of the person that has tendered the original notes to be withdrawn;
•identify the original notes to be withdrawn, including the principal amount of such original notes; and
•where certificates for original notes are transmitted, specify the name in which original notes are registered, if different from that of the withdrawing holder.
If certificates for original notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible institution unless such holder is an eligible institution. If original 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, Euroclear or Clearstream, as applicable, to be credited with the withdrawn notes and otherwise comply with the procedures of such facility. We will determine all questions as to the validity, form and eligibility (including time of receipt) of notices of withdrawal and our determination will be final and binding on all parties. Any tendered notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any original notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder. In the case of original notes tendered by book-entry transfer into the exchange agent’s account at DTC, Euroclear or Clearstream, as applicable, the original notes will be credited to an account with DTC, Euroclear or Clearstream, as applicable, for the original notes. The original notes will be returned promptly after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn original notes may be re-tendered by following one of the procedures described under “—How to Tender Original Notes for Exchange” above at any time on or prior to 5:00 p.m., New York City time, on the expiration date.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, we are not required to accept the original notes in the exchange offer or to issue the exchange notes, and we may terminate or amend the exchange offer, if at any time before the expiration of the exchange offer (x) such acceptance or issuance would violate any applicable law or any interpretations of the staff of the SEC, (y) there is an action or proceeding instituted or threatened in any court or by any governmental agency that would reasonably be expected to impair our ability to proceed with the exchange offer or there is a material adverse development in any existing action or proceeding with respect to us, or (z) the governmental approvals necessary for the consummation of the exchange offer are not obtained.
The preceding conditions are for our sole benefit, and we may assert any of them regardless of the circumstances giving rise to such condition. We may waive the preceding conditions in whole or in part at any time and from time to time in our sole discretion. Our failure at any time to exercise the foregoing rights shall not be deemed a waiver of such rights, and each right shall be deemed an ongoing right which we may assert at any time and from time to time.
The exchange offer is not conditioned upon any minimum aggregate principal amount of original notes being tendered in the exchange offer.
Absence of Appraisal and Dissenters’ Rights
Holders of the original notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.
U.S. Bank
Trust Company, National Association has been appointed as our exchange agent for the exchange offer. All executed letters of transmittal should be directed to our exchange agent at the address set forth below. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery should be directed to the exchange agent addressed as follows:
By Registered Certified or Regular Mail:
U.S. Bank
Trust Company, National Association
Attention: Specialized Finance
60 Livingston Ave - EP-MN-WS2N
By Overnight Courier or Hand Delivery:
U.S. Bank
Trust Company, National Association
Attention: Specialized Finance
By Facsimile Transmission: (651) 466-7372
By Telephone: (800) 934-6802
Originals of all documents sent by facsimile should be promptly sent to the exchange agent by mail, by hand or by overnight delivery service.
The method of delivery of the original notes, the letters of transmittal and all other required documents is at the election and risk of the holders. If such delivery is by mail, we recommend registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. No letters of transmittal or original notes should be sent directly to us.
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF SUCH LETTER OF TRANSMITTAL VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
We will not make any payment to brokers, dealers or others soliciting acceptance of the exchange offer except for reimbursement of mailing expenses.
The cash expenses to be incurred in connection with the exchange offer will be paid by us.
Holders who tender their original notes for exchange notes will not be obligated to pay any transfer taxes in connection with the exchange. If, however, exchange notes issued in the exchange offer or substitute original notes not tendered or exchanged are to be delivered to, or are to be issued in the name of, any person other than the holder of the original notes tendered, or if a transfer tax is imposed for any reason other than the exchange of original notes in connection with the exchange offer, then the holder must pay any applicable transfer taxes, whether imposed on the registered holder or on any other person. If satisfactory evidence of payment of, or exemption from, transfer taxes is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to the tendering holder.
Consequences of Failure to Exchange Original Notes
Holders who desire to tender their original notes in exchange for exchange notes registered under the Securities Act should allow sufficient time to ensure timely delivery. Neither the exchange agent nor we are under any duty to give notification of defects or irregularities with respect to the tenders of original notes for exchange.
Original notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, continue to accrue interest and to be subject to the provisions in the indenture regarding the transfer and exchange of the original notes and the existing restrictions on transfer set forth in the legend on the original notes and in the offering memorandum dated May
2, 2013,15, 2023, relating to the original notes. After completion of this exchange offer, we will have no further obligation to provide for the registration under the Securities Act of those original notes except in limited circumstances with respect to specific types of holders of original notes and we do not intend to register the original notes under the Securities Act. In general, original notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.
Upon completion of the exchange offer, holders of any remaining original notes will not be entitled to any further registration rights under the registration rights agreement, except under limited circumstances. See “Risk Factors—Risks Relating to the Exchange Offer—You may have difficulty selling the original notes that you do not exchange.”
Exchanging Original Notes
Based on interpretations of the staff of the SEC, as set forth in no-action letters to third parties, we believe that the notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by holders of such notes, other than by any holder that is a broker-dealer who acquired original notes for its own account as a result of market-making or other trading activities or by any holder which is an “affiliate” of us within the meaning of Rule 405 under the Securities Act. The exchange notes may be offered for resale, resold or otherwise transferred without compliance with the registration and prospectus delivery provisions of the Securities Act, if:
•the holder is not a broker-dealer tendering notes acquired directly from us;
•the person acquiring the exchange notes in the exchange offer, whether or not that person is a holder, is acquiring them in the ordinary course of its business;
•neither the holder nor that other person has any arrangement or understanding with any person to participate in the distribution of the exchange notes issued in the exchange offer; and
•the holder is not our affiliate.
However, the SEC has not considered the exchange offer in the context of a no-action letter, and we cannot guarantee that the staff of the SEC would make a similar determination with respect to the exchange offer as in these other circumstances.
Each holder must furnish a written representation, at our request, that:
•it is acquiring the exchange notes issued in the exchange offer in the ordinary course of its business;
•at the time of the commencement of the exchange offer, it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes issued in the exchange offer in violation of the provisions of the Securities Act;
•it is not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or any guarantor; and
•if it is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the exchange notes.
Each holder who cannot make such representations:
•will not be able to rely on the interpretations of the staff of the SEC in the above-mentioned interpretive letters;
•will not be permitted or entitled to tender original notes in the exchange offer; and
•must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of original notes, unless the sale is made under an exemption from such requirements.
In addition, each broker-dealer that receives exchange notes for its own account in exchange for original notes, where such original notes were acquired by that broker-dealer as a result of market-making or other trading activities, must represent to us and acknowledge that it will provide us with information we reasonably request and comply with the applicable provisions of the Securities Act (including, but not limited to, delivering this prospectus in connection with any resale of such notes issued in the exchange offer). See “Plan of Distribution” for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer.
In addition, to comply with state securities laws of certain jurisdictions, the exchange notes may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and complied with by the holders selling the exchange notes. We have not agreed to register or qualify the exchange notes for offer or sale under state securities laws.
DESCRIPTION OF THE EXCHANGE NOTES
For purposes of this “Description of the Exchange Notes,” references to the
“Issuer”“Issuer” are references to LKQ Corporation and not any of its
Subsidiaries.subsidiaries. The definitions of certain other terms used in the following summary are set forth below under “—Certain
Additional Definitions.”
The Issuer will issue the exchange notes under an indenture (the
“Indenture”“Indenture”) dated as of May
9, 201324, 2023 among the Issuer, the
Guarantorssubsidiary guarantors (as defined below) and U.S. Bank
Trust Company, National Association, as trustee (the “Trustee”). This is the same indenture under which the original notes were issued. The term
“Notes”notes shall include the exchange notes and the original notes that remain outstanding following the exchange
offer.offer, if any.
The terms of the
Notesnotes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
“Trust“Trust Indenture Act”Act”). The
Notesnotes are subject to all such terms, and Holders of
Notesnotes are referred to the Indenture and the Trust Indenture Act for a statement thereof. The following summary of certain provisions of the Indenture is not necessarily complete and is qualified in its entirety by reference to the Indenture, including the definitions therein of certain terms used below. You should read the Indenture because it, and not this summary, defines your rights as a
Holderholder of
Notes.notes. A copy of the Indenture has been filed as an exhibit to the Current Report on Form 8-K we filed with the SEC on May
10, 201326, 2023 and is available from us upon request. See “Where You Can Find
MoreAdditional Information.”
The exchange notes will be issued only in registered form without coupons in minimum denominations of $2,000 and any integral multiple of $1,000 above that amount. The exchange notes initially will be represented by one or more global certificates registered in the name of a nominee of DTC as described under “Book-Entry, Delivery and Form.”
The trustee, through its corporate trust office, will act as our exchange agent, paying agent and security registrar in respect of the exchange notes. The current location of such corporate trust office is 190 S. LaSalle, Chicago, Illinois 60603. So long as the exchange notes are issued in the form of global certificates, payments of principal, interest and premium, if any, will be made by us through the paying agent to DTC.
The exchange notes will be initially fully and unconditionally guaranteed on a senior unsecured basis by each of our wholly owned domestic subsidiaries that are guarantors under the Senior Unsecured Credit Agreement and the CAD Note, and each of our domestic subsidiaries that in the future agrees to guarantee obligations under the Senior Unsecured Credit Agreement, the CAD Note, any other Credit Facility Debt or any Capital Markets Debt (each, a “subsidiary guarantor” and, collectively, the “subsidiary guarantors”).
The Exchange Notes Versus the Original Notes
The exchange notes are substantially identical to the original notes, except the exchange notes will be registered under the Securities Act, and the transfer restrictions and registration rights, and related additional interest provisions, applicable to the original notes will not apply to the exchange notes.
Principal, Maturity and Interest
The Issuer issued $800.0 million aggregate principal amount of 2028 original notes under the Indenture. The Issuer issued $600.0 million aggregate principal amount of 2033 original notes under the Indenture.
Interest on the 2028 exchange notes will accrue at a rate of 5.75% per annum and interest on the 2033 exchange notes will accrue at a rate of 6.25% per annum. Interest on each series of notes will be payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2023. We will pay interest to those persons who were holders of record of the applicable series of the exchange notes on the June 1 or December 1 immediately preceding each interest payment date with respect to such series of notes. If we deliver global notes to the trustee for cancellation on a date that is after the record date and on or before the corresponding interest payment date, then interest shall be paid in accordance with the provisions of DTC. Interest on each series of the exchange notes will accrue from the date of original issuance of such series of exchange notes or from the most recent interest payment date, as applicable. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Subsidiary Guarantees
Our obligations under the exchange notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the subsidiary guarantors and each of our domestic subsidiaries that in the future agrees to guarantee our obligations under the Senior Unsecured Credit Agreement, the CAD Note, any other Credit Facility Debt or any Capital Markets Debt.
Each subsidiary guarantee will rank equally in right of payment with all existing and future liabilities of the applicable subsidiary guarantor that are not subordinated. Each subsidiary guarantee will effectively rank junior to any secured indebtedness of its respective subsidiary guarantor to the extent of the lesser of the amount of such secured indebtedness and the value of the assets securing such indebtedness. Under the terms of any subsidiary guarantee, holders of the notes will not be required to exercise their remedies against us before they proceed directly against the subsidiary guarantors.
For purposes of the guarantee provisions of the Indenture, the following terms are defined as follows:
“Capital Markets Debt” means any debt for borrowed money of us or any of our subsidiaries that (i) is in the form of, or represented by, bonds, notes, debentures or other securities (other than promissory notes or similar evidences of debt under a credit agreement) and (ii) has an aggregate principal amount outstanding of (A) at least $25 million, at any time that any Existing Notes remain outstanding or (B) at least $50 million at any time that no Existing Notes remain outstanding.
“Credit Facility Debt” means any debt for borrowed money of us or any of our subsidiaries that (i) is incurred pursuant to a credit agreement, including pursuant to the Senior Unsecured Credit Agreement, the CAD Note, or other agreement providing for revolving credit loans, term loans or other debt entered into between us or any of our subsidiaries and any lender or group of lenders and (ii) has an aggregate principal amount outstanding or committed of (A) at least $25 million, at any time that any Existing Notes remain outstanding, or (B) at least $50 million at any time that no Existing Notes remain outstanding.
“Existing Notes” means the Euro Notes (2024) and the Euro Notes (2028).
Under the Indenture, holders of the exchange notes will be deemed to have consented to the release of a subsidiary guarantee provided by a subsidiary guarantor, without any action required on the part of the trustee or any holder of the exchange notes, upon such subsidiary guarantor ceasing to guarantee or to be an obligor with respect to the Senior Unsecured Credit Agreement, the CAD Note, any other Credit Facility Debt or any Capital Markets Debt.
Accordingly, if the lenders under the Senior Unsecured Credit Agreement or the CAD Note release a subsidiary
guarantor from its guarantee of, or obligations as a borrower under, the Senior Unsecured Credit Agreement or
the CAD Note, or if the Senior Unsecured Credit Agreement or the CAD Note is terminated in full, the obligations of the subsidiary guarantors to guarantee the exchange notes will immediately terminate, unless our subsidiary guarantors incur or guarantee obligations under any other Credit Facility Debt or Capital Markets Debt (not including any Credit Facility Debt or Capital Markets Debt where the subsidiary guarantees are being simultaneously released). We will give prompt written notice to the trustee of the automatic release of any subsidiary guarantor. If any of our subsidiaries incur or guarantee obligations under any Credit Facility Debt or Capital Markets Debt while the exchange notes are outstanding, then such subsidiaries will be required to guarantee the exchange notes.
In addition, a subsidiary guarantor will be released and relieved from all its obligations under its subsidiary guarantee in the following circumstances, each of which will be permitted by the Indenture:
• upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total Voting Stock of such subsidiary guarantor (other than to us or any of our affiliates); or
• upon the sale or disposition of all or substantially all the property of such subsidiary guarantor (other than to any of our affiliates or another subsidiary guarantor);
provided, however, that, in each case, after giving effect to such transaction, such subsidiary guarantor is no longer liable for any subsidiary guarantee or other obligations in respect of any of our or our subsidiaries’ Credit Facility Debt or Capital Markets Debt.
The Issuersubsidiary guarantee of a subsidiary guarantor also will be released if we exercise our legal defeasance or our covenant defeasance option as described under “—Defeasance” or if our obligations under the Indenture are discharged as described under “—Discharge of the Indenture.” At our written instruction, the trustee will execute and deliver any documents, instructions or instruments evidencing any such release.
Ranking
The exchange notes will be our general senior unsecured obligations and will:
• rank equally in right of payment with all of our existing and future senior unsecured indebtedness (including all of our obligations in respect of the Existing Notes, the Senior Unsecured Credit Agreement, and the CAD Note);
• rank senior in right of payment to all of our existing and future subordinated debt;
• be structurally subordinated to all liabilities (including trade payables) of our existing and future subsidiaries that do not guarantee the notes (including the obligations of our subsidiaries that do not guarantee the Existing Notes and the obligations of our foreign subsidiary borrowers under the Senior Unsecured Credit Agreement or the CAD Note that do not guarantee the notes); and
• be effectively subordinated to all of our and the subsidiary guarantors’ existing and future Secured Debt to the extent of the lesser of the amount of such Secured Debt or the value of the assets securing such Secured Debt.
The subsidiary guarantee of each subsidiary guarantor will:
• be a senior unsecured obligation of such subsidiary guarantor;
• be structurally subordinated to all liabilities (including trade payables) of such subsidiary guarantor’s existing and future subsidiaries that do not guarantee the notes (including the obligations of such subsidiary guarantor’s subsidiaries that do not guarantee the Existing Notes and the obligations of such subsidiary guarantor’s foreign subsidiary borrowers under the Senior Unsecured Credit Agreement or CAD Note that do not guarantee the notes);
• be effectively subordinated to any Secured Debt of such subsidiary guarantor to the extent of the lesser of the amount of such Secured Debt or the value of the assets securing such Secured Debt;
• rank equally in right of payment with such subsidiary guarantor’s existing and future senior unsecured indebtedness; and
• rank senior in right of payment to the subsidiary guarantor’s existing and future subordinated indebtedness.
We only have a stockholder’s claim on the assets of our subsidiaries. This stockholder’s claim is junior to the claims that creditors of our subsidiaries have against our subsidiaries. Holders of the notes will only be creditors of us and any subsidiary guarantors. In the case of subsidiaries that are not subsidiary guarantors, all of the existing and future liabilities of those non-guarantor subsidiaries, including any claims of trade creditors and preferred stockholders, will be effectively senior to the exchange notes.
The ability of our subsidiaries to pay dividends and make other payments to us is also restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries may issuebecome a party. Among other things, we may not be able to pay the cash purchase price if a holder requires us to repurchase notes as described below under “—Change of Control.”
Our subsidiaries have other liabilities, including contingent liabilities that may be significant. The Indenture will not contain any limitations on the amount of additional notesdebt that we and our subsidiaries may incur. The amount of this debt could be substantial, and this debt may be debt of our subsidiaries that are not subsidiary guarantors, in an unlimited amount (the “Additionalwhich case such debt would be effectively senior in right of payment to the exchange notes.
Further Issuances of Notes”)
We may, from time to time, without notice to or the consent of the holders of the exchange notes, issue additional notes of any series, in which case any additional notes so issued will have the same form and terms (other than the date of issuance and, under certain circumstances, the Indenture. However, nodate from which interest thereon will begin to accrue), and will carry the same right to receive accrued and unpaid interest, as the notes of such series previously issued, and additional notes of such series will form a single series with the previously issued notes of the same series, including for voting purposes; provided that any additional notes of such series that are not fungible with the exchange notes
of such series offered hereby for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the exchange notes of such series offered hereby. In addition, we may from time to time create and issue additional series of debt securities having the same terms as and ranking equally and ratably with the notes in all respects.
No offering of any
Additional Notesadditional notes referred to in the paragraph above is being or shall in any manner be deemed to be made by this prospectus.
The Notes and any Additional Notes of the same series issued under the same Indenture will be treated as a single class for all purposes under the Indenture.The Notes will mature on
Optional Redemption
Prior to May 15,
2023. Interest on the Notes will accrue at the rate of 4.75% per annum. Interest on the Notes will be payable in cash semi-annually in arrears on May 15 and November 15, to Holders of record on the May 1 or November 1 immediately preceding such interest payment date.Interest on the exchange notes will accrue from the most recent date to which interest has been paid on the original notes, if no interest has been paid, from the Issue Date. If your original notes are tendered and accepted for exchange, you will receive interest on the exchange notes and not the original notes. Any original notes not tendered or not accepted for exchange will remain outstanding and continue to accrue interest according to their terms.
Interest will be computed on the basis of a 360-day year comprising twelve 30-day months, and2028 in the case of an incomplete month, the number of days elapsed. The redemption price at final maturity for2028 exchange notes or March 15, 2033 in the Notes will be 100% of their principal amount.
Principal of and premium, if any, and interest on the Notes will be payable at the office or agencycase of the Issuer maintained for2033 exchange notes (each such purposedate, a “Par Call Date”), we may redeem the 2028 exchange notes or the 2033 exchange notes, as applicable, at our option, in the City and State of New York (the “Paying Agent”)whole or in the city in the United States in which the Trustee’s Corporate Trust Office is located or,part, at the option of the Issuer, payment of interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders of Notes;provided that if any Holder has given wire transfer instructions to the Issuer or the Paying Agent at least 15 days prior to the payment date, all payments of principal, premium, if any,time and interest with respect to the Notes held by such Holder will be made by wire transfer of immediately available funds to the account specified by such Holder. Until otherwise designated by the Issuer, the Issuer’s office or agency in the City and State of New York will be the office of the Trustee maintained for such purpose in the City and State of New York. The Issuer may change the Paying Agent or registrar without prior notice to the Holders, and the Issuer or any of the Subsidiaries may act as a Paying Agent or registrar.
The Notes will be issued in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
Ranking and Guarantees
The Notes will be senior obligations of the Issuer, rankingpari passu in right of payment with all other existing and future senior obligations of the Issuer, including obligations under other unsubordinated Indebtedness. The Notes will be effectively subordinated to all existing and future obligations of the Issuer that are secured by Liens on any property or assets of the Issuer, including the Senior Secured Credit Facility, to the extent of the value of the collateral securing such obligations, and will rank senior in right of payment to all existing and future obligations of the Issuer that are, by their terms, subordinated in right of payment to the Notes. As of December 31, 2013, after giving effect to the offering of the original notes and the borrowings under the senior secured credit facilities and the application of the proceeds therefrom, we had approximately $675.3 million aggregate principal amount of secured debt outstanding and had approximately $1,070.6 million of undrawn availability (after giving effect to approximately $45.6 million of outstanding letters of credit) under the Revolving Credit Facility and $80.0 million of undrawn availability under our receivables securitization program.
The Issuer’s obligations under the Notes and the Indenture will be fully and unconditionally Guaranteed, jointly and severally, by each of the Issuer’s present and future Domestic Subsidiaries that from time to time, are obligors under or Guarantee any Indebtedness under a Credit Facility, including, without limitation, the Senior Secured Credit Facility, or any syndicated loan or capital markets debt securities in an aggregate principal amount greater than or equal to $150.0 million.
Each Note Guarantee will be a senior obligation of the respective Guarantor, rankingpari passu in right of payment with all other senior obligations of such Guarantor, including obligations under other unsubordinated Indebtedness. Each Note Guarantee will be effectively subordinated to all existing and future obligations incurred by such Guarantor secured by Liens on any property or assets of such Guarantor, including the Senior Secured Credit Facility, to the extent of the value of the collateral securing such obligations, and will rank senior in right of payment to all existing and future obligations of such Guarantor that are, by their terms, subordinated in right of payment to the Guarantee of such Guarantor.
The Notes will be effectively subordinated to the obligations of non-Guarantor Subsidiaries. As of December 31, 2013, after giving effect to the offering of the original notes and the borrowings under the senior secured credit facilities and the application of the proceeds therefrom, we had approximately $675.3 million aggregate principal amount of secured debt outstanding and had approximately $1,070.6 million of undrawn availability (after giving effect to approximately $45.6 million of outstanding letters of credit) under the Revolving Credit Facility and $80.0 million of undrawn availability under our receivables securitization program. Of these amounts, as of the same date, our subsidiaries that do not guarantee the notes had approximately $236.5 million of outstanding indebtedness (which amount includes $233.8 million of borrowings under our Revolving Credit Facility by foreign subsidiaries that are borrowers under the Revolving Credit Facility but that do not guarantee the notes). Our non-Guarantor Subsidiaries represented approximately 32% and 26% of our total revenues and operating income, respectively, for the year ended December 31, 2013. In addition, our non-Guarantor Subsidiaries represented approximately 38% and 30% of our total assets and total liabilities, respectively, as of December 31, 2013 (excluding, in each case, intercompany amounts).
The Guarantors will Guarantee the Notes on the terms and conditions set forth in the Indenture.
A Note Guarantee of a Guarantor will be unconditionally and automatically released and discharged upon any of the following:
any Transfer (including, without limitation, by way of consolidation or merger) by any Guarantor to any Person that is not a Guarantor of all or substantially all of the properties and assets of such Guarantor; provided that such Guarantor is also released from all of its obligations in respect of Indebtedness under each Credit Facility and any other Indebtedness that gave rise to the obligation to provide such Note Guarantee;
any Transfer directly or indirectly (including, without limitation, by way of consolidation or merger) to any Person that is not a Guarantor of Equity Interests of a Guarantor or any issuance by a Guarantor of its Equity Interests, such that such Guarantor ceases to be a Subsidiary; provided that such Guarantor is also released from all of its obligations in respect of Indebtedness under each Credit Facility and any other Indebtedness that gave rise to the obligation to provide such Note Guarantee;
the release of such Guarantor from all obligations of such Guarantor in respect of Indebtedness under each Credit Facility and any other Indebtedness that gave rise to the obligation to provide such Note Guarantee; or
upon legal defeasance, covenant defeasance or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”
No such release or discharge of a Note Guarantee of a Guarantor shall be effective against the Trustee or the Holders of Notes to which such Note Guarantee relates (i) if a Default or Event of Default shall have occurred and be continuing under the Indenture as of the time of such proposed release until such time as such Default or Event of Default is cured and waived (unless such release is in connection with the sale of the Equity Interests in such Guarantor constituting collateral for a Credit Facility in connection with the exercise of remedies against such Equity Interests or in connection with a Transfer permitted by the Indenture if, but for the existence of such Default or Event of Default, such Guarantor would otherwise be entitled to be released from its Guarantee following the sale of such Equity Interests) and (ii) until the Issuer shall have delivered to the Trustee an officers’ certificate, upon which the Trustee shall have the right to rely, stating that all conditions precedent provided for in the Indenture relating to such transactions have been complied with and that such release and discharge is authorized and permitted under the Indenture. At the request of the Issuer, and upon being provided an officers’ certificate, the Trustee shall execute and deliver an instrument evidencing such release.
By its terms, the Note Guarantee of each Guarantor will limit the liability of each such Guarantor to the maximum amount it can pay without its Note Guarantee being deemed a fraudulent transfer. See “Risk Factors—Risks Related to our Indebtedness and the Exchange Notes—United States federal and state statutes allow courts, under specific circumstances, to void the notes and the guarantees, subordinate claims in respect of the notes and the guarantees and require noteholders to return payments received from us or the guarantors.”
Optional Redemption
At any time prior to May 15, 2016, the Issuer may on any one or more occasions redeem up to (i) 35% of the original aggregate principal amount of Notes issued under the Indenture and (ii) all or a portion of any Additional Notes issued after the Issue Date, upon not less than 30 nor more than 60 days’ notice, at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to 104.750%the greater of:
(1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming, in each case, that such exchange notes matured on their applicable Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 40 basis points in the case of the 2028 exchange notes or 45 basis points in the case of the 2033 exchange notes, less (b) interest accrued to the date of redemption; and
(2) 100% of the principal amount of the Notes redeemed, exchange notes to be redeemed;
plus, in either case, accrued and unpaid interest if any,thereon to, but excluding, the date of redemption with an amount of cash no greater thandate.
On or after the
cash proceeds (net of underwriting discounts and commissions) of all Equity Offerings by the Issuer since the Issue Date;providedthat: | (1) | at least 65% (calculated after giving effect to any issuance of Additional Notes) of the original aggregate principal amount of Notes issued under the Indenture (excluding Notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and |
| (2) | the redemption occurs within 120 days of the date of the closing of such Equity Offering. |
In addition, prior to May 15, 2018, the Issuerapplicable Par Call Date, we may redeem the Notes,exchange notes of the applicable series, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount thereof,of the exchange notes being redeemed plus accrued and unpaid interest if any,thereon to, but excluding, the applicable redemption date, plus the Make-Whole Premium. The Indenture provides thatdate.
“Treasury Rate” means, with respect to any redemption date, the yield determined by us in accordance with the following two paragraphs:
The Treasury Rate shall be determined by us after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the redemption date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities–Treasury constant maturities–Nominal” (or any successor caption or heading) (“H.15 TCM”). In determining the Treasury Rate, we shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the redemption date to the applicable Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life – and shall interpolate to the applicable Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the redemption date.
If on the third business day preceding the redemption date H.15 TCM is no longer published, we shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such redemption
the Issuer will notify the Trusteedate of the
Make-Whole PremiumUnited States Treasury security maturing on, or with
respecta maturity that is closest to, the
Notes promptly afterapplicable Par Call Date. If there is no United States Treasury security maturing on such Par Call Date, but there are two or more United States Treasury securities with a maturity date equally distant from such Par Call Date, one with a maturity date preceding such Par Call Date and one with a maturity date following such Par Call Date, we shall select the
calculationUnited States Treasury security with a maturity date preceding such Par Call Date. If there are two or more United States Treasury securities maturing on such Par Call Date or two or more United States Treasury securities meeting the criteria of the preceding sentence, we shall select from among these two or more United States Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and
the Trustee will not be responsible for verifying or otherwiseasked prices for such
calculation.On or after May 15, 2018,United States Treasury securities at 11:00 a.m., New York City time. In determining the Issuer may on any one or more occasions redeem all or a partTreasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the Notes,applicable United States Treasury security shall be based upon not less than 30 nor more than 60 days’ notice, at the redemptionaverage of
the bid and asked prices (expressed as
percentagesa percentage of principal amount)
set forth below, plus accruedat 11:00 a.m., New York City time, of such United States Treasury security, and
unpaid interest, if any, on the notes redeemed,rounded to
but excluding the applicable date of redemption (subject to the rights of holders of Notes to be redeemed on or after a record date for the payment of interest to receive interest on the relevant interest payment date), if redeemed during the twelve-month period beginning on May 15 of the years indicated below: | | | | |
Year | | Percentage | |
2018 | | | 102.375 | % |
2019 | | | 101.583 | % |
2020 | | | 100.792 | % |
2021 and thereafter | | | 100.000 | % |
Unless the Issuer defaultsthree decimal places.
Our actions and determinations in the payment ofdetermining the redemption price interestshall be conclusive and binding for all purposes, absent manifest error.
Notice of any redemption will
cease to accrue on the Notesbe mailed or
portions thereof called for redemption on the applicable redemption date. The Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.In addition, the Issuer may acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions orelectronically delivered (or otherwise transmitted in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.
Notwithstanding the foregoing, the payment of accrued but unpaid interest in connection with the redemption of Notes is subject to the rights of a Holder of Notes on a record date for the payment of interest whose Notes are to be redeemed on or after such record date but on or prior to the related interest payment date to receive interest on such interest payment date.
Selection and Notice Regarding Notes
If less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes to be redeemed are listed or, if the Notes are not so listed, on apro ratabasis (or, in the case of Notes in global form, the Notes will be selected for redemption based on DTC’s applicable procedures);providedthat no Notes with a principal amount of $2,000 or less shall be redeemed in part. Notice of redemption shall be mailed by first class mail at least 3010 days but not more than 60 days before the redemption date to each Holderholder of Notesexchange notes of a series to be redeemed at its registered address (orredeemed; provided, that we shall deliver a copy of such redemption notice to the extent permittedTrustee no less than five business days (or such shorter time as agreed by the Trustee) prior to the date on which such redemption notice must be delivered to holders of such exchange notes to be redeemed. Any redemption of the exchange notes of such series and notice thereof pursuant to the Indenture may, in our discretion, be subject to the satisfaction of one or requiredmore conditions precedent, including, but not limited to, completion of any transaction.
In the case of a partial redemption, selection of the exchange notes of a series for redemption will be made pro rata, by applicable DTC procedureslot or regulations with respect to global Notes, sent electronically).by such other method as the trustee in its sole discretion deems appropriate and fair. No exchange notes of a principal amount of $2,000 or less will be redeemed in part. If any Noteexchange note is to be redeemed in part only, the notice of redemption that relates to such Note shallthe exchange note will state the portion of the principal amount thereofof the exchange note to be redeemed. A new Noteexchange note in a principal amount equal to the unredeemed portion thereofof the exchange note will be issued in the name of the Holder thereofholder of the exchange note upon surrender for cancellation of the original Note. Onexchange note. For so long as the exchange notes are held by DTC, the redemption of the exchange notes shall be done in accordance with the policies and procedures of DTC.
Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on
such Notesthe exchange notes or portions thereof called for redemption.
Redemption amounts shall only be paid upon presentation and surrender of any such Notes to be redeemed.Any redemption and notice thereof pursuant to the Indenture may, in the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent.
Mandatory Redemption
Except as set forth below under “—Repurchase at the Option of Holders,” the Issuer is
We are not required to make any mandatory redemption or sinking fund payments with respect to the
Notes.Repurchase at the Option of Holders
Asset Dispositions
exchange notes.
Special Mandatory Redemption
The
Issuer will not, and will not permit any Subsidiary2033 original notes were subject to
directly or indirectly, consummate any Asset Disposition unless:(1) the Issuer or such Subsidiary receives consideration at least equala special mandatory redemption provision which would have applied to the fair market value (such fair market value to be determined in good faith by2033 exchange notes if the Issuer on the date of contractually agreeing to such Asset Disposition) of the equity and assets subject to such Asset Disposition;
(2) at least 75% of the consideration received by the Issuer or such Subsidiary is in the form of cash or cash equivalents, Additional Assets or any combination thereof (collectively, the “Cash Consideration”); and
(3) within 365 days from the later of the date of such Asset DispositionUni-Select Acquisition was not consummated, or the receipt of such Net Available Cash, an amount equalUni-Select Agreement was terminated, on or prior to 100% ofNovember 27, 2023 (subject to potential extension). The Uni-Select Acquisition was consummated on August 1, 2023 and, therefore, the Net Available Cash from such Asset Disposition is applied by the Issuer (or such Subsidiary, as the case may be):
| (A) | to the extent the Issuer elects (or is required by the terms of any applicable Indebtedness), to prepay, repay, redeem or purchase Secured Debt of the Issuer or any Guarantor or Indebtedness of a Wholly Owned Subsidiary that is not a Guarantor (in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer), provided such prepayment, repayment, redemption or purchase permanently retires, or reduces the related loan commitment (if any) for, such Indebtedness in an amount equal to the principal amount so prepaid, repaid, redeemed or purchased; |
| (B) | to the extent the Issuer elects, to acquire Additional Assets or to make any other capital expenditures; |
| (C) | to make an offer to the Holders of the Notes (and to holders of other Pari Passu Indebtedness of the Issuer designated by the Issuer) to purchase Notes (and such other Pari Passu Indebtedness of the Issuer) pursuant to and subject to the conditions contained in the Indenture, as set forth below, and in the instruments governing such Pari Passu Indebtedness; and |
| (D) | to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), for any purpose permitted by the terms of the Indenture. |
Pending application of Net Available Cash pursuant to this covenant, such Net Available Cash shall be applied to temporarily reduce revolving credit Indebtedness or in any manner not prohibited by the Indenture.
For the purposes of this covenant, the following are deemed to be Cash Consideration:
any liabilities, as shown on the Issuer’s or any Subsidiary’s most recent balance sheet, of the Issuer or such Subsidiary (other than contingent liabilities) that are assumed by the transferee of any such assets pursuant to (1) a customary novation agreement that releases the Issuer or such Subsidiary from further liability or (2) an assignment agreement that includes, in lieu of such a release, the agreement of the transferee or its parent company to indemnify and hold harmless the Issuer or such Subsidiary from and against any loss, liability or cost in respect of such assumed liability;
any securities,2033 exchange notes or other obligations received by the Issuer or any Subsidiary from such transferee that are converted by the Issuer or such Subsidiary into cash or cash equivalents within 180 days after such Asset Disposition, to the extent of the cash and cash equivalents received in that conversion; and
any Designated Non-cash Consideration received by the Issuer or any of its Subsidiaries in such Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause that has at that time not been converted into cash or a cash equivalent, not to exceed the greater of (x) $100.0 million and (y) 3.0% of Consolidated Net Tangible Assets at the time of the receipt of such Designated Non-cash Consideration (with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
The amount of Net Available Cash not applied or invested as provided above will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds equals or exceeds $100.0 million, the Issuer shall make an offer to purchase Notes (an “Offer”) within ten Business Days thereof, and shall purchase Notes tendered pursuant to an Offer by the Issuer for the Notes and other Pari Passu Indebtedness that contemporaneously requires the purchase, prepayment or redemption of such Indebtedness with the proceeds of sales of assets at a purchase price of 100% of their principal amount without premium, plus accrued but unpaid interest (including additional interest, if any) (or, in respect of such other Pari Passu Indebtedness of the Issuer, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness) in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture and the terms of such other Pari Passu Indebtedness. If any Excess Proceeds remain after consummation of an Offer and the contemporaneous offer with respect to any other
Pari Passu Indebtedness contemplated above, the Issuer may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate purchase price of the securities tendered exceeds the amount of Excess Proceeds, the Issuer shall allocate the Excess Proceeds between such securities on a pro rata basis and will select the Notes to be purchased on a pro rata basis but in denominations of $2,000 principal amount or integral multiples of $1,000 in excess thereof. The remainder of the Excess Proceeds allocable to the other Pari Passu Indebtedness will be repurchased as provided pursuant to the terms of such Indebtedness. Upon completion of such an Offer to purchase, Excess Proceeds will be deemed to be reset to zero.
The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the applicable securities laws and regulations and will not be deemedsubject to have breached its obligations under this covenant by virtue of its compliance with such securities laws or regulations.
the special mandatory redemption provision that applied to the 2033 original notes.
Upon the occurrence of a Change of Control Triggering Event with respect to a series of exchange notes, unless we have exercised our right to redeem the notes of such series as described above under “—Optional Redemption,” the Indenture will provide that each Holderholder of Notesexchange notes of such series will have the right to require the Issuerus to repurchasepurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof)a portion of such Holder’s Notesholder’s exchange notes of such series pursuant to the offer described below (the “Change“Change of Control Offer”Offer”), at an offera purchase price in cash equal to 101% of theirthe aggregate principal amount thereof plus accrued and unpaid interest, if any, thereon to the date of purchase, subject to the rights of holders of exchange notes of such series on the relevant record date (the “Change of Control Payment”). to receive interest due on the relevant interest payment date.
Within 30 days following
anythe date upon which the Change of Control
or, at the Issuer’s option, prior to the consummation of such Change of Control but after the public announcement thereof, the Issuer will mail (or to the extent permitted or required by applicable DTC procedures or regulationsTriggering Event occurred with respect to
global Notes,a series of exchange notes, we will be required to send,
electronically)electronically or by first class mail, a notice to each
Holder andholder of exchange notes of such series, with a copy to the
Trustee describingtrustee, which notice will govern the
transaction or transactions that constituteterms of the Change of Control
and offering to repurchase Notes onOffer. Such notice will state, among other things, the purchase date,
specified in such notice (whichwhich must be no earlier than 30 days nor later than 60 days from the date such notice is
sent,mailed, other than as
may be required by
law)law (the
“Change“Change of Control Payment Date”Date”)
pursuant. The notice, if mailed prior to the
procedures required by the Indenture and described in such notice. Such obligation will not continue after a dischargedate of
the Issuer or defeasance from its obligations with respect to the Notes. See “—Legal Defeasance and Covenant Defeasance.”Onconsummation of the Change of Control, Payment Date, the Issuer will to the extent lawful:
(1) accept for payment all Notes or portions thereof (in minimum amounts of $2,000 or an integral multiple of $1,000 in excess thereof) properly tendered pursuant tostate that the Change of Control Offer;
(2) deposit withOffer is conditioned on the Paying Agent an amount equalChange of Control being consummated on or prior to the Change of Control Payment in respectDate. Holders of all Notes or portions thereof so tendered; and
(3) deliver or causeexchange notes electing to have their exchange notes purchased pursuant to a Change of Control Offer will be deliveredrequired to surrender their exchange notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the exchange note completed, to the Trustee for cancellation all Notes so accepted together with an officers’ certificate statingpaying agent at the aggregate principal amountaddress specified in the notice, or transfer their exchange notes to the paying agent by book-entry transfer pursuant to the applicable procedures of Notes (or portions thereof) being purchased by the Issuer.
The Paying Agent will promptly remitpaying agent, prior to each Holderthe close of Notes so tenderedbusiness on the third business day prior to the Change of Control Payment for such Notes, and the TrusteeDate.
We will promptly authenticate and deliver (or causenot be required to be transferred by book entry) to each Holder of Notesmake a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any;provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer if a third party makes such an offer in the manner, at the times, and otherwise in compliance with the requirements for such an offer made by us and such third party purchases all exchange notes properly tendered and not withdrawn under its offer.
“Change of Control” means the occurrence of any one of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of our and our subsidiaries’ assets, taken as a whole, to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)) other than us or one of our subsidiaries;
(2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock or any other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;
(3) LKQ consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, LKQ, in any such event pursuant to a transaction in which any of our outstanding Voting Stock (or any other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed) or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of our Voting Stock (or any other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed) outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person immediately after giving effect to such transaction;
(4) the adoption of a plan relating to the liquidation or dissolution of LKQ; or
(5) the first day on or as soon as practicable afterwhich a majority of the members of our board of directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control
Payment Date.if, in connection with a bona fide internal corporate restructuring transaction, (a) LKQ becomes a direct or indirect wholly owned subsidiary of a holding company and (b) no Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)) (other than a holding company) owns, directly or indirectly, a majority of the Voting Stock of such holding company.
The Issuerdefinition of Change of Control includes a phrase relating to the sale, assignment, conveyance, transfer, lease or other disposition of “all or substantially all” of LKQ’s and its subsidiaries’ assets. Although there is a limited body of case law interpreting the phrase “all or substantially all” there is no precise established definition of the phrase under applicable law. Therefore, the ability of a holder of the exchange notes to require LKQ to repurchase the exchange notes as a result of a sale, assignment, conveyance, transfer, lease or other disposition of less than all of the assets of LKQ and its subsidiaries to another Person may be uncertain.
“Change of Control Triggering Event” means, with respect to a series of exchange notes, the exchange notes of such series are decreased from Investment Grade by at least two of the three Rating Agencies on any date during the Trigger Period. If a Rating Agency is not providing a rating for the exchange notes of such series at the commencement of any Trigger Period, the exchange notes of such series will be deemed to have decreased from Investment Grade by such Rating Agency during that Trigger Period. Notwithstanding the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually occurred.
“Fitch” means Fitch Ratings, Inc. and any successor thereto.
“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of Moody’s) and a rating of BBB- or better by S&P or Fitch (or its equivalent under any successor rating category of S&P or Fitch).
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“Rating Agency” means each of Fitch, Moody’s and S&P; provided that if Fitch, Moody’s or S&P ceases to rate the notes or fails to make a rating on the notes publicly available for reasons outside of our control, a nationally recognized statistical rating agency or agencies, as the case may be, selected by us shall be substituted for Fitch, Moody’s and/or S&P, as the case may be.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., and any successor thereto.
“Trigger Period” means the period commencing 60 days prior to the first public announcement by us of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which Trigger Period will be extended following consummation of a Change of Control for so long as either of the Rating Agencies has publicly announced that it is considering a possible ratings change).
“Voting Stock” of any specified Person as of any date means the capital stock or other equity securities of such Person that is at the time entitled to vote generally in the election of the board of directors (or comparable
governing body) of such Person.
The provisions of the Indenture will not afford holders of the exchange notes the right to require us to repurchase their exchange notes in the event of certain transactions with our management, affiliates or subsidiaries that may adversely affect holders of exchange notes, if such transaction is not a transaction that falls within the definition of Change of Control Triggering Event.
We will be required to comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent
suchthose laws and regulations are applicable in connection with the repurchase of the
Notesexchange notes as a result of a Change of
Control.Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with provisions of
this covenant, the
IssuerIndenture, we will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under
this covenantthe Indenture by virtue
thereof.of our compliance with such securities laws and regulations.
Notwithstanding the foregoing, we or any of our subsidiaries or affiliates may at any time repurchase any or all of the exchange notes in the open market or otherwise at any price.
If
Holdersholders of not less than 90% in aggregate principal amount of the then outstanding
Notesexchange notes of a series validly tender and do not withdraw
the exchange notes of such
Notesseries in a Change of Control Offer and
the Issuer,we, or any other Person making a Change of Control Offer in lieu of
the Issuerus as described
below,above, purchases all of the
Notesexchange notes of such series validly tendered and not withdrawn by such holders,
the Issuerwe will have the right, upon not less than 15
calendar days nor more than
3060 calendar days’ prior notice,
given not more than 1530 calendar days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notesexchange notes of such series that remain outstanding following such purchase at a redemption price in cash equal to 101% of the applicable Changeprincipal amount of Control Paymentthe exchange notes, plus to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, to, but excludingnot including, the date of redemption.
Except as described above with respectredemption (subject to athe right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
The Change of Control the Indenture does not contain provisions that permit the Holdersfeature of the Notesexchange notes may in certain circumstances make it more difficult to require thatconsummate or discourage a sale or takeover of us and, thus, the Issuer repurchase or redeem the Notesremoval of incumbent management. We could, in the event of a takeover, recapitalizationfuture, enter into certain transactions, including acquisitions, refinancings or similar transaction with respect to the Issuer.The Issuer will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture with respect to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) notice of redemption has been given or will be given pursuant to the Indenture as described above under the caption “—Optional Redemption” prior to the date the Issuer is required to send notice of the Change of Control Offer to the Holders of the Notes, unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made and such Change of Control Offer is otherwise made in compliance with the provisions of this covenant.
The Senior Secured Credit Facility contains, and future Indebtedness may contain, prohibitions on the occurrence of certain eventsother recapitalizations, that would not constitute a Change of Control under the exchange notes, but that could increase the amount of indebtedness outstanding at such time or an Asset Dispositionotherwise affect our capital structure or requirecredit ratings on the repaymentexchange notes.
Certain Covenants
SEC Reports
The Indenture provides that we will agree to file with the trustee, within 15 days after we file the same with the SEC, copies of the annual reports and of the information, documents, and other reports, if any, that we are required to file with the SEC pursuant to Section 13 or
repurchaseSection 15(d) of the Exchange Act or pursuant to Section 314 of the Trust Indenture Act. Whether we file such reports with the SEC or post our reports on our website, the public posting of such
Indebtedness upon a Change of Control or an Asset Disposition. Moreover,reports shall satisfy any requirement in the
exercise by the Holders of their rightIndenture to
require the Issuer to repurchase the Notes could cause a default under the Senior Secured Credit Facility and/ordeliver such
Indebtedness, even if the Change of Control or Asset Disposition itself does not. Finally, the Issuer’s ability to pay cashreports to the
Holderstrustee and holders of
Notes followingnotes. Delivery of such reports and information to the
occurrencetrustee shall be for informational purposes only, and the trustee’s receipt of
a Changethem shall not constitute constructive notice of
Controlany information contained therein or
an Asset Disposition may be limited by its then-existing financial resources. There can be no assurance that sufficient funds will be available when necessary to makedeterminable from information contained therein (including our compliance with any
required repurchases and there can be no assurance that the Issuer would be able to obtain financing to make such repurchases. Even if sufficient funds were otherwise available, the terms of
the Senior Secured Credit Facility does, and future Indebtedness may, prohibit the Issuer’s prepayment of Notes before their scheduled maturity. Consequently, if the Issuer is not able to prepay amounts due under the Senior Secured Credit Facility and any such other Indebtedness containing similar restrictions or obtain requisite consents, the Issuer will be unable to fulfill its repurchase obligations if Holders of Notes exercise their repurchase rights following a Change of Control or an Asset Disposition, resulting in a Default under the Indenture. A Defaultour covenants under the Indenture
would constitute a default underas to which the
Senior Secured Credit Facility and could constitute a default under other Indebtedness.The existence of a Holder’s righttrustee is entitled to require the Issuer to make a Change of Control Offer upon a Change of Control may deter a third party from acquiring the Issuer in a transaction that constitutes a Change of Control. The definition of “Change of Control” includes a phrase relating to the transfer of “all or substantially all” of the assets of the Issuer and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require the Issuer to repurchase its Notes as a result of a transfer of less than all of the assets of the Issuer and its Subsidiaries taken as a whole to another Person may be uncertain.
Certain Covenants
Suspension of Certain Covenants when Notes Rated Investment Grade
Ifrely exclusively on any date following the Issue Date (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), the Issuer and its Subsidiaries will not be subject to the following covenants (collectively, the “Suspended Covenants”):
(1) “—Limitations on Restricted Payments”;
(2) “—Repurchase at the Option of Holders—Asset Disposition”;
(3) clause (2) of the covenant described below under the caption “—an officers’ certificate).
Limitation on
Sale and Leaseback Transactions”; and(4) “—Additional Note Guarantees.”
In the eventLiens
The Indenture provides that
the Issuer and its Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Issuer and its Subsidiaries will thereafter again be subject to the Suspended Covenants under the Indenture with respect to future events.The period of time between the occurrence of a Covenant Suspension Event and the Reversion Date is referred to in this description as the “Suspension Period.” In the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of its Subsidiaries prior to such reinstatement will give rise to a Default or Event of Default under the Indenture with respect to Notes. With respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made will be calculated as though the covenant described under the caption “—Limitations on Restricted Payments” had been in effect since the Issue Date and throughout the Suspension Period except that no Default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. Accordingly, Restricted Payments made during the Suspension Period will reduce the amounts available to be made as Restricted Payments under the first paragraph of “—Limitations on Restricted Payments.” In addition, notwithstanding the foregoing, the continued existence after any reinstitution of the foregoing covenants of facts and circumstances or obligations arising from transactions that occurred during the period such covenants were suspended shall not constitute a breach of any covenant set forth in the Indenture or cause an Event of Default thereunder.
The Trustee shall have no responsibility to monitor any change in the rating of the Notes. There can be no assurance that the Notes will ever achieve or maintain Investment Grade Ratings.
Limitations on Restricted Payments
The Issuerwe will not, and will not permit any Subsidiaryof our subsidiaries to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment:
(a) a Default shall have occurred and be continuing or shall occur as a consequence thereof;
(b) after giving effect to such Restricted Payment (including, without limitation, the incurrence of any Indebtedness to finance such Restricted Payment), the Consolidated Fixed Charge Coverage Ratio would be less than 2:00 to 1:00; or
(c) the amount of such Restricted Payment, when added to the aggregate amount of all other Restricted Payments made after the Issue Date (other than Restricted Payments made pursuant to clauses (b), (c), (d) or (e) of the next paragraph), exceeds the sum (the “Restricted Payments Basket”) of (without duplication):
(i) 50% of Consolidated Net Income of the Issuer and its Subsidiaries determined in accordance with GAAP for the period (taken as one accounting period) commencing on the first day of the fiscal quarter during which the Issue Date occurs to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income shall be a deficit, minus 100% of such aggregate deficit),plus
(ii) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Issuer, of property and marketable securities received by the Issuer from the issuance and sale of Qualified Equity Interests of the Issuer after the Issue Date or from the issue or sale of convertible or exchangeable Disqualified Equity Interests of the Issuer or convertible or exchangeable debt securities of the Issuer, in each case that have been converted into or exchanged for Qualified Equity Interests of the Issuer, other than (A) any such proceeds which are used to redeem Notes in accordance with the second paragraph under “—Optional Redemption” or (B) any such proceeds or assets received from a Subsidiary of the Issuer,plus
(iii) the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness) incurred by the Issuer or any Subsidiary subsequent to the Issue Date is reduced on the Issuer’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Issuer) into Qualified Equity Interests of the Issuer (less the amount of any cash, or the fair value of assets, distributed by the Issuer or any Subsidiary upon such conversion or exchange).
The foregoing provisions will not prohibit:
(a) the payment by the Issuer of any dividend or the consummation of any redemption within 60 days after the date of declaration thereof or the giving of the redemption notice, as the case may be, if on the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of the Indenture;
(b) the redemption of any Equity Interests of the Issuer in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests;
(c) payments by the Issuer to redeem Equity Interests of the Issuer held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of the Issuer or its Subsidiaries, upon their death, disability, retirement, severance or termination of employment or service or other repurchase event pursuant to any management equity plan or stock option plan, shareholders’ agreement or any other management or employee benefit plan or agreement or arrangement;provided that the aggregate cash consideration paid for all such redemptions shall not exceed (A) $25.0 million during any calendar year (with unused amounts being available to be used in the following two calendar years but not any succeeding calendar year) plus (B) the amount of any net cash proceeds received by the Issuer from the issuance and sale after the Issue Date of Qualified Equity Interests of the Issuer to officers, directors or employees of the Issuer or the Subsidiaries that have not been applied to the payment of Restricted Payments pursuant to this clause (c), plus (C) the net cash proceeds of any “key-man” life insurance policies that have not been applied to the payment of Restricted Payments pursuant to this clause (c); provided, that neither (x) cancellation of Indebtedness owing to the Issuer from any current or former officer, director or employee (or any permitted transferees thereof) of the Issuer or any of its Subsidiaries (or any direct or indirect parent company thereof), in connection with a repurchase of Equity Interests of the Issuer from such Persons nor (y) any payments or other obligations arising in respect of Equity Interests of the Issuer held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) in connection with or resulting from the announcement or consummation of a Change of Control, will be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the Indenture;
(d) repurchases, acquisitions or retirements for value of Equity Interests deemed to occur upon the exercise of stock options, warrants, rights to acquire Equity Interests or other convertible securities if the Equity Interests represent a portion of the exercise price thereof, or in connection with the withholding of a portion of the Equity Interests granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award;
(e) Restricted Payments to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the conversion or exchange of Equity Interests of any Person (including in a merger, consolidation, amalgamation or similar transaction) and payments of cash to dissenting shareholders in connection with a merger, consolidation, amalgamation, transfer of assets;
(f) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Subsidiary of the Issuer to the holders of its Equity Interests on a pro rata basis;
(g) the purchase of Equity Interests of the Issuer in an aggregate amount not to exceed $100.0 million in any twelve-month period;
(h) the making by the Issuer of regular quarterly and/or annual dividend payments in respect of its common stock in an aggregate amount not to exceed 1.0% of the total market capitalization of the Issuer (determined as of the date of declaration of such dividend), in any fiscal year;
(i) Restricted Payments in an amount not to exceed $125.0 million since the Issue Date; and
(j) other Restricted Payments if, at the time of the making of such payments, and after giving effect thereto (including, without limitation, the incurrence of any Indebtedness to finance such payment), the Total Net Leverage Ratio would not exceed 2.00 to 1.00,
provided that (a) in the case of any Restricted Payment pursuant to clause (c), (i) or (j) above, no Default shall have occurred and be continuing or occur as a consequence thereof and (b) no issuance and sale of Qualified Equity Interests that are used to make a payment pursuant to clauses (b) or (c)(B) above shall increase the Restricted Payments Basket.
Limitation on Liens
The Issuer will not at any time create, incur, assume or guarantee, and will not cause or permit a Subsidiary to create, incur,issue, assume or guarantee any Secured Debt (the “Initial Security Interest”), and the Issuer will not at any time create, and will not cause or permit a Subsidiary to create, any Security Interest securing any indebtedness existing on the date of the Indenture which would constitute Secured Debt if it wereIndebtedness secured by a Security Interest (other than Permitted Security Interests) upon any Property, or upon shares of capital stock or evidence of indebtedness issued by any of our subsidiaries and owned by us or by any of our subsidiaries, without first making effective provision wherebyto secure all of the debt securities then outstanding under the Indenture and any other indebtedness of or guaranteed by the Issuer or such Subsidiary then entitled thereto, subject to applicable priorities of payment, shall be secured by the Security Interest securing such Secured Debtexchange notes, equally and ratably with any and all other obligations and indebtedness soIndebtedness secured thereby, so long as any of such other Indebtedness shall be so secured.
Limitation on Sale and Leaseback Transactions
The Indenture provides that we will not, and will not permit any subsidiary to, enter into any arrangement with any person providing for the leasing by us or any subsidiary of any Property that has been or is to be sold or transferred by us or such subsidiary to such person, with the intention of taking back a lease of such
property or assets (a “Sale and Leaseback Transaction”) unless either:
• within 12 months after the receipt of the proceeds of the sale or transfer, we or any subsidiary apply an amount equal to the greater of the net proceeds of the sale or transfer or the fair value of such property or assets (as determined in good faith by our board of directors as of any date within 90 days prior to the date of such sale or transfer) to the prepayment or retirement (other than any mandatory prepayment or retirement) of Senior Funded Debt; or
• we or such subsidiary would be entitled, at the effective date of the sale or transfer, to incur debt secured by a Security Interest on such property or assets in an amount at least equal to the Attributable Debt in respect of the Sale and Leaseback Transaction, without equally and ratably securing the exchange notes pursuant to the covenant described under “—Limitation on Liens.”
The foregoing restriction in the paragraph above will not apply to any Sale and Leaseback Transaction (i) for a term of not more than three years including renewals; (ii) between us and a subsidiary or between subsidiaries, provided that the lessor is us or a wholly owned subsidiary; or (iii) entered into within 270 days after the later of the acquisition or completion of construction of the subject property or assets.
Future Subsidiary Guarantees
The Indenture provides that if, after the issue date of the original notes, any Credit Facility Debt or Capital Markets Debt is or becomes guaranteed by any of our domestic subsidiaries then, if such domestic subsidiary is not already a subsidiary guarantor, we shall cause such subsidiary within 30 days after such domestic subsidiary guarantees such Credit Facility Debt or Capital Markets Debt to (a) execute and deliver to the trustee a supplemental indenture pursuant to which such domestic subsidiary will fully and unconditionally guarantee all of our obligations under the Indenture and (b) deliver to the trustee an opinion of counsel to the effect that (i) such supplemental indenture and guarantee of the notes has been duly authorized, executed and delivered, (ii) such supplemental indenture and guarantee of the notes constitutes a valid, binding and enforceable obligation of such domestic subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws and except insofar as enforcement thereof is subject to general principles of equity and (iii) such supplemental indenture complies with the terms of the Indenture.
Merger, Consolidation, or Sale of Assets
The Indenture provides that (a) we will not consolidate or merge with or into any other Person or, in a single transaction or a series of related transactions, Transfer all or substantially all of the properties or assets of
us and our subsidiaries, taken as a whole, to another Person and (b) we will not permit any subsidiary guarantor to consolidate or merge with or into any other Person or, in a single transaction or a series of related transactions, Transfer all or substantially all of the properties or assets of such subsidiary guarantor to another Person unless:
(1) in the case of a merger, consolidation or Transfer involving us, we are the continuing corporation or the successor is a corporation, limited liability company, partnership or trust organized under the laws of the United States or a state thereof, and in the case of a merger, consolidation or Transfer involving a subsidiary guarantor, such subsidiary guarantor is the continuing Person or the successor to such subsidiary guarantor is a corporation, limited liability company, partnership or trust organized under the same jurisdiction in which such subsidiary guarantor is organized or under the laws of the United States or a state thereof;
(2) the successor Person expressly assumes by a supplemental indenture or amendment of the relevant documents the obligations of us or such subsidiary under the notes and the Indenture;
(3) LKQ, the subsidiary guarantor or the successor Person, as the case may be, is not immediately after such transaction, in default in the performance of any covenant or condition under the Indenture;
(4) immediately before and immediately after giving effect to such transaction, no Event of Default exists; and
(5) LKQ, the subsidiary guarantor or the successor Person shall have delivered to the trustee an officer’s certificate and an opinion of counsel, each to the effect that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture and an opinion of counsel to the effect that such supplemental indenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Successor Company (in each case, in form and substance reasonably satisfactory to the Trustee); provided that in giving an opinion of counsel, counsel may rely on an officer’s certificate as to any matters of fact.
Upon any consolidation, combination or merger of us or any subsidiary guarantor, or any Transfer of all or substantially all of our or a subsidiary guarantor’s assets in accordance with the foregoing, in which we or such subsidiary guarantor is not the continuing obligor under the notes or the related subsidiary guarantee, the surviving entity formed by such consolidation or into which we or such subsidiary guarantor is merged or to which the Transfer is made will succeed to, and be substituted for, and may exercise every right and power of us or such subsidiary guarantor under the Indenture, notes, and subsidiary guarantees with the same effect as if such surviving entity had been named therein as LKQ or such subsidiary guarantor, as the case may be, and, except in the case of a Transfer to us or any of our subsidiaries, we or such subsidiary guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on such notes or in respect of the related subsidiary guarantee, as the case may be, and all of our or such subsidiary guarantor’s, as the case may be, other obligations and indebtednesscovenants under such notes, the Indenture and the related subsidiary guarantee, if applicable. We shall deliver, or cause to be delivered, to the trustee an officers’ certificate and an opinion of counsel, each to the effect that such consolidation, merger, sale, conveyance, assignment, transfer, lease or other disposition complies with the requirements of the Indenture, and an opinion of counsel stating that the notes, the Indenture and subsidiary guarantees, as applicable, constitute valid and binding obligations of us or the applicable subsidiary guarantor or other surviving entity, subject to customary exceptions.
This “—Merger, Consolidation, or Sale of Assets” covenant will not apply to any Transfer of assets between or among us and any one or more of our subsidiary guarantors or between or among any one or more of our subsidiary guarantors.
Certain Additional Definitions
The following terms used in this “Description of the Exchange Notes” are defined as follows. Reference is made to the Indenture for the full definition of all such terms as well as any other capitalized terms used herein for which no definition is provided. The Indenture is filed as Exhibit 4.1 to our Current Report on Form 8-K, which we filed with the SEC on May 26, 2023 and which is incorporated herein by reference.
“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value discounted at the rate of interest implicit in the terms of the lease (as determined in good faith by us) of the obligations of the lessee under such lease for net rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at our option, be extended).
“Capitalized Lease” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Captive Insurance Subsidiary” means any Wholly Owned Subsidiary that (i) is maintained as a special purpose self-insurance subsidiary, (ii) is designated by us as a captive insurance company as provided in this definition below, and (iii) in respect of which (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (x) is guaranteed by us or any other subsidiary of ours, (y) is recourse to or obligates us or any other subsidiary of ours as a guarantor or co-obligor in any way or (z) subjects any property or asset of us or any other subsidiary of ours, directly or indirectly, contingently or otherwise, to the satisfaction thereof, (b) neither we nor any of our subsidiaries has any contract, agreement, arrangement or understanding on terms less favorable to us or such subsidiary than those that might be obtained at the time from persons that are not affiliates of ours, and (c) neither we nor any other subsidiary of ours has any obligation to maintain or preserve such entity’s financial
condition or cause such entity to achieve certain levels of operating results. Any such designation shall be evidenced to the trustee by filing with the trustee an officer’s certificate of the Company certifying that, to the best of such officer’s knowledge and belief after consultation with counsel, such designation complied with the foregoing conditions.
“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of LKQ and its subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date (which for clarification, includes right of use assets).
“Continuing Director” means, as of any date of determination, any member of our board of directors who (a) was a member of our board of directors on the issue date of the notes, or (b) was nominated for election or elected to our board of directors with the approval or recommendation of a majority of the Continuing Directors who were members of our board of directors at the time of such nomination or election.
“Default” means (a) any Event of Default or (b) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.
“Exchange Act” means the United States Securities Exchange Act of 1934.
“Funded Debt” means debt which matures more than one year from the date of creation, or which is extendable or renewable at the sole option of the obligor so secured;that it may become payable more than one year from such date or which is classified, in accordance with GAAP, as long-term debt on the consolidated balance sheet for the most-recently ended fiscal quarter (or if incurred subsequent to the date of such balance sheet, would have been so classified) of the person for which the determination is being made. Funded Debt does not include (1) obligations created pursuant to operating leases, (2) any debt or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such debt shall be extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from such time, or (3) any debt for which money in the amount necessary for the payment or redemption of such debt is deposited in trust either at or before the maturity date thereof.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the United States, which are in effect
on the issue date of the exchange notes; provided, however,for the avoidance of doubt, that any leases that are not or would not be characterized as Capitalized Leases under GAAP as in effect on the issue date of the notes shall not be reclassified as Capitalized Leases and additional liabilities associated with such leases shall not be classified as Indebtedness as a result of any changes in interpretive releases or literature regarding GAAP or any requirements by our independent auditors.
“Governmental Authority” means any nation or government, any state, province or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory, taxing or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing) and including, for the avoidance of doubt, the Council of Ministers of the European Union, the Financial Conduct Authority (acting in accordance with Part 6 of the Financial Services and Markets Act 2000 (UK)) and the Prudential Regulatory Authority.
“Hedging Obligations” of any Person means the obligations of such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices or availability, either generally or under specific contingencies, and including both physical and financial settlement transactions.
“Indebtedness” of any Person at any date means, without duplication:
(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services;
(5) all Capitalized Lease Obligations of such Person;
(6) all Indebtedness of others secured by a Security Interest on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(7) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of us or our subsidiaries that is guaranteed by us or our subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of us and our subsidiaries on a consolidated basis; and
(8) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (6), the lesser of (a) the fair market value of any asset subject to
a Security Interest securing the Indebtedness of others on the date that the foregoing prohibition will not preventSecurity Interest attaches and (b) the creation, incurrence, assumption or guarantee
amount of the following permittedIndebtedness secured.
“LKQ Netherlands” means LKQ North-West Europe B.V. (f/k/a LKQ Netherlands B.V.), a besloten vennootschap met beperkte aansprakelijkheid organized under the laws of the Netherlands.
“Permitted Security Interests” means:
(1) Security Interests (the “Permittedon property acquired, constructed, developed or improved after the issue date of the original notes by us or a subsidiary of ours and created prior to or contemporaneously with, or within 180 days after the acquisition of property which is a parcel of real property, a building, machinery or equipment;
(2) Security Interests”Interests on property at the time of acquisition which secure obligations assumed by us or a subsidiary of ours, or on the property or on the outstanding shares or Indebtedness of a corporation or firm at the time it becomes a subsidiary or is merged into or consolidated with us or a subsidiary of ours, or on properties of a corporation or firm acquired by us or a subsidiary of ours as an entirety or substantially as an entirety; provided that the Security Interests may not extend to any other property of us or such subsidiary other than proceeds and products of such property, shares or Indebtedness and accessions thereto and provided further that such Security Interests were not created in connection with such property being acquired or such corporation or firm becoming a subsidiary or being acquired;
(3) Security Interests arising from conditional sales agreements or title retention agreements with respect to property acquired by us or any subsidiary of ours;
(4) Security Interests securing Indebtedness of a subsidiary of ours owing to us or to another subsidiary of ours;
(5) Security Interests (a) to secure obligations under Credit Facility Debt or Capital Markets Debt or (b) in accounts receivable and related assets, in an aggregate principal amount under clauses (a) and (b) combined not to exceed at any time an amount equal to 17.5% of Consolidated Total Assets (as of the end of the most recent fiscal year of LKQ ended on or most recently prior to such date of determination);
(6) Security Interests existing on the issue date of the notes and extensions, renewals and replacements of any such Security Interests so long as (a) such Security Interests are not extended to any other property of us or any of our subsidiaries (b) and the amount of Indebtedness secured by such Security Interests is not increased;
(7) any Security Interest arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulations, which is required by law or governmental regulation as a condition to the transaction of any business, or the exercise of any privilege, franchise or license;
(8) carriers’, warehousemen’s, mechanics’ and other statutory liens arising in the ordinary course of business (including construction of facilities) in respect of obligations that are not due or that are being contested in good faith;
(9) Security Interests for taxes, assessments or governmental charges not yet delinquent or for taxes, assessments or governmental charges that are being contested in good faith;
(10) landlords’ liens on fixtures on premises leased in the ordinary course of business;
(11) Security Interests to secure the performance of statutory obligations, insurance, surety or appeal bonds, performance bonds, or other obligations of a like nature incurred in the ordinary course of business (including Security Interests to secure letters of credit issued to assure payment of such obligations);
(12) Security Interests on assets of us or any of our subsidiaries securing Indebtedness consisting of Hedging Obligations or Treasury Management Arrangements;
(13) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair the use of said properties in the operation of the business of us and our subsidiaries;
(14) Security Interests on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;
(15) filing of Uniform Commercial Code financing statements as a precautionary measure in connection with operating leases;
(16) bankers’ liens and rights of setoff;
(17) Security Interests in cash, cash equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;
(18) Security Interests on specific items of inventory or other goods (and the proceeds thereof) of us or a subsidiary of ours securing such Person’s obligations in respect of bankers’ acceptances or trader-related letters of credit issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(19) grants of intellectual property licenses (including software and other technology licenses) in the ordinary course of business;
(20) Security Interests incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security and employee health and disability benefits (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);
(21) deposits made in the ordinary course of business to secure liability to insurance carriers;
(22) Security Interests to secure partial, progress, advance or other payments or any Indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of construction, development, or substantial repair, alteration or improvement of the property subject to such Security Interests if the commitment for the financing is obtained not later than 180 days after the later of the completion of or the placing into operation (exclusive of test and start-up periods) of such property;
(23) deposits by or on behalf of us or any of our subsidiaries to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(24) any interest or title of a lessor under any lease entered into by us or any of our subsidiaries in the ordinary course of its business and covering only the assets so leased and, in respect of real property located in Germany, any landlord lien (Vermieter- oder Verpächterpfandrecht);
(25) Security Interests arising out of the existence of judgments or awards that do not constitute an Event of Default in respect of which we or any of our Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings;
(26) Security Interests arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution or, solely in respect of LKQ Netherlands, any Security Interest or right of set-off created pursuant to the general conditions of a bank operating in the Netherlands based on the general conditions drawn up in consultation between the Netherlands Bankers’ Association (Nederlandse Vereniging van Banken) : | (1) | and the consumers’ organisation (Consumentenbond); provided, that (a) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by us or any of our subsidiaries in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve System of the United States of America, and (b) such deposit account is not intended by us or any of our subsidiaries to provide collateral to the depository institution;
(27) Security Interests that are contractual rights of setoff (a) relating to the establishment of depository relations with banks not given in connection with the incurrence of Indebtedness, including liens or rights of set-off arising under the general terms and conditions of banks with whom any group member maintains a banking relationship in the ordinary course of business; including Security Interests of us or any of our subsidiaries under the German general terms and conditions of banks and saving banks (Allgemeine Geschäftsbedingungen der Banken und Sparkassen) or (b) relating to pooled deposit or sweep accounts to permit satisfaction of overdraft or similar obligations to banks not given in connection with the incurrence of Indebtedness and incurred in the ordinary course of business of us or the relevant subsidiary of ours and not relating to any Indebtedness of us or such subsidiary, or (c) relating to purchase orders and other similar agreements entered into with customers of us or the relevant subsidiary of ours in the ordinary course of business;
(28) Security Interests of any supplier to a subsidiary of ours in the United Kingdom in the form of customary purchase money title retention interests arising in the ordinary course of business on inventory sold by such supplier to such subsidiary;
(29) customary Security Interests and rights of setoff in favor of a credit card or debit card processor under any processor agreement and relating solely to the amounts paid or payable thereunder, and customary deposits on reserve held by such credit card or debit card processor, in each case arising in the ordinary course of business; provided that no such Security Interests permitted by this clause (29) shall remain in existence longer than five business days; or
(30) pledges and deposits made by any Captive Insurance Subsidiary in respect of capital requirements required by any applicable Governmental Authority in connection with such Captive Insurance Subsidiary’s captive insurance program.
Additionally, any Indebtedness secured by such Permitted Security Interests on property acquired, constructed, developed or improved after the date of the Indenture by the Issuer or a Subsidiary and created prior to or contemporaneously with, or within 180 days after the acquisition of property which is a parcel of real property, a building, machinery or equipment; |
| (2) | Security Interests on property at the time of acquisition which secure obligations assumed by the Issuer or a Subsidiary, or on the property or on the outstanding shares or indebtedness of a corporation or firm at the time it becomes a Subsidiary or is merged into or consolidated with the Issuer or a Subsidiary, or on properties of a corporation or firm acquired by the Issuer or a Subsidiary as an entirety or substantially as an entirety;provided that the Security Interests may not extend to any other property of the Issuer or Subsidiary other than proceeds and products of such property, shares or indebtedness and accessions thereto; |
| (3) | Security Interests arising from conditional sales agreements or title retention agreements with respect to property acquired by the Issuer or any Subsidiary; |
| (4) | Security Interests securing indebtedness of a Subsidiary owing to the Issuer or to another Subsidiary; |
| (5) | Security Interests (a) to secure obligations under Credit Facilities or (b) in accounts receivable and related assets of the types specified in the definition of “Qualified Receivables Transaction” incurred in connection with a Qualified Receivables Transaction, in an aggregate principal amount under clauses (a) and (b) combined not to exceed the greater of (x) $2,100.0 million and (y) the maximum amount that would not cause the Senior Secured Net Leverage Ratio to exceed 3.00 to 1.00 after giving effect to the incurrence of the obligations to be secured by such Security Interests; |
| (6) | Security Interests existing on the Issue Date and extensions, renewals and replacements of any such Security Interests so long as such Security Interests are not extended to any other property of the Issuer or any of its Subsidiaries; |
| (7) | any Security Interest arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulations, which is required by law or governmental regulation as a condition to the transaction of any business, or the exercise of any privilege, franchise or license; |
| (8) | carriers’, warehousemen’s, mechanics’ and other statutory liens arising in the ordinary course of business (including construction of facilities) in respect of obligations that are not due or that are being contested in good faith; |
| (9) | Security Interests for taxes, assessments or governmental charges not yet delinquent or for taxes, assessments or governmental charges that are being contested in good faith; |
| (10) | Security Interests (including judgment liens) arising in connection with legal proceedings so long as such proceedings are being contested in good faith and, in the case of judgment liens, execution thereon is stayed or not giving rise to an Event of Default; |
| (11) | landlords’ liens on fixtures on premises leased in the ordinary course of business; |
| (12) | Security Interests to secure the performance of statutory obligations, insurance, surety or appeal bonds, performance bonds, or other obligations of a like nature incurred in the ordinary course of business (including Security Interests to secure letters of credit issued to assure payment of such obligations); |
| (13) | Security Interests on assets of the Issuer or any of its Subsidiaries securing Indebtedness consisting of Hedging Obligations or Treasury Management Arrangements; |
| (14) | survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair the use of said properties in the operation of the business of the Issuer and its Subsidiaries; |
| (15) | Security Interests on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings; |
| (16) | filing of Uniform Commercial Code financing statements as a precautionary measure in connection with operating leases; |
| (17) | bankers’ liens and rights of setoff; |
| (18) | Security interests in cash, cash equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness; |
| (19) | Security Interests on specific items of inventory or other goods (and the proceeds thereof) of the Issuer or a Subsidiary securing such Person’s obligations in respect of bankers’ acceptances or trade-related letters of credit issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; |
| (20) | grants of intellectual property licenses (including software and other technology licenses) in the ordinary course of business; |
| (21) | Security Interests incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security and employee health and disability benefits (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements); |
| (22) | deposits made in the ordinary course of business to secure liability to insurance carriers; |
| (23) | Security Interests to secure partial, progress, advance or other payments or any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of construction, development, or substantial repair, alteration or improvement of the property subject to such Security Interests if the commitment for the financing is obtained not later than 180 days after the later of the completion of or the placing into operation (exclusive of test and start-up periods) of such property; or |
| (24) | other Security Interests securing Indebtedness, in an aggregate principal amount for the Issuer and its Subsidiaries together with the amount of Attributable Indebtedness incurred in connection with Sale and Leaseback Transactions, not exceeding at the time such Security Interest is created or assumed the greater of (x) $200.0 million or (y) 7.5% of Consolidated Net Tangible Assets. |
Additionally, such permitted Secured Debt includes (with certain limitations) any extension, renewal or refunding, in whole or in part, of any Secured Debt permitted at the time of the original incurrence thereof.
Any Security Interest created for the benefit of the Holders of the Notes pursuant to this covenant shall provide by its terms that such Security Interest shall be unconditionally and automatically released and discharged upon the release and discharge of the Initial Security Interest.
For purposes of determining compliance with this “Limitationthe “—Limitation on Liens” covenant, a Security Interest securing an item of Secured Debt need not be permitted solely by one category of Permitted Security Interest but may be permitted in part under any combination thereof, and if a Permitted Security Interest meets the criteria or more than one of the exceptions described in clauses (1) through (24)(30) above, the Issuerwe may, in itsour sole discretion, classify the Permitted Security Interest in any manner that complies with such covenant.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“Property” means any building, structure or other facility, together with the land upon which it is erected and fixtures comprising a part thereof, used primarily for selling automotive parts and accessories or the warehousing or distributing of such products, owned or leased by us or any Significant Subsidiary.
“Responsible Officer” means when used with respect to the Trustee, any officer within the corporate trust department of the Trustee having direct responsibility for the administration of this
covenant.Limitation on SaleIndenture and Leaseback Transactions
The Indenture provides thatany other officers of the Issuer will not, and may not permitTrustee to whom any Subsidiary to, engagecorporate trust matter is referred because of such person’s knowledge of any familiarity with the particular subject.
“Secured Debt” means outstanding Indebtedness of us or a subsidiary of ours which is secured by (a) a Security Interest in any
Sale and Leaseback Transaction unless: | (1) | the Issuer or such Subsidiary would be entitled to incur Secured Debt pursuant to the covenant described under the caption “Limitations on Liens” equal in amount to the net proceeds of the property sold or transferred or to be sold or to be transferred pursuant to such Sale and Leaseback Transaction and secured by a Security Interest on the property to be leased, without equally and ratably securing the debt securities outstanding under the Indenture as provided under said section; or |
| (2) | the Issuer or a Subsidiary shall apply, within 180 days after the effective date of such sale or transfer, an amount equal to such net proceeds to (i) the acquisition, construction, development or improvement of properties, facilities or equipment which are, or upon such acquisition, construction, development or improvement will be, a Principal Facility or Facilities or a part thereof or (ii) the redemption of Notes issued under the Indenture or to the repayment or redemption of long-term Indebtedness of the Issuer or of any Subsidiary, or in part to such acquisition, construction, development or improvement and in part to such redemption and/or repayment. In lieu of applying an amount equal to such net proceeds to such redemption the Issuer may, within 180 days after such sale or transfer, deliver to the appropriate indenture trustee Notes issued under the Indenture or long-term Indebtedness for cancellation and thereby reduce the amount to be applied to the redemption of such Notes or long-term Indebtedness by an amount equivalent to the aggregate principal amount of Notes or long-term Indebtedness. |
Merger, Consolidation or Sale of Assets
The Indenture provides that (i) the Issuer will not consolidate or merge with or into any other Person or Transfer all or substantially all of the properties or assets of the Issuer and its Subsidiaries, taken asus or any such subsidiary, or (b) a whole and (ii) the Issuer will not permitSecurity Interest in any shares of its Subsidiaries to,stock owned directly or indirectly by us in a singlesubsidiary of ours. The securing in the foregoing manner of any previously unsecured debt shall be deemed to be the creation of Secured Debt at the time such security is given. The amount of Secured Debt at any time outstanding shall be the aggregate principal amount then owing thereon by us and our subsidiaries.
“Senior Funded Debt” means all Funded Debt of ours or our subsidiaries (except Funded Debt, the payment of which is subordinated to the payment of the notes).
“Security Interests” means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, security interest, lien, encumbrance or other security arrangement of any kind or nature on or with
respect to such property or assets.
“Significant Subsidiary” means any subsidiary that would be a significant subsidiary of ours within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
“Transfer” means to sell, assign, transfer, lease (other than pursuant to an operating lease entered into in the ordinary course of business), convey or otherwise dispose of, including by consolidation, merger, liquidation, dissolution or otherwise, in one transaction or a series of related transactions, Transfer alltransactions.
“Treasury Management Arrangement” means any agreement or substantiallyother arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.
“Wholly Owned Subsidiary” of any Person means a subsidiary of such Person all of the
propertiesoutstanding Voting Stock or
assetsother ownership interests of
which (other than directors’ qualifying shares) shall at the
Issuer and its Subsidiaries, taken as a whole, in each case, to, another Person unless:(1) the Issuer is the continuing corporation, or the successor is a corporation, limited liability company, partnership or trust organized and existing under the laws of the United States or a state thereof and the successor person expressly assumes by a supplemental indenture or amendment of the relevant documents the Issuer’s obligations under the Notes, the Indenture and the Registration Rights Agreement;
(2) the Issuer or the successor person, as the case maytime be is not immediately after such transaction, in default in the performance of any covenant or condition under the Indenture; and
(3) after giving effect to the transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred or be continuing.
Upon any consolidation, combination or merger of the Issuer, or any Transfer of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, in accordance with the foregoing, in which the Issuer is not the continuing obligor under the Notes, the surviving entity formedowned by such consolidationPerson or into which the Issuer is merged or to which such Transfer of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, is made will succeed to, and be substituted for, and may exercise every right and power of the Issuer under the Indenture and Notes with the same effect as if such surviving entity had been named therein as the Issuer, and the Issuer and all of the Guarantors will be released from the obligation to pay the principal of and interest on such Notes or in respect of its related Note Guarantee, as the case may be, and all of the Issuer’s or such Guarantor’s other obligations and covenants under such Notes, the Indenture and its related Note Guarantee, if applicable. The Issuer shall deliver, or cause to be delivered, to the Trustee an officers’ certificate and an Opinion of Counsel, each to the effect that such consolidation, merger, sale, conveyance, assignment, transfer, lease or other disposition complies with the requirements of the Indenture, and an Opinion of Counsel stating that the Notes, the Indenture and Note Guarantees, as applicable, constitute valid and binding obligations of the Issuer or applicable Guarantor or other surviving entity, subject to customary exceptions.
This “Merger, Consolidation or Sale of Assets” covenant will not apply to any Transfer of assets between or among the Issuer and anyby one or more Wholly Owned Subsidiaries of its Subsidiariessuch Person or between or among anyby such Person and one or more of the Issuer’s Subsidiaries. Clause (3) of the first paragraph of this covenant will not apply to (1) any merger or consolidation of the Issuer with or into one of itsWholly Owned Subsidiaries for any purpose or (2) any merger or consolidation of the Issuer or a Subsidiary solely for the purpose of reincorporating the Issuer or a Subsidiary in another jurisdiction.
Additional Note Guarantees
If, on or after the Issue Date:
(1) the Issuer or any of its Subsidiaries acquires or creates another Domestic Subsidiary that incurs any Indebtedness under Credit Facilities or any syndicated loan or capital markets debt securities in an aggregate principal amount greater than or equal to $150.0 million or guarantees any such Indebtedness of the Issuer or any of its Domestic Subsidiaries; or
(2) any Domestic Subsidiary of the Issuer incurs Indebtedness under Credit Facilities or any syndicated loan or capital markets debt securities in an aggregate principal amount greater than or equal to $150.0 million or guarantees any such Indebtedness of the Issuer or any of its Domestic Subsidiaries and that Domestic Subsidiary was not a Guarantor immediately prior to such incurrence or guarantee (an “Additional Obligor”),
then that newly acquired or created Domestic Subsidiary or Additional Obligor, as the case may be, must become a Guarantor and execute a supplemental indenture substantially in the form of an exhibit to the Indenture within 30 Business Days of the date on which it was acquired or created or became an Additional Obligor.
In addition, the Issuer shall have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that such supplemental Indenture complies with the applicable provisions of the Indenture, that all conditions precedent in the Indenture relating to such transaction have been satisfied, and such opinion of counsel shall additionally state that such supplemental Indenture is enforceable against the new Guarantor, subject to customary qualifications.
A Note Guarantee of any Guarantor will be subject to release and discharge as described under the caption “—Ranking and Guarantees.”
Reports
The Indenture provides that, whether or not required by the rules and regulations of the Securities and Exchange Commission (the “SEC”), so long as any Notes are outstanding thereunder, the Issuer will furnish to the Trustee and Holders the following:
(1) all quarterly and annual financial information of the Issuer that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuer were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Issuer and its consolidated Subsidiaries and, with respect to the annual information only, a report thereon by the Issuer’s certified independent accountants; and
(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Issuer were required to file such reports (during any period in which the Issuer is not required to file reports with the SEC, such current reports need only be prepared or delivered if the Issuer determines in good faith that the information to be reported is material to the Holders of the Notes or the business, operations, assets, liabilities or financial position of the Issuer and its Subsidiaries, taken as a whole),
in each case, within the time periods specified in the SEC’s rules and regulations (and, during any period in which the Issuer is not required to file reports with the SEC, within the time periods specified in the SEC’s rules and regulations applicable to a “non-accelerated filer”).
In addition, whether or not required by the rules and regulations of the SEC, the Issuer will make all such information publicly available (including via a non-password protected website) within the time periods specified in the SEC’s rules and regulations (unless the SEC will not accept such a filing) and make such information available to Holders of the Notes upon request. In addition, the Issuer and the Guarantors will, for so long as any Notes remain outstanding, furnish to the Holders of such Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Whether the Issuer files such reports with the SEC or posts its reports on its website, the public posting of such reports shall satisfy any requirement hereunder to deliver such reports to Holders of the Notes. The Issuer will at all times comply with TIA §314(a). The terms of the Indenture shall not impose any duty on the Issuer under the Sarbanes-Oxley Act of 2002 and the related SEC rules that would not otherwise be applicable to it.
Delivery of such reports and information to the Trustee shall be for informational purposes only, and the Trustee’s receipt of them shall not constitute constructive notice of any information contained therein or determinable from information contained therein (including the Issuer’s compliance with any of its covenants under the Indenture as to which the Trustee is entitled to rely exclusively on an officer’s certificate).
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Issuer or of any Subsidiary of the Issuer, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver may not be effective to waive liabilities under the federal securities laws.
Person.
Events of Default and Remedies
The Indenture provides that each of the following constitutes an “Event of Default”
: with respect to each series of exchange notes:
(1) default for 30 consecutive days in the payment when due of interest with respect to the
Notes issued thereunder;exchange notes of such series;
(2) default in payment when due of principal or premium, if any, on the
Notes issued thereunderexchange notes of such series at maturity, upon redemption or otherwise;
(3) failure by
the Issuerus or any
Subsidiarysubsidiary of ours for 60 consecutive days after receipt of notice from the
Trusteetrustee or
Holdersholders of at least 25% in aggregate principal amount of
the Notesa series of exchange notes then outstanding under the Indenture (with a copy to the
Trustee)trustee) to comply with the provisions described under “—
Repurchase at the Option of Holders—Change of Control”
; with respect to the exchange notes of such series;
(4) failure by
the Issuerus or any
Subsidiarysubsidiary of
the Issuerours for 60 consecutive days after receipt of notice from the
Trusteetrustee or the
Holdersholders of at least 25% in aggregate principal amount of
the Notesexchange notes of a series then outstanding under the Indenture (with a copy to the
Trustee)trustee) to comply with any covenant or agreement contained in the Indenture
in respect of the exchange notes of such series (other than the covenants and agreements specified in clauses (1) through (3) of this paragraph);
(5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of
the Issuerours or any of
its Subsidiariesour subsidiaries or the payment of which is
Guaranteedguaranteed by
the Issuerus or any of
its Subsidiariesour subsidiaries (other than Indebtedness owed to
the Issuerus or
a Subsidiary)such subsidiary), whether such Indebtedness or
Guaranteeguarantee now exists or is created after the
Issue Date,issue date of the original notes, which default (a) is caused by a failure to pay when due at final stated maturity (giving effect to any grace period related thereto) principal of such Indebtedness (a
“Payment Default”“Payment Default”) or (b) results in the acceleration of such Indebtedness prior to its stated maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $100.0 million or more;
and, in each case, the Issuer has received notice specifying the default from the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding (with a copy to the Trustee) and does not cure the default within 30 days;
(6) failure by
the Issuerus or any of
its Subsidiariesour subsidiaries to pay final and non-appealable judgments (net of any amounts covered by insurance and as to which such insurer has not denied responsibility or coverage in writing) aggregating $100.0 million or more, which judgments are not paid, discharged, bonded, stayed or waived within 60 days after such judgment becomes final, and in the event such judgment is covered in full by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;
(7) certain events of bankruptcy or insolvency with respect to
the Issuerus, any subsidiary guarantor or any
Subsidiary that is a Significant Subsidiary or group of Subsidiaries of the Issuer that, together, would constitute a Significant Subsidiary; and
(8) any
Note Guaranteeguarantee of any
Guarantor that is a Significant Subsidiary ceasessubsidiary guarantor shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect in all material respects (other than in accordance with the terms of such
Note Guaranteeguarantee and the Indenture) or
is declared null and void and unenforceable or found to be invalid or any
Guarantorsubsidiary guarantor denies its liability under its
Note Guaranteesubsidiary guarantee (other than by reason of release of a
Guarantorsubsidiary guarantor from its
Note Guaranteesubsidiary guarantee in accordance with the terms of the Indenture and such
Note Guarantee)subsidiary guarantee).
If any Event of Default under an Indenture occurs and is continuing, the Trusteetrustee or the Holdersholders of at least 25% in aggregate principal amount of the Notesany series of exchange notes then outstanding under the Indenture may declare all Notes issued under the Indenturenotes of such series to be due and payable by notice in writing to the Issuerus and the Trustee,trustee, in the case of notice by Holders,holders of the exchange notes of such series, specifying the respective Event of Default and that it is a “notice of acceleration” and the same shall become immediately due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising under clause (7) above with respect to the Issuer,us, all outstanding Notesexchange notes of each series then outstanding under the Indenture will become due and payable without further action or notice. The Holdersholders of any Notesexchange notes may not enforce the Indenture or the Notesnotes except as provided in the Indenture.
Subject to certain limitations, the
Holdersholders of a majority in aggregate principal amount of the
exchange notes of a series then outstanding
Notesand issued under the Indenture may direct the
Trusteetrustee in its exercise of any trust or
power.power with respect to such series of exchange notes.
The Holdersholders of a majority in aggregate principal amount of the Notesexchange notes of a series then outstanding, under the Indenture, by written notice to the Trustee,trustee, may (subject to certain conditions) on behalf of the Holdersholders of all of the Notes issued under the Indentureexchange notes of such series waive any existing Default or Event of Default and its consequences under the Indenture with respect to such series of exchange notes, except a continuing Default or Event of Default in the payment of interest or premium on, or principal of, notes of such Notes.series. The Trusteetrustee may withhold from the Holdersholders of exchange notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in such holders’ interest.
The trustee shall not be deemed to have notice of any Default or Event of Default unless a written notice of any event which is in fact such a Default is received by a Responsible Officer of the
Holders’ interest.The Issuer istrustee at the Corporate Trust Office of the trustee, and such notice references the notes and the Indenture.
We are required to deliver to the
Trusteetrustee annually a statement regarding compliance with the Indenture, and
the Issuer iswe are required, within
5five business days after an executive officer of
the Issuerours becomes aware of any Default or Event of Default, to deliver to the
Trusteetrustee a statement specifying such Default or Event of Default.
Satisfaction
Modification and
DischargeThe Indenture will be discharged and will, subjectWaiver
Subject to
certain surviving provisions, cease to be of further effect as to all Notes issued thereunder when:(1) The Issuer delivers to the Trustee all outstanding Notes issued underspecific exceptions, the Indenture (other than Notes replaced because of mutilation, loss, destruction or wrongful taking) for cancellation; or
(2) all Notes outstanding under the Indenture have become due and payable, whether at maturity or as a result of the mailing or sending of a notice of redemption as described above, or will become due and payable within one year, and the Issuer or any Guarantor irrevocably deposits with the Trustee as funds in trust solely for the benefit of the Holders, cash in U.S. dollars, noncallable U.S. government securities, or a combination thereof, sufficient to pay at maturity or upon redemption all Notes outstanding under the Indenture, including interest thereon,
and if in either case the Issuer or any Guarantor pays all other sums payable under the Indenture by it. The Trustee will acknowledge satisfaction and discharge of the Indenture on demand of the Issuer accompanied by an officers’ certificate and an Opinion of Counsel, upon which the Trustee shall have no liability in relying, stating that all conditions precedent to satisfaction and discharge have been satisfied and at the cost and expense of the Issuer.
Legal Defeasance and Covenant Defeasance
The Issuer may, at its option and at any time, elect to have all of its obligations and the obligations of the Guarantors discharged with respect to the Notes outstanding under the Indenture (“Legal Defeasance”), except for:
(1) the rights of the Holders of the Notes outstanding under the Indenture to receive payments in respect of the principal amount of, premium, if any, and interest on such Notes when such payments are due from the trust referred to below;
(2) the Issuer’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Issuer may, at its option and at any time, elect to have all of its obligations and the obligations of the Guarantors released with respect to certain covenants that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default under the Indenture. In the event Covenant Defeasance occurs under the Indenture, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under the caption “—Events of Default and Remedies” will no longer constitute an Event of Default under the Indenture.
In order to exercise either Legal Defeasance or Covenant Defeasance under the Indenture:
(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes issued under the Indenture, cash in U.S. dollars, non-callable U.S. government securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants (such opinion shall be delivered to the Trustee and upon which the Trustee shall have no liability in relying), to pay the principal, premium, if any, and interest on the Notes outstanding under the Indenture on the stated maturity or on the applicable optional redemption date, as the case may be, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States (upon which the Trustee shall have no liability in relying) confirming that (a) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Notes outstanding under the Indenture will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States (upon which the Trustee shall have no liability in relying) confirming that the Holders of the Notes outstanding under the Indenture will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound;
(6) the Issuer must deliver to the Trustee an officers’ certificate (upon which the Trustee shall have no liability in relying) stating that the deposit was not made by the Issuer with the intent of preferring the Holders of Notes issued under the Indenture over the other creditors of an Issuer with the intent of defeating, hindering, delaying or defrauding creditors of the Issuer or others; and
(7) the Issuer must deliver to the Trustee an officers’ certificate and an Opinion of Counsel upon which the Trustee shall have the right to rely, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Transfer and Exchange
A Holder of Notes may transfer or exchange Notes in accordance with the terms of the Indenture and in compliance with applicable law. The registrar and Trustee may require a Holder of Notes, among other things, to furnish appropriate endorsements and transfer documents and the Issuer or the Trustee may require a Holder of Notes to pay any taxes and fees required by law or permitted by the Indenture. The Issuer is not required to transfer or exchange any Note selected for redemption. Also, the Issuer is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all purposes.
Amendment, Supplement and Waiver
Except to the extent provided in the next three succeeding paragraphs, the Indenture, the Notes governed thereby or any Note Guarantee issued thereunder may be amended or modified as it relates to each series of exchange notes with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes issued under the Indenture voting as a single class (including, without limitation, consents obtained in connection with a purchase of, tender offer or exchange offer for Notes), and any existing default or compliance with any provision of the Indenture, the Notes governed thereby or any Note Guarantee issued thereunder may be waived with the consent of the Holdersholders of a majority in aggregate principal amount of the exchange notes of such series then outstanding. Compliance with any provision of the covenants described above under the caption “—Certain Covenants” with respect to each series of the exchange notes also may be waived with the consent of the holders of a majority in aggregate principal amount then outstanding Notes issued underof the Indenture voting as a single class (including, without limitation, consents obtained in connection with a purchaseexchange notes of tender offer or exchange offer for Notes).
Except as provided in the immediately succeeding paragraph,such series. However, without the consent of each Holderholder of Notes issued under the Indenturean outstanding exchange note affected thereby, however, anno amendment or waivermodification may, not (with respect to any Note held by a non-consenting Holder):
(1)among other things:
• reduce the
percentage in principal amount of
Notes issued under the
Indentureoutstanding exchange notes whose
Holdersholders must consent to an amendment,
modification, supplement or
waiver;(2) reduce the principal amount of or change the fixed maturity of any Notes, or alter the provisions with respectwaiver to the redemption ofIndenture or any such Notes other than, except as set forth in clause (7) below, the provisions relating to the covenants described under the caption “—Repurchase at the Option of Holders”;
(3)exchange note;
• reduce the rate of or
changeextend the time for payment of interest on any
such Notes;(4) waive a Default or Event of Default inexchange note;
• reduce the payment of principal of or extend the stated maturity of any exchange note;
• reduce the premium
ifpayable upon the redemption of any
note or
interest onchange the time at which any
such Notes (except a rescission of acceleration of Notes byexchange note may or shall be redeemed in accordance with the
Holders of at least a majority in aggregate principal amount of the then outstanding Notes issued under the Indenture and a waiver of the payment default that resulted from such acceleration);(5)Indenture;
• make any such Noteexchange note payable in a currency other than that stated in the exchange note;
• release any security that may have been granted in respect of the exchange notes following the initial issuance of such
Note;(6)notes in compliance with the terms of the Indenture;
• other than in accordance with the provisions of the Indenture, eliminate any existing subsidiary guarantee of the exchange notes;
• impair the right to receive, and to institute suit for the enforcement of, any payment with respect to any exchange note; or
• make any change
toin the provisions of the Indenture relating to
waiver of past Defaults or the rights of
Holdersthe holders of a majority in principal amount of the
Notes issued thereunderexchange notes to
receive paymentsdirect the trustee in the exercise of
principal ofremedies or
interest onto waive defaults or in the
Notes;(7) after the Issuer’s obligation to purchase Notes arises thereunder, amend, change or modify in any material respect the obligations of the Issuer to make and consummate a Change of Control Offer with respect to a Change of Control that has occurred, including, without limitation, in each case, by amending, changing or modifying any of the definitions relating thereto;
(8) release the Issuer or any Guarantor that is a Significant Subsidiary from any of its obligations under its Note Guarantee or the Indenture otherwise than in accordance with the terms of the Indenture; or
(9) modify or change any provisionprovisions of the Indenture affecting the rankingrelating to modification of the Notes or Note Guarantees issued thereunder in a manner adverse toIndenture with the Holdersconsent of Notes issued thereunder.
the holders of the exchange notes.
Without the consent of any Holder of Notes, the Issuer,holders of the Guarantorsexchange notes, we, the subsidiary guarantors and the Trusteetrustee may amend or supplementthe Indenture:
• to evidence the succession pursuant to the Indenture
the Notes governed therebyof another Person to us or
the Note Guarantees issued thereunder:to cure any ambiguity, omission, defect or inconsistency;
to provide for uncertificated Notes in addition to or in place of certificated Notes;
to provide fora subsidiary guarantor and the assumption by that Person of the Issuercovenants, agreements and obligations of ours or any Guarantor’s obligations to the Holders of such Notessubsidiary guarantor, as applicable, in the case of a merger or consolidation or sale of all or substantially all ofIndenture and in the Issuer’s or such Guarantor’s assets;
to secure the Notes;
to add any Guarantor or release any Guarantor from its Note Guarantee if such release isexchange notes, in each case in accordance with the terms of the Indenture;
• to surrender any right or power conferred upon us, to add further covenants, restrictions, conditions or provisions for the protection of the holders of the exchange notes, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an event of default permitting the enforcement of all or any of the remedies provided in the Indenture;
• to cure any ambiguity or to correct or supplement any provision contained in the Indenture, or any supplemental indenture, or in any exchange note that may be defective or inconsistent with any other provision contained in the Indenture, or any supplemental indenture, or in any exchange note;
• to convey, transfer, assign, mortgage or pledge any property to or with the trustee, or to make other provisions in regard to matters or questions arising under the Indenture as shall not adversely affect the interests of any holders of the exchange notes;
• to permit the qualification of the Indenture or any supplemental indenture under the Trust Indenture Act, as then in effect, except this shall not permit or authorize the inclusion in any supplemental indenture of any provisions referred to in Section 316(a)(2) of the Trust Indenture Act;
• to comply with the covenant described under the caption “—Certain Covenants—Merger, Consolidation, or Sale of Assets;”
• to add guarantees with respect to the exchange notes or to secure the exchange notes;
• to make any change that does not adversely affect the rights of any holder of the exchange notes;
• to evidence and provide for the acceptance of appointment by a successor or separate trustee with respect to the exchange notes and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts under the Indenture by more than one trustee;
• to establish the form or terms of exchange notes as permitted by the Indenture; and
• to conform the text of the Indenture the Notes, or the Note Guaranteesexchange notes to any provision of this Description“Description of the NotesExchange Notes” to the extent that such provision in this “Description of the Exchange Notes” was intended to be a verbatim recitation of a provision of the Indenture the Notes, or the Note Guarantees,exchange notes, which intent may be evidenced by an officer’sofficers’ certificate to that effect;effect.
to provide for the issuance of Additional Notes in accordance with the limitations set forth in the
The Indenture as of the date of the Indenture;
to make any change that would provide any additional rights or benefits to the Holders of such Notes or that does not adversely affectrequire the rights under the Indentureholders of any Holder thereunder in any material respect; or
notes to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
Thegive consent of the Holders is not necessary under the Indenture to approveapproving the particular form of any proposed amendment or waiver.supplemental indenture. It is sufficient if such consent approves the substance of the proposed amendment.
After an amendment
under the Indenture becomes effective with respect to the exchange notes, we are required to deliver to holders of the exchange notes, by first-class mail or
waiver.Concerningdelivered electronically if held by DTC, to the address of such holder appearing in the security register or otherwise in accordance with the procedures of DTC, a notice briefly describing such amendment. However, our failure to give such notice to all holders of the exchange notes, or any defect in such notice, will not impair or affect the validity of the amendment.
Defeasance
Subject to satisfaction of certain conditions specified in the Indenture, we at any time may terminate all of our obligations with respect to each series of the exchange notes, and under the Indenture, with respect to the legal defeasance of the exchange notes of such series, except for specific obligations including:
• those respecting the defeasance trust;
• to register the transfer or exchange of the exchange notes of such series;
• to replace mutilated, destroyed, lost or stolen exchange notes of such series;
• to maintain a registrar and paying agent in respect of the exchange notes of such series;
• to provide certain information to the trustee; and
• to compensate and reimburse the trustee.
Subject to satisfaction of certain conditions specified in the Indenture, we at any time may terminate our obligations with respect to each series of the exchange notes under the covenants described under the caption “—Certain Covenants.”
We may exercise our legal defeasance option notwithstanding our prior exercise of the covenant defeasance option. If we exercise our legal defeasance option with respect to a series of exchange notes, payment of such series of exchange notes may not be accelerated because of an Event of Default with respect thereto. If we exercise the covenant defeasance option with respect to a series of exchange notes, payment of such series of exchange notes may not be accelerated because of an Event of Default specified in clause (3) or (4) of the definition of Event of Default (with respect to the covenants described under “—Change of Control” and “—Certain Covenants”). If we exercise our legal defeasance option or our covenant defeasance option, each subsidiary guarantor will be released from its obligations with respect to its subsidiary guarantee.
In order to exercise either defeasance option with respect to a series of exchange notes, we must deposit irrevocably in trust, with the trustee, money or U.S. government obligations, which trust will be known as the defeasance trust. Through the payment of interest and principal on the exchange notes of the applicable series in accordance with their terms the defeasance trust will provide money in an amount sufficient to pay all the principal of, premium, if any, on, and interest on such series of notes, to redemption or maturity, as the case may be. We also must comply with other specified conditions, including delivery to the trustee of an opinion of counsel to the effect that:
• holders of the exchange notes of the applicable series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance;
• holders of the exchange notes of the applicable series will be subject to U.S. federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred;
• in the case of legal defeasance only, the opinion of counsel must be based on a ruling of the Internal Revenue Service or other change in applicable federal income tax law; and
• the defeasance trust will not constitute an investment company under the Investment Company Act of 1940, as amended.
Discharge of the Indenture
If at any time (i) we deliver to the trustee all exchange notes of a series authenticated (other than any exchange notes of such series that have been destroyed, lost or stolen and that have been replaced or paid as provided in the Indenture and for whose payment money and/or U.S. Government obligations have been deposited in trust or segregated and held in trust by us and thereupon repaid to us or discharged from such trust, as provided in the Indenture) for cancellation or (ii) the notes of such series not theretofore delivered to the trustee for cancellation have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption, and we irrevocably deposit with the trustee cash in United States dollars, noncallable U.S. Government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay at maturity or upon redemption the exchange notes of such series not theretofore delivered to the trustee for cancellation, and if in either case we pay all other sums related to exchange notes of such series payable under the Indenture by us and we have delivered to the trustee an opinion of counsel and an officer’s certificate, each stating that all conditions precedent relating to the satisfaction and discharge of the Indenture with respect to such series of notes have been complied with, then the Indenture shall, subject to certain surviving provisions, cease to be of further effect with respect to such series of exchange notes. The trustee, on demand and at our expense, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture.
The Indenture provides that, except during the continuance of an Event of Default, the trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of an Event of Default, the trustee will exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.
The Indenture contains
certain limitations
required by the Trust Indenture Act on the rights of the
Trustee,trustee, should
the Trustee in its capacity as Trusteeit become
a creditorone of
the Issuer,our creditors, to obtain payment of claims in certain cases or to realize on certain
assetsproperty received
by it in respect of any such claim as security or otherwise. The
Trustee in its individual capacitytrustee is permitted to engage in other transactions with
the Issuer;us or any of our affiliates; provided, however,
that if
the Trusteeit acquires any conflicting interest
as(as defined
underin the Indenture or in the Trust Indenture
Act,Act), it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as Trustee or resign.
The Holders of a majority in aggregate principal amount of the then outstanding Notes under the Indenture have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee under the Indenture, subject to certain exceptions. The Indenture provides that in case an Event of Default of which a responsible officer of the Trustee has actual knowledge (as provided in the Indenture) shall occur under the Indenture (which shall not be cured or waived), the Trustee will be required, in the exercise of its rights and powers vested in it by the Indenture, to use the degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes issued thereunder, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. The Trustee’s fees, expenses and indemnities are included in the amounts guaranteed by the Note Guarantees.
Governing
Law; Jury Trial WaiverLaw
The Indenture, the
Notesexchange notes and the
Note Guarantees will besubsidiary guarantee are governed by and
shall be construed in accordance with the laws of the State of New
York. The Indenture provides that the Company, the Guarantors and the Trustee, and each HolderYork, without regard to conflicts of
a Note by its acceptance thereof, irrevocably waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury in any legal proceeding arising out of or relating to the Indenture, the Notes, the Note Guarantees or any transaction contemplated thereby.Certain Definitions
Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
“Additional Assets” means:
(1) any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Subsidiary;
(2) the Capital Stock of a Person that becomes a Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or another Subsidiary; or
(3) Capital Stock constituting a non-controlling interest in any Person that at such time is a Subsidiary.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
“amend” means to amend, supplement, restate, amend and restate or otherwise modify; and “amendment” shall have a correlative meaning.
“Applicable Treasury Rate” for any Make-Whole Redemption Date means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two business days prior to such Make-Whole Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Make-Whole Redemption Date to May 15, 2018; provided, however, that if the period from the Make-Whole Redemption Date to May 15, 2018 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Applicable Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given except that if the period from the Make-Whole Redemption Date to May 15, 2018 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
“asset” means any asset or property, whether real, personal or mixed, tangible or intangible.
“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Issuer or any Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:
(1) any shares of Capital Stock of a Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Subsidiary);
(2) all or substantially all the assets of any division or line of business of the Issuer or any Subsidiary; or
(3) any other assets or property of the Issuer or any Subsidiary outside of the ordinary course of business of the Issuer or such Subsidiary.
Notwithstanding the foregoing, none of the following shall be deemed to be an Asset Disposition:
(1) a disposition by a Subsidiary to the Issuer or by the Issuer or a Subsidiary to a Subsidiary;
(2) for purposes of the covenant described under “—Repurchase at the Option of Holders—Asset Dispositions” only, a disposition of all or substantially all the assets of the Issuer in compliance with “—Merger, Consolidation or Sale of Assets” or a disposition that constitutes a Change of Control pursuant to the Indenture;
(3) a sale, contribution, conveyance or other transfer of accounts receivable and related assets of the type specified in the definition of Qualified Receivables Transaction by or to a Receivables Entity in a Qualified Receivables Transaction;
(4) the license or sublicense of intellectual property or other intangibles;
(5) the lease, assignment or sublease of any real or personal property in the ordinary course of business;
(6) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;
(7) the granting of Security Interests not prohibited by the covenant described above under the caption “—Limitation on Liens”;
(8) the disposition by the Issuer or any of its Subsidiaries in the ordinary course of business of (i) cash and cash equivalents, (ii) inventory and other assets acquired and held for resale in the ordinary course of business, (iii) damaged, worn out or obsolete assets or assets that, in the Company’s reasonable judgment, are no longer used or useful in the business of the Issuer or its Subsidiaries, or (iv) rights granted to others pursuant to leases or licenses, to the extent not materially interfering with the operations of the Issuer or its Subsidiaries;
(9) a Restricted Payment that does not violate the covenant described above under the caption “—Limitations on Restricted Payments”;
(10) any exchange of assets for assets (including a combination of assets (which assets may include Equity Interests or any securities convertible into, or exercisable or exchangeable for, Equity Interests, but which assets may not include any Indebtedness) of comparable or greater market value or usefulness to the business of the Issuer and its Subsidiaries, taken as a whole, which in the event of an exchange of assets with a fair market value in excess of (a) $25.0 million shall be evidenced by an officer’s certificate and (b) $50.0 million shall be set forth in a resolution approved by at least a majority of the members of the Board of Directors of the Issuer;providedthat the Issuer shall apply any cash or cash equivalents received in any such exchange of assets as described in the second paragraph under “—Repurchase at the Option of Holders—Asset Dispositions”;
(11) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(12) the issuance by the Issuer or a Subsidiary of preferred stock or any convertible securities;
(13) any sale of Capital Stock or Indebtedness or other securities of a Foreign Subsidiary;
(14) any sale of assets received by the Issuer or any Subsidiary upon foreclosure on a Security Interest;
(15) the unwinding of any Hedging Obligations (including sales under forward contracts);
(16) any dispositions to the extent required by, or made pursuant to customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding agreements;
(17) the lease or sublease of office space;
(18) the abandonment, farm-out, lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business;
(19) dispositions of property pursuant to casualty events; and
(20) a single transaction or series of related transactions that involve the disposition of assets with a fair market value of less than the greater of (x) $50.0 million and (y) 5% of Consolidated Net Tangible Assets.
“Attributable Indebtedness,” when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at a rate borne by the Notes, compounded on a semiannual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.
“Board of Directors” means, with respect to any Person, the board of directors or comparable governing body of such Person.
“Capital Stock” means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; and
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited).
“Capitalized Lease” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Change of Control” means the occurrence of any of the following:
(1) any Transfer (other than by way of merger or consolidation) of all or substantially all of the assets of the Issuer and its Subsidiaries taken as a whole to any “person” (as defined in Section 13(d) of the Exchange Act) or “group” (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than any Transfer to the Issuer or one or more Subsidiaries of the Issuer;
(2) the adoption of a plan for the liquidation or dissolution of the Issuer (other than in a transaction that complies with the covenant described under “—Certain Covenants—Merger, Consolidation or Sale of Assets”);
(3) a “person” (as defined above) or “group” (as defined above) becomes, directly or indirectly, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of the voting power of the Voting Stock of the Issuer, other than as a result of (i) any transaction where the voting power of the Voting Stock of the Issuer immediately prior to such transaction constitutes or is converted into or exchanged for a majority of the voting power of the Voting Stock of such beneficial owner or (ii) any merger or consolidation of the Issuer with or into any “person” (as defined above) (a “Permitted Person”) or a Subsidiary of a Permitted Person, in each case, if immediately after such transaction no person (as defined above) is the beneficial owner (as defined above), directly or indirectly, of more than 50% of the voting power of the Voting Stock of such Permitted Person; or
(4) the first day on which a majority of the members of the Board of Directors of the Issuer are not Continuing Directors.
“Consolidated Cash Flow Available for Fixed Charges” means, with respect to any Person for any period:
(1) the sum of, without duplication, the amounts for such period, taken as a single accounting period, of:
(a) Consolidated Net Income;
(b) Consolidated Non-cash Charges;
(c) Consolidated Interest Expense;
(d) Consolidated Income Tax Expense (other than income tax expense (either positive or negative) attributable to extraordinary gains or losses); and
(2) less non-cash items increasing Consolidated Net Income for such period, other than (a) the accrual of revenue consistent with past practice, and (b) reversals of prior accruals or reserves for cash items previously excluded in the calculation of Consolidated Non-cash Charges.
In calculating “Consolidated Cash Flow Available for Fixed Charges” for any period, if any Asset Disposition or Asset Acquisition (whether pursuant to a stock or an asset transaction) shall have occurred since the first day of any twelve month period for which the “Consolidated Cash Flow Available for Fixed Charges” is being calculated, such calculation shall give pro forma effect to such Asset Disposition or Asset Acquisition including, for the avoidance of doubt, any indebtedness incurred in connection with such Asset Disposition or Asset Acquisition.
For the purposes of calculating “Consolidated Cash Flow Available for Fixed Charges,” “Asset Acquisition” means any acquisition of property or series of related acquisitions of property that constitutes all or substantially all of the assets of a business, unit or division of a Person or constitutes all or substantially all of the common stock (or equivalent) of a Person; and “Asset Disposition” means any disposition of property or series of related dispositions of property that involves all or substantially all of the assets of a business, unit or division of a Person or constitutes all or substantially all of the common stock (or equivalent) of a Subsidiary.
“Consolidated Fixed Charge Coverage Ratio” means the ratio of Consolidated Cash Flow Available for Fixed Charges of the Issuer and its Subsidiaries during the most recent four consecutive full fiscal quarters for which financial statements are available (the “Four-Quarter Period”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the “Transaction Date”) to Consolidated Fixed Charges of the Issuer and its Subsidiaries for the Four-Quarter Period. Notwithstanding anything to the contrary set forth in the definitions of Consolidated Cash Flow Available for Fixed Charges and Consolidated Interest Expense (and all component definitions referenced in such definitions), whenever pro forma effect is to be given to the incurrence or repayment of Indebtedness or the issuance or redemption of Preferred Stock, the pro forma calculations shall be determined in good faith by a responsible officer of the Issuer.
For purposes of this definition, Consolidated Cash Flow Available for Fixed Charges and Consolidated Fixed Charges shall be calculated after giving effect on a pro forma basis for the period of such calculation to the incurrence of any Indebtedness or the issuance of any Preferred Stock of the Issuer or any Subsidiary (and the application of the proceeds thereof) and any repayment of Indebtedness or redemption of other Preferred Stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period.
In calculating Consolidated Fixed Charges for purposes of determining the denominator (but not the numerator) of this Consolidated Fixed Charge Coverage Ratio:
(a) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date (although interest with respect to any Indebtedness for periods while the same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while the same was actually outstanding);
(b) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period (although interest with respect to any Indebtedness for periods while the same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while the same was actually outstanding); and
(c) notwithstanding clause (a) or (b) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of those agreements.
“Consolidated Fixed Charges” for any period means the sum, without duplication, of (a) Consolidated Interest Expense of the Issuer and the Subsidiaries for such period,plus (b) the product of (a) all dividend payments on any series of Disqualified Equity Interests of the Issuer or any Subsidiary or any Preferred Stock of any Subsidiary (other than any such Disqualified Equity Interests or any Preferred Stock held by the Issuer or a Subsidiary or to the extent paid in Qualified Equity Interests) for such period,multiplied by (b) a fraction, the numerator of which is one and the denominator of which is oneminus the then current combined federal, state and local statutory tax rate of the Issuer and the Subsidiaries, expressed as a decimal.
“Consolidated Income Tax Expense” means, with respect to any Person for any period the provision for federal, state, local and foreign income taxes of such Person and its Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP.
“Consolidated Interest Expense” means, with respect to any Person for any period, the interest expense of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP (including amortization of original issue discount and deferred financing costs, non-cash interest payments, the interest component of all payments associated with Capitalized Lease Obligations, capitalized interest, net payments, if any, pursuant to interest rate-related Hedging Obligations and imputed interest with respect to Attributable Indebtedness but excluding write-offs associated with the amendment and restatement or repayment of indebtedness).
“Consolidated Net Income” means, with respect to any Person, for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income, by excluding, without duplication:
(1) all extraordinary gains or losses (net of fees and expenses relating to the transaction giving rise thereto);
(2) the portion of net income of such Person and its Subsidiaries allocable to minority interests in unconsolidated Persons to the extent that cash dividends or distributions have not actually been received by such Person or one of its Subsidiaries;
(3) gains or losses in respect of any sales of capital stock or asset sales outside the ordinary course of business (including in a Sale and Leaseback Transaction) by such Person or one of its Subsidiaries;
(4) any gain or loss realized as a result of the cumulative effect of a change in accounting principles;
(5) any fees, expenses and other costs incurred or paid (and write-offs recorded) in connection with the offering of the Notes and the subsequent exchange offer, the Senior Secured Credit Facility, or other Indebtedness;
(6) nonrecurring or unusual gains or losses;
(7) the net after-tax effects of adjustments in the inventory, property and equipment, goodwill and intangible assets line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof;
(8) any fees and expenses incurred (and write-offs recorded) during such period, or any amortization thereof for such period, in connection with any acquisition, investment, asset sale, issuance or repayment or amendment or restatement of indebtedness, issuance of stock, stock options or other equity-based awards, refinancing transaction or amendment or modification of any debt instrument (including without limitation any such transaction undertaken but not completed);
(9) any gain or loss recorded in connection with the designation of a discontinued operation (exclusive of its operating income or loss);
(10) any non-cash compensation or other non-cash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity-based awards or any amendment, modification, substitution or change of any such stock, stock options or other equity-based awards;
(11) any expenses or charges related to any Equity Offering, Asset Disposition, merger, amalgamation, consolidation, arrangement, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by the Indenture (including a refinancing thereof) (whether or not successful); and
(12) any non-cash impairment, restructuring or special charge or asset write-off or write-down, and the amortization or write-off of intangibles.
“Consolidated Net Tangible Assets” means, in each case, with respect to the Issuer the total amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all liabilities and liability items, except for Indebtedness payable by its terms more than one year from the date of incurrence thereof (or renewable or extendable at the option of the obligor for a period ending more than one year after such date of incurrence), capitalized rent, capital stock (including redeemable preferred stock) and surplus, surplus reserves and deferred income taxes and credits and other non-current liabilities, and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expenses incurred in the issuance of debt, and other like intangibles which, in each case, under generally accepted accountinglaws principles in effect on the date of the Indenture would be included on a consolidated balance sheet of the Issuer and its Subsidiaries.
“Consolidated Non-cash Charges” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses of the Person and its Subsidiaries (including without limitation any minority interest) reducing Consolidated Net Income for such period, determined on a consolidated basis in accordance with GAAP.
“Continuing Director” means, as of any date of determination, any member of the Board of Directors of the relevant Person who:
(1) was a member of such Board of Directors on the Issue Date; or
(2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.
“Credit Facilities” means one or more debt facilities (including, without limitation, the Senior Secured Credit Facility) or commercial paper facilities, in each case with banks or other lenders providing for revolving credit loans, term loans or letters of credit, in each case as any such agreement may be amended or refinanced, including any agreement(s) extending the maturity of or refinancing (including increasing the amount of available borrowings thereunder or adding the Issuer or Subsidiaries of the Issuer as borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement(s) or any successor or replacement bank credit agreement and whether by the same or any other agent, lender or group of lenders or creditor or group of creditors.
“Default” means (1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.
“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by the Issuer or any of the Guarantors in connection with an Asset Disposition that is designated as “Designated Non-cash Consideration” pursuant to an officers’ certificate, setting forth the basis of such valuation, less the amount of cash or cash equivalents received in connection with a subsequent sale, redemption or payment of, on or with respect to such Designated Non-cash Consideration.
“Disqualified Equity Interests” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final maturity date of the Notes;provided,however, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests;provided,further,however, that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer to redeem such Equity
Interests upon the occurrence of a Change of Control occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the change of control provisions applicable to such Equity Interests are no more favorable to such holders than the provisions described under “—Repurchase at the Option of Holders—Change of Control” in this prospectus and such Equity Interests specifically provide that the Issuer will not redeem any such Equity Interests pursuant to such provisions prior to the Issuer’s purchase of the Notes as required pursuant to the provisions described under “—Repurchase at the Option of Holders—Change of Control.”
“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States, any State thereof or the District of Columbia, other than any such Subsidiary that for U.S. federal income tax purposes is treated as a partnership or disregarded as an entity separate from its sole owner and that is a Subsidiary of a Subsidiary of the Issuer that is a “controlled foreign corporation” within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended.
“Equity Interests” of any Person means (1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person, but excluding any debt securities that are convertible into such shares or other interests in such Person.
“Equity Offering” means a public sale for cash of common stock of the Issuer or any direct or indirect parent entity of the Issuer, other than (i) public offerings with respect to common stock of the Issuer or any of its direct or indirect parent entities registered on Form S-4 or Form S-8 or (ii) any sale to any Subsidiary of the Issuer.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect on the Issue Date;provided, for the avoidance of doubt, that any leases that are not or would not be characterized as Capitalized Leases under GAAP as in effect on the Issue Date shall not be reclassified as Capitalized Leases and additional liabilities associated with such leases shall not be classified as Indebtedness as a result of any changes in interpretive releases or literature regarding GAAP or any requirements by the independent auditors of the Issuer.
“Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, through letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. “Guarantee” when used as a verb shall have a corresponding meaning.
“Guarantor” means:
(1) each Domestic Subsidiary that executes and delivers a Note Guarantee pursuant to the covenant described under “—Certain Covenants—Additional Note Guarantees”; and
(2) each Subsidiary that otherwise executes and delivers a Note Guarantee,
in each case, until such time as such Person is released from its Note Guarantee in accordance with the provisions of the Indenture.
“Hedging Obligations” of any Person means the obligations of such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices or availability, either generally or under specific contingencies, and including both physical and financial settlement transactions.
“Holder” means any registered holder, from time to time, of any Notes.
“Indebtedness” of any Person at any date means, without duplication:
(a) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(c) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services;
(e) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person (but excluding any accrued but unpaid dividends);
(f) all Capitalized Lease Obligations of such Person;
(g) all Indebtedness of others secured by a Security Interest on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(h) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of the Issuer or the Subsidiaries that is guaranteed by the Issuer or the Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Issuer and the Subsidiaries on a consolidated basis;
(i) all Attributable Indebtedness; and
(j) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (g), the lesser of (a) the fair market value of any asset subject to a Security Interest securing the Indebtedness of others on the date that the Security Interest attaches and (b) the amount of the Indebtedness secured. For purposes of clause (e), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to the Indenture.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, in each case with stable outlook, or an equivalent rating by any other Rating Agency.
“Issue Date” means May 9, 2013, the date on which Notes were first issued under the Indenture.
“Make-Whole Premium” means, with respect to a Note at any Make-Whole Redemption Date, an amount equal to the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess, if any, of (x) the present value of the sum of the principal amount and premium that would be payable on such Note on May 15, 2018 and all remaining interest payments to and including May 15, 2018 (but excluding any interest accrued to the Make-Whole Redemption Date), discounted on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) from May 15, 2018 to the Make-Whole Redemption Date at a per annum interest rate equal to the Applicable Treasury Rate on such Make-Whole Redemption Date plus 0.50%, over (y) the outstanding principal amount of such Note.
“Make-Whole Redemption Date” with respect to a Make-Whole Redemption, means the date such Make Whole Redemption is effectuated.
“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.
“Net Available Cash” from an Asset Disposition means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other noncash form), in each case net of:
(1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees (including financial and other advisory fees) and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to non-controlling interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and
(4) appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Disposition and retained by the Issuer or any Subsidiary after such Asset Disposition.
“Opinion of Counsel” means a written opinion from legal counsel, who may be an employee of or counsel to the Issuer or any of its Subsidiaries, or other counsel who is reasonably acceptable to the Trustee.
“Pari Passu Indebtedness” means any Indebtedness of the Issuer or any Guarantor that ranks pari passu in right of payment with the Notes or the Note Guarantees, as applicable.
“Person” means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.
“Preferred Stock” means, with respect to any Person, any and all preferred or preference stock or other equity interests (however designated) of such Person having a preference or priority over other Equity Interests (however designated) of such Person, whether now outstanding or issued after the Issue Date.
“Principal Facility” means any land, building, machinery or equipment, or leasehold interests and improvements in respect of the foregoing, owned, on the date of the Indenture or thereafter, by the Issuer or a Subsidiary, which has a gross book value (without deduction for any depreciation reserves) at the date as of which the determination is being made of in excess of one percent of the Consolidated Net Tangible Assets, other than any such land, building, machinery or equipment, or leasehold interests and improvements in respect of the foregoing which, in the opinion of the Board of Directors of the Issuer (evidenced by a board resolution), is not of material importance to the business conducted by the Issuer and its Subsidiaries taken as a whole.
“Qualified Equity Interests” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Issuer.
“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Issuer or any of its Subsidiaries) or
(2) any other Person (in the case of a transfer by a Receivables Entity),
or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and all Guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable;provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms in all material respects at the time of such transaction (as determined in good faith by the Issuer). The grant of a Security Interest in any Accounts Receivable of the Issuer or any of its Subsidiaries to secure Indebtedness under Credit Facilities shall not be deemed a Qualified Receivables Transaction.
“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody’s or S&P or both, as the case may be.
“Receivables Entity” means (a) a Wholly Owned Subsidiary of the Issuer that is designated by the Board of Directors of the Issuer (as provided below) as a Receivables Entity or (b) another Person engaging in a Qualified Receivables Transaction with the Issuer, which Person engages in the business of the financing of accounts receivable, and in the case of either clause (a) or (b):
(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such entity:
(A) is Guaranteed by the Issuer or any Subsidiary of the Issuer (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(B) is recourse to or obligates the Issuer or any Subsidiary of the Issuer in any way (other than pursuant to Standard Securitization Undertakings), or
(C) subjects any property or asset of the Issuer or any Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than pursuant to Standard Securitization Undertakings);
(2) the entity is not an Affiliate of the Issuer or is an entity with which neither the Issuer nor any Subsidiary of the Issuer has any material contract, agreement, arrangement or understanding other than on terms that the Issuer reasonably believes to be no less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and
(3) is an entity to which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing conditions.
“Registration Rights Agreement” means the registration rights agreement among the Issuer, the Guarantors and the initial purchasers relating to the original notes.
“Restricted Payment” means any of the following:
(a) the declaration or payment of any dividend or any other distribution on Equity Interests of the Issuer or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Issuer, including, without limitation, any payment in connection with any merger or consolidation involving the Issuer but excluding dividends or distributions payable solely in Qualified Equity Interests of the Issuer or through accretion or accumulation of such dividends on such Equity Interests; or
(b) the redemption of any Equity Interests of the Issuer, including, without limitation, any payment in connection with any merger or consolidation involving the Issuer.
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.
“Sale and Leaseback Transaction” means any sale or transfer made by the Issuer or one or more Subsidiaries (except a sale or transfer made to the Issuer or one or more Subsidiaries) of any Principal Facility that (in the case of a Principal Facility which is a building or equipment) has been in operation, use or commercial production (exclusive of test and start-up periods) by the Issuer or any Subsidiary for more than 180 days prior to such sale or transfer, or that (in the case of a Principal Facility that is a parcel of real property not containing a building) has been owned by the Issuer or any Subsidiary for more than 180 days prior to such sale or transfer, if such sale or transfer is made with the intention of leasing, or as part of an arrangement involving the lease of such Principal Facility to the Issuer or a Subsidiary (except a lease for a period not exceeding 36 months made with the intention that the use of the leased Principal Facility by the Issuer or such Subsidiary will be discontinued on or before the expiration of such period). The creation of any Secured Debt permitted under the applicable section of the Indenture will not be deemed to create or be considered a Sale and Leaseback Transaction.
“Secured Debt” means outstanding Indebtedness of the Issuer or a Subsidiary which is secured by (a) a Security Interest in any property or assets of the Issuer or any Subsidiary, or (b) a Security Interest in any shares of stock owned directly or indirectly by the Issuer in a Subsidiary. The securing in the foregoing manner of any previously unsecured debt shall be deemed to be the creation of Secured Debt at the time such security is given. The amount of Secured Debt at any time outstanding shall be the aggregate principal amount then owing thereon by the Issuer and the Subsidiaries.
“Securities Act” means the Securities Act of 1933, as amended.
“Security Interest” means any mortgage, pledge, lien, encumbrance or other security interest which secures payment or performance of an obligation.
“Senior Secured Credit Facility” means the Second Amended and Restated Credit Agreement, dated as of March 25, 2011, as amended and restated as of September 30, 2011 and May 3, 2013 and as further amended and restated on or prior to the Issue Date, as such agreement may be amended or refinanced, including any agreement(s) extending the maturity of or refinancing (including increasing the amount of available borrowings thereunder or adding Subsidiaries of the Issuer as borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement(s) or any successor or replacement bank credit agreement(s) and whether by the same or any other agent, lender or group of lenders or creditor or group of creditors.
“Senior Secured Net Leverage Ratio” means, as of the date of determination, the ratio of (a) the Total Net Debt of the Issuer and the Subsidiaries secured by a Security Interest to (b) Consolidated Cash Flow Available for Fixed Charges of the Issuer and the Subsidiaries for the most recently ended four fiscal quarter period ending immediately prior to such date for which financial statements are available. In the event that the Issuer or any Subsidiary incurs, redeems, retires, defeases or extinguishes any Total Net Debt (other than Indebtedness under a revolving credit facility unless such Indebtedness has been permanently paid and not replaced) subsequent to the commencement of the period for which the Senior Secured Net Leverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Senior Secured Net Leverage Ratio is made, then the Senior Secured Net Leverage Ratio shall be calculated giving pro forma effect to such incurrence, redemption, retirement, defeasance or extinguishment of Total Net Debt as if the same had occurred at the beginning of the applicable four-quarter period. Notwithstanding anything to the contrary set forth in the definition of Consolidated Cash Flow Available for Fixed Charges (and all component definitions referenced in such definitions), whenever pro forma effect is to be given to an Asset Acquisition, Asset Disposition or incurrence, redemption, retirement, defeasance or extinguishment of Total Net Debt, the pro forma calculations shall be determined in good faith by a responsible officer of the Issuer.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.
“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Issuer or any Subsidiary of the Issuer that, taken as a whole, are customary in an accounts receivable transaction.
“Subordinated Indebtedness” means Indebtedness of the Issuer or any Subsidiary that is expressly subordinated in right of payment to the Notes or the guarantees of the Notes by the Issuer or such Subsidiary, as the case may be.
“Subsidiary“ means a corporation, association, partnership, limited liability company or other entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by the Issuer or by one or more other Subsidiaries, or by the Issuer and one or more other Subsidiaries.
“Total Net Debt” means, at any date of determination, (1) the aggregate amount of all outstanding Indebtedness of the Issuer and the Subsidiaries determined on a consolidated basis in accordance with GAAP less (2) up to $200.0 million of cash and cash equivalents of the Issuer and its Subsidiaries determined on a consolidated basis in accordance with GAAP after deducting encumbered cash (other than cash subject to bankers’ liens, rights of set-off and other similar rights), restricted cash and cash equivalents that the Issuer is unable to access within thirty (30) days and net of tax obligations for repatriation. Notwithstanding the foregoing, for purposes of the covenant set forth above under “—Certain Covenants—Limitation on Liens,” a binding commitment to lend under a revolving credit facility shall be deemed to be an incurrence of Indebtedness in the full amount of such commitment on the date that such commitment is entered into, regardless of whether the full amount of such revolving credit facility is actually borrowed, and thereafter the amount of such commitment shall be deemed fully borrowed at all times.
“Total Net Leverage Ratio” means, as of the date of determination, the ratio of (a) the Total Net Debt of the Issuer and the Subsidiaries to (b) Consolidated Cash Flow Available for Fixed Charges of the Issuer and the Subsidiaries for the most recently ended four fiscal quarter period ending immediately prior to such date for which financial statements are available. In the event that the Issuer or any Subsidiary incurs, redeems, retires, defeases or extinguishes any Total Net Debt (other than Indebtedness under a revolving credit facility unless such Indebtedness has been permanently paid and not replaced) subsequent to the commencement of the period for which the Total Net Leverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Total Net Leverage Ratio is made, then the Total Net Leverage Ratio shall be calculated giving pro forma effect to such incurrence, redemption, retirement, defeasance or extinguishment of Total Net Debt as if the same had occurred at the beginning of the applicable four-quarter period. Notwithstanding anything to the contrary set forth in the definition of Consolidated Cash Flow Available for Fixed Charges (and all component definitions referenced in such definitions), whenever pro forma effect is to be given to an Asset Acquisition, Asset Disposition or incurrence, redemption, retirement, defeasance or extinguishment of Total Net Debt, the pro forma calculations shall be determined in good faith by a responsible officer of the Issuer.
“Transfer” means to sell, assign, transfer, lease (other than pursuant to an operating lease entered into in the ordinary course of business), convey or otherwise dispose of, including by Sale and Leaseback Transaction, consolidation, merger, liquidation, dissolution or otherwise, in one transaction or a series of transactions.
“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.
“Voting Stock” means any class or classes of Capital Stock pursuant to which the holders thereof have power to vote in the election of directors, managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.
BOOK ENTRY,
BOOK-ENTRY, DELIVERY AND FORM
The Global Notes
We will issue the exchange notes in the form of one or more global notes in registered form without interest coupons attached (the “Global Notes”). The Global Notes 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 in DTC as described below.
The Global Notes
We expect that, pursuant to procedures established by DTC, (i) upon the Upon issuance, of the Global Notes representing the exchange notes will be deposited with the trustee as custodian for DTC or its custodian will credit, on its internal system,and registered in the principal amountname of Cede & Co., as nominee of DTC.
Book-Entry Procedures for the individual beneficial interests represented by such Global Notes to the respective accounts of persons who have accounts with such depositary (“participants”) and (ii) ownership of beneficial
All interests in the Global Notes will be shown on,subject to the operations and procedures of DTC. The Company provides the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of each settlement system are controlled by that settlement system and may be changed at any time.
Neither the Company, the trustee, nor the initial purchasers take any responsibility for those operations or procedures, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants)Company and the recordsinitial purchasers urge investors to contact the system or their participants directly to discuss these matters.
DTC has established procedures to facilitate transfers of
participants (with respect to interests of persons other than participants). Ownership of beneficial interests in the Global Notes
will be limitedamong DTC participants. However, DTC is not obligated to
participantsperform these procedures and may discontinue or
persons who hold interests through participants. Holders may hold their interests inchange these procedures at any time. Neither the
Global Notes directly through DTC if they are participants in such system, or indirectly through organizations which are participants in such system.So long as DTC or its nominee isCompany nor the registered owner or holder of the exchange notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the exchange notes represented by such Global Notes for all purposes under the indenture that governs the exchange notes. No beneficial owner of an interest in the Global Notes will be able to transfer that interest except in accordance with DTC’s procedures, in addition to those provided for under the indenture with respect to the exchange notes.
Payments of the principal of, premium (if any) and interest (including additional interest, if any) on, the Global Notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither we, the trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.
We expect thatperformance by DTC or its nominee, upon receiptparticipants or indirect participants of any payment of principal of, and premium (if any) and interest (including additional interest, if any) ontheir obligations under the Global Notes, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers, registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way through DTC’s same-day funds system in accordance with DTC rules and will be settled in same-day funds. If a holder requires physical delivery of a certificate in registered form for any reason, including to sell exchange notes to persons in states that require physical delivery of the exchange notes, or to pledge such securities, such holder must transfer its interest in a procedures governing their operations.
Global
Note, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture.Notes
DTC has advised
usthe Company that it
will take any action permitted to be taken by a holder of exchange notes (including the presentation of exchange notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of exchange notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the indenture, DTC may exchange the applicable Global Notes for certificates in registered form, which it will distribute to its participants.DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York; a “banking organization” within the meaning of the New York Banking Law; a member of the Federal Reserve System,System; a “clearing corporation” within the meaning of the New York Uniform Commercial CodeCode; and a “Clearing Agency”“clearing agency” registered pursuant to the provisions ofunder Section 17A of the Securities Exchange Act.Act of 1934, as amended (the “Exchange Act”). DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes into the accounts of its participants, thereby eliminating the need for physical movement of certificates. Participantsparticipants. Persons who have accounts with DTC (“DTC participants”) include securities brokers and dealers, including the initial purchasers of the original notes; banks and trust companies andcompanies; clearing corporations and certain other organizations. Indirect access to the DTCDTC’s system is also available to others such as banks, brokers, dealers and trust companies thatcompanies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.
Although Investors who are not DTC has agreedparticipants may beneficially own securities held by or on behalf of DTC only through DTC participants or indirect participants in DTC.
So long as DTC’s nominee is the registered owner of a Global Note, that nominee will be considered the sole owner or holder of the exchange notes represented by that Global Note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have exchange notes represented by the Global Note registered in their names; will not receive or be entitled to receive physical, certificated exchange notes; and will not be considered the owners or holders of exchange notes under the indenture for any purpose, including with respect to the foregoinggiving of any direction, instruction or approval to the trustee under such indenture. As a result, each investor who owns a beneficial interest in a Global Note must rely on the procedures of DTC to exercise any rights of a holder of notes under the indenture (and, if the investor is not a participant or an indirect participant in orderDTC, on the procedures of the DTC participant through which the investor owns its interest).
Ownership of beneficial interests in each Global Note will be limited to facilitate transfersDTC participants or persons who hold interests through DTC participants. We expect that under procedures established by DTC: upon deposit of each Global Note with DTC’s custodian, DTC will credit portions of the principal amount of the Global Note to the accounts of the DTC participants designated by the initial purchasers; and ownership of beneficial interests in each Global Note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note).
Payments of principal, premium (if any) and interest with respect to the exchange notes represented by a Global Notes among participantsNote will be made by the paying agent to DTC’s nominee as the registered holder of DTC they are under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither we northe Global Note. None of us, the trustee or the paying agent will have any responsibility or liability for the performancepayment of amounts to owners of
beneficial interests in a Global Note, for any aspect of the records relating to or payments made on account of those interests by DTC, or itsfor maintaining, supervising or reviewing any records of DTC relating to those interests.
Payments by participants and indirect participants in DTC to the owners of beneficial interests in a Global Note will be governed by standing instructions and customary industry practice and will be the responsibility of those participants or indirect participants
and DTC. Transfers between participants in DTC will be effected under DTC procedures and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream will be effected in the ordinary way under the rules and operating procedures of
its obligationsthose systems. Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected within DTC through the DTC participants that are acting as depositaries for Euroclear and Clearstream. To deliver or receive an interest in a Global Note held in a Euroclear or Clearstream account, an investor must send transfer instructions to Euroclear or Clearstream, as the case may be, under the rules and procedures
governing their operations.Certificates in Registered Form
Certificates in registered form shallof that system and within the established deadlines of that system. If the transaction meets its settlement requirements, Euroclear or Clearstream, as the case may be, issued in exchange for beneficialwill send instructions to its DTC depositary to take action to effect final settlement by delivering or receiving interests in the relevant Global Notes ifin DTC, isand making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. Euroclear and Clearstream participants may not deliver instructions directly to the DTC depositaries that are acting for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant that purchases an interest in a Global Note from a DTC participant will be credited on the business day for Euroclear or Clearstream immediately following the DTC settlement date. Cash received in Euroclear or Clearstream from the sale of an interest in a Global Note to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account as of the business day for Euroclear or Clearstream following the DTC settlement date.
Certificated Notes
Exchange notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related notes only if: (1) DTC notifies us at any time
that it is unwilling or unable to continue as
a depositary for the Global Notes and a successor depositary is not
appointed by us within 90 days.appointed; (2) DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed; or (3) certain other events provided in the indenture should occur.
CERTAIN
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, PROSPECTIVE HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL INCOME TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS OF NOTES FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON SUCH HOLDERS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”); (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE HOLDERS OF NOTES SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
The following discussion is a summary of material U.S. federal income tax considerations relevant to the exchange of original notes for exchange notes, but does not purport to be a complete analysis of all potential tax effects. The discussion is based upon the Code, Treasury Regulations, Internal Revenue Service (the “IRS”) rulings and pronouncements and judicial decisions now in effect, all of which may be subject to change at any time by legislative, judicial or administrative action. These changes may be applied retroactively in a manner that could adversely affect a holder of exchange notes. We cannot assure you that the IRS will not challenge one or more of the tax considerations described in this discussion, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S. federal tax consequences described herein. Some holders, including financial institutions, insurance companies, regulated investment companies, tax-exempt organizations, dealers in securities or currencies, U.S. persons whose functional currency is not the U.S. dollar, or persons who hold the notes as part of a hedge, conversion transaction, straddle or other risk reduction transaction may be subject to special rules not discussed below.
The exchange of original notes for exchange notes in the exchange offer will not constitute a taxable event to holders. Consequently,
| | | | | | | | | | | |
| • | | no gain or loss will be recognized by a holder upon receipt of a holder upon receipt of an exchange note; |
| | | | | | | | | | | |
| • | | the holding period of the exchange note will include the holding period of the original note; and |
| | | | | | | | | | | |
| • | | the adjusted tax basis of the exchange note will be the same as the adjusted tax basis of the original note immediately before the exchange. |
Investors considering the exchange of original notes for exchange notes are urged to consult their own tax advisors regarding the application of the U.S. federal income tax consequences in light of their particular situations, as well as any consequences arising under laws of any other taxing jurisdiction.
THE PRECEDING DISCUSSION OF CERTAIN
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. WE URGE EACH PROSPECTIVE INVESTOR TO CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR NOTES, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
CERTAIN
ERISABENEFIT PLAN INVESTOR CONSIDERATIONS
The following is a summary of certain considerations associated with the
purchase and holdingacquisition of the exchange notes
(including any interest in an exchange note) by employee benefit plans that are subject to Title I of the
United StatesU.S. Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), plans, individual retirement accounts, and other arrangements that are subject to Section 4975 of the
Code or provisions under any other federal, state, local, non-U.S. or other laws, rules or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”).General Fiduciary Matters
ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.
In considering an investment in the exchange notes of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.
Prohibited Transaction Issues
Code.
Section 406 of ERISA and Section 4975 of the Code prohibitimpose certain fiduciary and prohibited transaction restrictions on: (a) employee benefit plans subject to Title I of ERISA (“ERISA Plans”), (b) plans that are not subject to ERISA but which are subject to Section 4975 of the Code, such as individual retirement accounts and Keogh plans (together with ERISA Plans, from engaging in specified“Plans”), and (c) entities that are deemed to hold “plan assets” under Department of Labor (“DOL”) Regulation 2510.3-101, as amended by Section 3(42) of ERISA (the “Plan Asset Regulation”) (collectively, “Plan Investors”). The ERISA and Code-based prohibited transaction rules limit certain transactions involving plan assets withbetween Plan Investors and persons or entities who are “parties in interest,” within the meaning ofinterest” under ERISA or “disqualified persons,” withinpersons” under the meaningCode (collectively, “Parties in Interest”) with respect to the Plan. In addition, certain governmental, church and non-U.S. plans (collectively, “Non-ERISA Arrangements”) are not subject to ERISA or Section 4975 of the Code, but may be subject to other laws which impose restrictions on their investment (each, a “Similar Law”).
As a result of our business, we may be a Party in Interest with respect to certain Plan Investors. Where we are a Party in Interest with respect to a Plan Investor (either directly or by reason of our ownership of our subsidiaries), the acquisition and holding of the exchange notes by or on behalf of a Plan Investor may be a prohibited transaction under Section 406 of ERISA and Section 4975 of the Code, unless exemptive relief were available under an exemption is available.applicable prohibited transaction exemption. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may have to be rescinded, and parties that engage in such a transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition,
Accordingly, the
fiduciary ofexchange notes (or any interest therein) may not be acquired or held by any Plan Investor unless such purchaser or holder is eligible for the
ERISA Plan that engages in such a non-exemptexemptive relief available under one or more Prohibited Transaction Class Exemptions (“PTCE”), including PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, issued by the DOL, or the statutory prohibited transaction
may be subject to penalties and liabilitiesexemption under
ERISA and the Code. The acquisition and/or holding of exchange notes by an ERISA Plan with respect to which the issuer, the initial purchasers or the guarantors are considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption.In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions (“PTCEs”) that may apply to the acquisition and holding of the exchange notes. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts, and PTCE 96-23 respecting transactions determined by in-house asset managers. In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide relief from theor another applicable prohibited transaction provisions of ERISA and Section 4975 of the Code for certain transactions, provided that neither the issuer of the securities nor any of its affiliates (directlyexemption or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction, and provided further that the ERISA Plan pays no more than adequate consideration in connection with the transaction. exception.
There can be no assurance that
allany of these class or statutory exemptions will apply and even if the conditions specified in one or more of these exemptions are met, the scope of the
conditions of any suchrelief provided by these exemptions
willmay not cover all acts which might be
satisfied.Becauseconstrued as a prohibited transaction. Any purchaser or holder of the foregoing, the original notes should not be exchanged for exchange notes byor any person investing “plan assets” of any Plan, unless such exchange will not constitute a non-exempt prohibited transaction under ERISA and the Code or similar violation of any applicable Similar Laws.
Representation
Accordingly, by acceptance of an exchange note, each purchaser and subsequent transfereeinterest therein will be deemed to have represented by its acquisition and warrantedholding thereof that either (a)(i) no portion ofit is not (and for so long as it holds the assets used by such purchasernotes or transferee to acquire or holdinterest therein will not be) acquiring the exchange notes constitutes assets(or any interest therein) on behalf of or with “plan assets” of any Plan or any Non-ERISA Arrangements or (ii) the exchange of the original notes for the exchange notes or theits acquisition and holding of the exchange notes by such purchaser or transfereeany interest therein will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or in a similar violation under any applicable Similar Laws.
The foregoing discussionLaw, and (b) it will not sell or otherwise transfer the notes or any interest therein otherwise than to a purchaser or transferee that is generaldeemed to make these same representations and agreements with respect to its acquisition and holding of the exchange notes. Further, the fiduciaries of any Plan Investor considering an investment in naturethe notes should determine whether the acquisition and holding of the notes is prudent, and consistent with the Plan’s governing documents and investment policies and objectives, and otherwise complies with any ERISA, Code, or Similar Law.
In addition to the above, the Plan Asset Regulation generally provides that, where a Plan acquires an equity interest in an entity, and the equity interest is neither a “publicly offered security” nor a security issued by an investment company registered under the United States Investment Company Act of 1940, then the assets of such Plan will include not only such equity interest, but also an undivided interest in each of the underlying assets of such entity. However, pursuant to the Plan Asset Regulation, such “look-through” treatment generally does not apply to any entity if (i) it constitutes an “operating company” as defined in the Plan Asset Regulation, or (ii) the ownership in such entity of Plan Investors is not intended“significant” (generally defined as less than 25% ownership of all classes of ownership). An “equity interest” for purposes of the Plan Asset Regulation does not include any instrument that is treated as indebtedness under applicable local law.
We expect that the exchange notes should constitute indebtedness under the Plan Asset Regulation. However, guidance from the DOL is minimal and there can be no assurance as to be all-inclusive. the characterization of the exchange notes.
Due to the complexity of thesethe applicable rules, and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the exchange notes (and holding the exchange notes) on behalf of or with the assets of, anya Plan Investor consult with their counsel regarding
the potential applicability ofconsequences under ERISA Section 4975 ofand the Code and any Similar Laws to such transactions and whether an exemption would be applicable to the purchase and holding of the exchange notes (and exchange of the exchange notes).Purchasers of the exchange notes have the exclusive responsibility for ensuring that their purchase and holding of the exchange notes complies with the fiduciary responsibility rules of ERISA and does not violate the prohibited transaction rules of ERISA, the Code or Similar Laws.
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange offer in exchange for the original notes may be offered for resale, resold or otherwise transferred by holders thereof, other than any holder which is (A) an “affiliate” of our company within the meaning of Rule 405 under the Securities Act, (B) a broker-dealer who acquired notes directly from our company or (C) broker-dealers who acquired notes as a result of market-making or other trading activities, without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such exchange notes are acquired in the ordinary course of such holders’ business, and such holders are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such exchange notes. However, broker-dealers receiving the exchange notesinvestment in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of such exchange notes. To date, the staff of the SEC has taken the position that these broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as the exchange pursuant to the exchange offer, other than a resale of an unsold allotment from the sale of the original notes to the initial purchasers thereof, with the prospectus contained in the exchange offer registration statement. Pursuant to the registration rights agreement, we have agreed to permit these broker-dealers to use this prospectus in connection with the resale of such exchange notes. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, and any amendment or supplement to this prospectus, available to, and promptly send additional copies of this prospectus, and any amendment or supplement to this prospectus, to, any broker-dealer that requests such documents in the letter of transmittal for use in connection with any such resale.
Each holder of the original notes who wishes to exchange its original notes for exchange notes in the exchange offer will be required to make certain representations to us as set forth in “The Exchange Offer.”
.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant toin the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of
such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where
such original notes were acquired as a result of market-making activities or other trading activities.
We have agreed that for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any participating broker-dealer for use in connection with any resale of new notes received by it in exchange for original notes.
We will not receive any proceeds from any sale of exchange notes by broker-dealers.
Exchange notes received by broker-dealers for their own account pursuant toin the exchange offer may be sold from time to time in one or more transactionstransactions:
• in the over-the-counter market,market;
• in negotiated transactions,transactions;
• through the writing of options on the exchange notesnew notes; or
• a combination of suchthose methods of resale at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. prices;
Any such resale may be made:
• directly to purchaserspurchasers; or
• to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. notes;
Any broker-dealer that resells
exchangenew notes that were received by it for its own account
inpursuant to the exchange offer and any broker or dealer that participates in a distribution of
suchthose exchange notes may be
deemedconsidered to be an “underwriter” within the meaning of the Securities
Act, and anyAct. Any profit on any
such resale of
those exchange notes and any
commissionscommission or concessions received by any such persons may be
deemedconsidered to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be
deemedconsidered to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any participating broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay
theall expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the exchange notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities
Act, as set forth in the registration rights agreement.Act.
Certain legal matters with respect to the legality of the exchange notes offered hereby and the guarantees thereof will be passed upon for us by
Victor M. Casini, Esq., our Senior Vice President, General Counsel, and Corporate Secretary.Sheppard, Mullin, Richter & Hampton LLP, Chicago, Illinois. Certain legal matters relating to Pennsylvania law will be passed upon for us by Cozen O'Connor, Philadelphia, Pennsylvania. Certain legal matters relating to Oregon law will be passed upon for us by Stoel Rives LLP, Portland, Oregon.
The
consolidated financial statements
and the related financial statement schedule, incorporated in this
Prospectusprospectus by reference
fromto the Company’s Annual Report on Form 10-K for the year ended December 31,
2013,2022, and the effectiveness of the Company’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their
reports, whichreports. Such financial statements are incorporated
herein by
reference. Such consolidated financial statements and financial statement schedule have been so incorporatedreference in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy any materialsIn this prospectus, we “incorporate by reference” some of the information that we file with the SEC, at its Public Reference Room at 100 F Street, N.E.which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus. We incorporate by reference into this prospectus the documents listed below:
• Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 23, 2023;
• Those portions of our Definitive Proxy Statement on Schedule 14A filed on March 20, 2023 that are incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022;
• Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, filed on April 27, 2023 and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, filed on July 27, 2023; and
• Current Reports on Form 8-K filed on January 6, 2023, Washington, DC 20549.February 28, 2023, March 9, 2023, March 28, 2023, May 11, 2023 (including Amendment No. 1 thereto filed on August 22, 2023), May 16, 2023, May 26, 2023 and August 1, 2023 (except for any portions of such Current Reports on Form 8-K furnished pursuant to Item 2.02 and/or Item 7.01 thereof and any corresponding exhibits thereto not filed with the SEC).
Any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You can obtain information about the operationany of the SEC’s Public Reference Roomdocuments incorporated by callingreference into this prospectus from the SEC at 1-800-SEC-0330. The SEC also maintains a website that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov. Unless explicitly listed under the heading “Incorporation by Reference” herein, the information onthrough the SEC’s website (www.sec.gov). Unless otherwise expressly indicated, information obtained on or accessible through the SEC’s website or any other website referred to in this prospectus or in any document incorporated by reference herein shall not be deemed to be incorporated by reference herein.
We will provide, upon request, to each person to whom this prospectus is
notdelivered a copy of the documents that we have incorporated by reference into this prospectus.
We have agreed that, if we are not subject to the informational requirements of Section 13 or 15(d) of the Exchange Act at any time while the original notes constitute “restricted securities” within the meaning of the Securities Act, we will furnish to holders and beneficial owners of the original notes and to prospective purchasers designated by such holders the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit compliance with Rule 144A in connection with resales of the original notes. You may request a copy of
our SECthese filings at no cost by writing or telephoning us
at the following address:at:
500 West Madison Street, Suite 2800
(312) 621-1950
Offers to Exchange
up to$600,000,000
4.75% Seniorthe Registered Notes due 2023
which have been registered underSet Forth Below that
Have Been Registered Under the Securities Act of 1933,
as
amended, for anyAny and All Outstanding
Restricted Notes set Forth Opposite the Corresponding
Registered Notes
| | | | | | | | |
| | |
| Registered/Exchange Notes | | Restricted/Original Notes |
| $800,000,000 5.750% Notes due 2028 | | $800,000,000 5.750% Notes due 2028 |
| $600,000,000 6.250% Notes due 2033 | | $600,000,000 6.250% Notes due 2033 |
PROSPECTUS
Until , 2023 all
outstanding unregistered4.75% Senior Notes due dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers
LKQ Corporation—Delaware General Corporate Law
The purchase agreement under which the original notes were originally issued and sold provide for indemnification of directors and officers of each registrant against certain liabilities by the initial purchasers of such original notes. In addition, the registration rights agreement filed as Exhibit 4.2 to this Registration Statement provides for indemnification of directors and officers of each registrant against certain liabilities by holders of the old notes.
LKQ Corporation (the “Corporate Registrant”) is organized as a corporation under Delaware law and is subject to the provisions of the General Corporation Law of the State of Delaware (the “DGCL”). The following description is intended only as a summary and is qualified in its entirety by reference to the
Restated Certificate of Incorporation
(“Certificate of Incorporation”) of the Corporate Registrant, the
bylawsAmended and Restated Bylaws (“Bylaws”) of the Corporate Registrant and the DGCL.
The Corporate Registrant is organized under the DGCL, which empowers Delaware corporations to indemnify any director or officer, or former director or officer, who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement, actually and reasonably incurred in connection with such action, suit, or proceeding, provided that such director or officer acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, provided further that such director or officer had no reasonable cause to believe his conduct was unlawful.
The DGCL also empowers Delaware corporations to provide similar indemnity to any director or officer, or former director or officer, for expenses, including attorneys’ fees, actually and reasonably incurred by the person in connection with the defense or settlement of actions or suits by or in the right of the corporation if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the interests of the corporation, except in respect of any claim, issue, or matter as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all of the circumstances of the case, such director or officer is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or such other court shall deem proper.
The DGCL further provides that (i) to the extent a present or former director or officer of a corporation has been successful in the defense of any action, suit, or proceeding described above or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, and (ii) indemnification and advancement of expenses provided by, or granted pursuant to, the DGCL shall not be deemed exclusive of any other rights to which the indemnified party may be entitled.
The DGCL permits a Delaware corporation to purchase and maintain, on behalf of any director or officer, insurance against liabilities incurred in such capacities. The DGCL also permits a corporation to pay expenses incurred by a director or officer in advance of the final disposition of an action, suit, or proceeding, upon receipt of an undertaking by the director or officer to repay such amount if it is determined that such person is not entitled to indemnification.
As permitted by the DGCL, the Corporate Registrant’s certificateCertificate of incorporationIncorporation eliminates the personal liability of a director to the corporation or its stockholders for monetary damages for violations of the director’s fiduciary duty except, to the extent provided by applicable law, (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or (iv) for any transaction from which a director derived an improper personal benefit. In addition, the Corporate Registrant’s certificateCertificate of incorporationIncorporation provides that it is required to indemnify its directors and officers to the fullest extent permitted by the DGCL for any expenses, liabilities or other matters, that such indemnification is not exclusive of any other right to indemnification that such person may be entitled to otherwise, and that the right to such indemnification is available for current and former directors and officers, and inures to the benefit of their heirs, executors, and administrators. The Corporate
Registrant’s
bylawsBylaws also contain provisions for indemnification of its directors and officers consistent with the provisions of the DGCL.
II-1
The Corporate Registrant has also entered into an indemnification agreement with each of its directors and officers which provides for certain rights to indemnification and payment of expenses in addition to and in furtherance of the indemnification provisions in
our certificateits Certificate of
incorporation.Incorporation.
The Corporate Registrant has obtained insurance policies indemnifying its directors and officers against certain civil liabilities and related expenses.
Many of LKQ’s subsidiary guarantors are incorporated or formed in other jurisdictions that have laws governing the indemnification of directors and officers that are substantially similar to the DGCL. In addition, the constituent documents of some of the subsidiary guarantors include similar provisions to those described above.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits. The
following exhibits
toare filed as part of this
registration statement are listed on the Exhibit Index to this registration statement, which Exhibit Index is hereby incorporated by reference.Registration Statement:
| | | | | | | | | | | |
| | | |
| Exhibit No. | | Description of Exhibits |
| | |
| | Arrangement Agreement, dated as of February 26, 2023, by and among LKQ Corporation, Uni-Select Inc. and 9485-4692 Québec Inc. (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on February 28, 2023) |
| | Restated Certificate of Incorporation of LKQ Corporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on October 31, 2014). |
| | Amended and Restated Bylaws of LKQ Corporation, as amended as of May 7, 2019 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on May 8, 2019). |
| | Articles of Incorporation of A&A Auto Parts Stores, Inc. |
| | Bylaws of A&A Auto Parts Stores, Inc. |
| | Articles of Incorporation of American Recycling International, Inc. |
| | Amended and Restated Bylaws of American Recycling International, Inc. |
| | Certificate of Formation of Assured Quality Testing Services, LLC |
| | Limited Liability Company Agreement of Assured Quality Testing Services, LLC |
| | Certificate of Formation of Automotive Calibration & Technology Services, LLC |
| | Amended and Restated Limited Liability Company Agreement of Automotive Calibration & Technology Services, LLC |
| | Certificate of Incorporation of DriverFx.com, Inc. |
| | Second Amended and Restated Bylaws of DriverFx.com, Inc. |
| | Certificate of Formation of Global Powertrain Systems, LLC |
| | Amended and Restated Limited Liability Company Agreement of Global Powertrain Systems, LLC |
| | Articles of Organization of KAIR IL, LLC |
| | Amended and Restated Limited Liability Company Agreement of KAIR IL, LLC |
| | Articles of Incorporation of KAO Logistics, Inc. |
| | By-laws of KAO Logistics, Inc. |
| | Certificate of Incorporation of KAO Warehouse, Inc. |
| | Amended and Restated Bylaws of KAO Warehouse, Inc. |
| | Restated Articles of Incorporation of Keystone Automotive Industries, Inc. |
| | Amended and Restated Bylaws of Keystone Automotive Industries, Inc. |
| | Articles of Incorporation of Keystone Automotive Operations, Inc. |
| | | | | | | | | | | |
| | Bylaws of Keystone Automotive Operations, Inc. |
| | Certificate of Incorporation of Keystone Automotive Operations of Canada, Inc. |
| | Amended and Restated Bylaws of Keystone Automotive Operations of Canada, Inc. |
| | Certificate of Formation of KPGW Canadian Holdco, LLC |
| | Third Amended and Restated Limited Liability Company Agreement of KPGW Canadian Holdco, LLC |
| | Articles of Incorporation of LKQ Auto Parts of Central California, Inc. |
| | Amended and Restated Bylaws of LKQ Auto Parts of Central California, Inc. |
| | Certificate of Incorporation of LKQ Best Automotive Corp. |
| | Amended and Restated Bylaws of LKQ Best Automotive Corp. |
| | Certificate of Incorporation of LKQ Central, Inc. |
| | Amended and Restated Bylaws of LKQ Central, Inc. |
| | Articles of Incorporation of LKQ Foster Auto Parts, Inc. |
| | Bylaws of LKQ Foster Auto Parts, Inc. |
| | Certificate of Incorporation of LKQ Investments, Inc. |
| | Amended and Restated Bylaws of LKQ Investments, Inc. |
| | Articles of Incorporation of LKQ Lakenor Auto & Truck Salvage, Inc. |
| | Amended and Restated Bylaws of LKQ Lakenor Auto & Truck Salvage, Inc. |
| | Certificate of Incorporation of LKQ Midwest, Inc. |
| | Amended and Restated Bylaws of LKQ Midwest, Inc. |
| | Certificate of Incorporation of LKQ Northeast, Inc. |
| | Amended and Restated Bylaws of LKQ Northeast, Inc. |
| | Certificate of Formation of LKQ Pick Your Part Central, LLC |
| | Amended and Restated Limited Liability Company Agreement of LKQ Pick Your Part Central, LLC |
| | Certificate of Formation of LKQ Pick Your Part Midwest, LLC |
| | Second Amended and Restated Limited Liability Company Agreement of LKQ Pick Your Part Midwest, LLC |
| | Certificate of Formation of LKQ Pick Your Part Southeast, LLC |
| | Amended and Restated Limited Liability Company Agreement of LKQ Pick Your Part Southeast, LLC |
| | Certificate of Incorporation of LKQ Southeast, Inc. |
| | Amended and Restated Bylaws of LKQ Southeast, Inc. |
| | Articles of Incorporation of LKQ Taiwan Holding Company |
| | Amended and Restated Bylaws of LKQ Taiwan Holding Company |
| | Certificate of Incorporation of LKQ Trading Company |
| | Amended and Restated Bylaws of LKQ Trading Company |
| | Articles of Incorporation of North American ATK Corporation |
| | Amended and Restated Bylaws of North American ATK Corporation |
| | Restated Articles of Incorporation of Pick-Your-Part Auto Wrecking |
| | Amended and Restated Bylaws of Pick-Your-Part Auto Wrecking |
| | Articles of Incorporation of Potomac German Auto, Inc. |
| | Amended and Restated Bylaws of Potomac German Auto, Inc. |
| | Articles of Incorporation of LKQ Redding Auto Center, Inc. |
| | Amended and Restated Bylaws of Redding Auto Center, Inc. |
| | Certificate of Incorporation of Warn Industries, Inc. |
| | | | | | | | | | | |
| | Amended and Restated Bylaws of Warn Industries, Inc. |
| | Indenture dated as of May 24, 2023 among LKQ Corporation, as Issuer, the Guarantors, and U.S. Bank Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2023). |
| | Registration Rights Agreement dated as of May 24, 2023 among LKQ Corporation, as Issuer, the Guarantors, BofA Securities, Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers named therein (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2023). |
| | Opinion of Sheppard, Mullin, Richter & Hampton LLP. |
| | Opinion of Cozen O'Connor. |
| | Opinion of Stoel Rives LLP. |
| | LKQ Corporation 401(k) Plus Plan dated August 1, 1999 (incorporated herein by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1, Registration No. 333-107417 filed with the SEC on July 28, 2003) |
| | Amendment to LKQ Corporation 401(k) Plus Plan (incorporated herein by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1, Registration No. 333-107417 filed with the SEC on July 28, 2003) |
| | Trust for LKQ Corporation 401(k) Plus Plan (incorporated herein by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1, Registration No. 333-107417 filed with the SEC on July 28, 2003) |
| | LKQ Corporation 401(k) Plus Plan II, as amended and restated effective as of January 1, 2019 (incorporated herein by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2019) |
| | LKQ Corporation 1998 Equity Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 10-Q filed with the SEC on November 1, 2016) |
| | Form of LKQ Corporation Restricted Stock Unit Agreement for Non-Employee Directors (incorporated herein by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2021) |
| | Form of LKQ Corporation Restricted Stock Unit Agreement for Employees (incorporated herein by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022) |
| | Form of LKQ Corporation Performance-Based Restricted Stock Unit Agreement (PSU 1 Award) (incorporated herein by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed with the SEC on February 27, 2020) |
| | Form of LKQ Corporation Performance-Based Restricted Stock Unit Agreement (PSU 2 Award) (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K filed with the SEC on February 27, 2020) |
| | LKQ Corporation Cash Incentive Plan (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 2, 2019) |
| | Form of LKQ Corporation Annual Cash Bonus Award Memorandum (incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed with the SEC on February 27, 2020) |
| | Form of LKQ Corporation Long-Term Cash Incentive Award Memorandum (incorporated herein by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2021) |
| | Form of LKQ Corporation Performance-Based Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2018) |
| | Form of Indemnification Agreement between directors and officers of LKQ Corporation and LKQ Corporation (incorporated herein by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1, Registration No. 333-107417 filed with the SEC on July 28, 2003) |
| | Change of Control Agreement between LKQ Corporation and Walter P. Hanley dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on July 28, 2014) |
| | | | | | | | | | | |
| | Change of Control Agreement between LKQ Corporation and Michael S. Clark dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on July 28, 2014) |
| | Change of Control Agreement between LKQ Corporation and Dominick P. Zarcone dated as of March 30, 2015 (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 1, 2015) |
| | Change of Control Agreement between LKQ Corporation and Justin L. Jude dated as of May 13, 2015 (incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2016) |
| | Change of Control Agreement between LKQ Corporation and Matthew J. McKay dated as of June 1, 2016 (incorporated herein by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K filed with the SEC on February 27, 2017) |
| | Change of Control Agreement between LKQ Corporation and Varun Laroyia dated as of October 1, 2017 (incorporated herein by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2018) |
| | Change of Control Agreement between LKQ Corporation and Michael T. Brooks dated as of January 31, 2020 (incorporated herein by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed with the SEC on February 27, 2020) |
| | Change of Control Agreement between LKQ Corporation and Genevieve L. Dombrowski dated as of March 22, 2021 (incorporated herein by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed with the SEC on February 25, 2022) |
| | Change of Control Agreement between LKQ Corporation and Rick Galloway dated as of September 15, 2022. (incorporated herein by reference to Exhibit 10.4 of the Company's Quarterly Report on Form 10-Q filed with the SEC on November 1, 2022) |
| | LKQ Severance Policy for Key Executives (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 28, 2014) |
| | Offer Letter to Dominick P. Zarcone dated February 12, 2015 (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on March 3, 2015) |
| | Memorandum dated as of May 25, 2017 from Joseph M. Holsten to Dominick P. Zarcone (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 5, 2017) |
| | Offer Letter dated as of September 14, 2022 from Dominick Zarcone to Varun Laroyia (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on September 20, 2022) |
| | Memorandum dated as of September 14, 2022 from Dominick Zarcone to Rick Galloway (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on September 20, 2022) |
| | LKQ Corporation Nonqualified Deferred Compensation Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2023) |
| | Form of Voting and Support Agreement (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 28, 2023) |
| | Voting and Support Agreement, dated as of February 26, 2023, by and among EdgePoint Investment Group Inc. and EdgePoint Wealth Management Inc. and 9485-4692 Québec Inc. and LKQ Corporation. (excluding Schedule A) (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on February 28, 2023) |
| | Voting and Support Agreement, dated as of February 26, 2023, by and among Birch Hill Equity Partners V, LP, Birch Hill Equity Partners (US) V, LP and Birch Hill Equity Partners (Entrepreneurs) V, LP and 9485-4692 Québec Inc. and LKQ Corporation. (excluding Schedule A) (incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the SEC on February 28, 2023) |
| | Commitment Letter, dated as of February 26, 2023, by an among LKQ Corporation, Bank of America, N.A., BofA Securities, Inc., Wells Fargo Bank, National Association and Wells Fargo Securities, LLC (incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the SEC on February 28, 2023) |
| | |
| | |
| | List of subsidiaries, jurisdictions and assumed names (incorporated herein by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2023) |
| | | | | | | | | | | |
| | Subsidiary Guarantor of Guaranteed Securities |
| | Consent of Independent Registered Public Accounting Firm. |
| | Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.1). |
| | Consent of Cozen O'Connor (included in Exhibit 5.2). |
| | Consent of Stoel Rives LLP (included in Exhibit 5.3). |
| | Power of Attorney for officers and directors of LKQ Corporation. |
| | Power of Attorney for officers and directors of the Additional Guarantors (other than Warn Industries, Inc.). |
| | Power of Attorney for officers and directors of Warn Industries, Inc. |
| | Form T-1 Statement of Eligibility of Trustee. |
| | Form of Letter of Transmittal. |
| | Form of Notice of Guaranteed Delivery. |
| | Form of Letter to Clients. |
| | Form of Letter to Registered Holders. |
| | Form of Instruction to Registered Holder from Beneficial Owner. |
| | Filing Fee Table |
| 101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
(a) | | | | | |
| (a) | Each of the undersigned registrants hereby undertakes: |
| (1) | | | | | | | |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | | | | | | | |
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | | | | | | | |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the CommissionSEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Filing Fees Tables" or “Calculation of Registration Fee” table, as applicable, in the effective registration statement; and |
| (iii) | | | | | | | |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | | | | | | | |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | | | | | | | |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | | | | | | | |
| (4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that |
II-2
| is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| (5) | | | | | | | |
| (5) | That, for the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, each undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, an undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | | | | | | | |
| (i) | Any preliminary prospectus or prospectus of an undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | | | | | | | |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of an undersigned registrant or used or referred to by an undersigned registrant; |
| (iii) | | | | | | | |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and |
| (iv) | | | | | | | |
| (iv) | Any other communication that is an offer in the offering made by an undersigned registrant to the purchaser. |
(b) Each of the undersigned registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of a registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each registrant pursuant to the foregoing provisions, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of a registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, that registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) Each of the undersigned registrants hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under section 305(b)2 of the Act.
(e) Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(f) Each undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
II-3
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on
March 6, 2014.September 1, 2023. | | | | | | | | |
| | |
| LKQ CORPORATION |
| |
| By | | /s/ Robert L. Wagman Dominick Zarcone |
| Name: | | Robert L. WagmanDominick Zarcone |
| Title: | | President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the
6th1st day of
March, 2014.September, 2023. | | | | | | | | |
| | |
Signature | | Title |
| |
*/s/ Dominick Zarcone | | President and Chief Executive Officer, Director |
Robert L. Wagman
Dominick Zarcone | | (principal executive officer) |
| |
*/s/ Rick Galloway | | ExecutiveSenior Vice President and Chief Financial Officer |
John S. Quinn
Rick Galloway | | (principal financial officer) |
| |
*/s/ Michael S. Clark | | Vice President – Finance and Controller |
Michael S. Clark | | (principal accounting officer) |
| |
*
/s/ Patrick Berard | | |
A. Clinton Allen
Patrick Berard | | Director |
| |
*
/s/ Meg Ann Divitto | | |
Ronald G. Foster
Meg Ann Divitto | | Director |
| |
*
/s/ Joseph M. Holsten | | |
Joseph M. Holsten | | Director |
| |
*
/s/ Blythe J. McGarvie | | |
Blythe J. McGarvie | | Director |
| | |
/s/ John W. Mendel | | |
| John W. Mendel | | Director |
| |
*
| | |
Paul M. Meister
| | Director |
II-4
| /s/ Jody G. Miller | | |
*
| Jody G. Miller | |
John F. O’Brien
| | Director |
| |
*
/s/ Guhan Subramanian | | |
Guhan Subramanian | | Director |
| |
*
/s/ Xavier Urbain | | |
Robert L. Wagman
| | Director |
| |
*
Xavier Urbain | | Director |
| | |
William M. Webster, IV
| | Director |
| | | | | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-5
SIGNATURES
OF ADDITIONAL REGISTRANTS
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on
March 6, 2014.September 1, 2023. | | | | | | | | |
| | |
Akron Airport Properties,A&A Auto Parts Stores, Inc. |
| American Recycling International, Inc. |
A-Reliable Auto Parts & Wreckers, Inc.Assured Quality Testing Services, LLC |
ATK Motorsports Inc.Automotive Calibration & Technology Services, LLC |
Budget Auto Parts U-Pull-It,DriverFx.com, Inc. |
City Auto Parts of Durham, Inc.Global Powertrain Systems, LLC |
Double R Auto Sales, Inc.KAIR IL, LLC |
Gearhead EnginesKAO Logistics, Inc. |
| KAO Warehouse, Inc. |
| Keystone Automotive Industries, Inc. |
Kwik Auto Body Supplies,Keystone Automotive Operations, Inc. |
Lakefront Capital Holdings,Keystone Automotive Operations of Canada, Inc. |
LKQ 250 Auto, Inc.KPGW Canadian Holdco, LLC |
LKQ A&R Auto Parts, Inc. |
LKQ All Models Corp. |
LKQ Apex Auto Parts, Inc. |
| LKQ Auto Parts of Central California, Inc. |
LKQ Auto Parts of Memphis, Inc. |
LKQ Auto Parts of North Texas, Inc. |
| LKQ Best Automotive Corp. |
LKQ Birmingham,Central, Inc. |
LKQ Brad’s Auto & Truck Parts, Inc. |
LKQ Broadway Auto Parts, Inc. |
LKQ Copher Self Service Auto Parts-Bradenton Inc. |
LKQ Copher Self Service Auto Parts-Clearwater Inc. |
LKQ Copher Self Service Auto Parts-St. Petersburg Inc. |
LKQ Copher Self Service Auto Parts-Tampa Inc. |
LKQ Crystal River, Inc. |
LKQ Foster Auto Parts Salem, Inc. |
| LKQ Foster Auto Parts, Inc. |
LKQ Gorham Auto Parts Corp.Investments, Inc. |
LKQ Great Lakes Corp. |
LKQ Holding Co. |
LKQ Hunts Point Auto Parts Corp. |
| LKQ Lakenor Auto & Truck Salvage, Inc. |
LKQ Management CompanyMidwest, Inc. |
LKQ Metro,Northeast, Inc. |
LKQ Mid-America Auto Parts, Inc.Pick Your Part Central, LLC |
LKQ Pick Your Part Midwest, Auto Parts Corp.LLC |
LKQ Minnesota, Inc.Pick Your Part Southeast, LLC |
LKQ of Indiana,Southeast, Inc. |
LKQ of Michigan, Inc. |
LKQ of Nevada, Inc. |
LKQ of Tennessee, Inc. |
LKQ Online Corp. |
LKQ Penn-Mar, Inc. |
LKQ Plunks Truck Parts & Equipment - Jackson, Inc. |
LKQ Powertrain, Inc. |
LKQ Precious Metals, Inc. |
LKQ Raleigh Auto Parts Corp. |
LKQ Route 16 Used Auto Parts, Inc. |
LKQ Salisbury, Inc. |
II-6
| | |
LKQ Savannah, Inc. |
LKQ Self Service Auto Parts-Holland, Inc. |
LKQ Self Service Auto Parts-Kalamazoo, Inc. |
LKQ Self Service Auto Parts Tulsa, Inc. |
LKQ Smart Parts, Inc. |
| LKQ Taiwan Holding Company |
LKQ Tire & Recycling, Inc. |
| LKQ Trading Company |
LKQ Triplett ASAP, Inc. |
LKQ U-Pull-It Auto Damascus, Inc. |
LKQ U-Pull-It Tigard, Inc. |
LKQ West Michigan Auto Parts, Inc. |
Michael Auto Parts, Incorporated |
| North American ATK Corporation |
P.B.E. Specialties, Inc. |
| Pick-Your-Part Auto Wrecking |
Potomac German Auto South, Inc. |
| Potomac German Auto, Inc. |
| Redding Auto Center, Inc. |
Supreme Auto Parts, Inc. |
U-Pull-It, Inc. |
(Registrants) |
| |
ByBy: | | /s/ John S. Quinn Rick Galloway |
| Name: | | John S. QuinnRick Galloway |
| Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the
6th1st day of
March, 2014.September, 2023. | | | | | | | | | | | |
| | |
Signature | | Title |
| |
*
/s/ Dominick Zarcone | | President (principal executive officer) and a Director |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) and a Director |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| Dominick Zarcone | | |
| |
*By: | | /s/ Victor M. CasiniRick Galloway | | Vice President and Chief Financial Officer |
| Rick Galloway | | (principal financial officer) |
| |
| /s/ Michael S. Clark | Victor M. Casini
Attorney-in-fact
| Vice President – Finance and Controller |
| Michael S. Clark | | (principal accounting officer) |
| |
| /s/ Varun Laroyia | | Director |
| Varun Laroyia | | |
II-7
SIGNATURES
OF ADDITIONAL REGISTRANTS
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on
March 6, 2014.September 1, 2023. | | | | | | | | |
| | |
Damron Holding Company, LLCWarn Industries, Inc. |
LKQ Auto Parts of Orlando, LLC |
| (Registrants) |
| |
By:By | | LKQ Crystal River, Inc./s/ William Rogers |
| Name: | | Sole MemberWilliam Rogers |
| Title: | |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the
6th1st day of
March, 2014.September, 2023. | | | | | | | | | | | | | | |
| | |
Signature | | Title |
| |
*
| | Vice President and Chief Financial Officer of LKQ Crystal |
John S. Quinn
| | River, Inc., the Sole Managing Member of the Registrants |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
/s/ William Rogers | | Vice President and Chief Financial Officer(principal executive officer) |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| William Rogers | | |
| |
*By: | | /s/ Victor M. CasiniKarl Tao | | Vice President and Controller |
| | Victor M. Casini
Attorney-in-fact
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| Karl Tao | | |
KAI China LLC |
KAIR IL, LLC |
(Registrants)(principal financial officer and principal accounting officer) |
| |
By: | | Keystone Automotive Industries, Inc. |
| | Sole Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of |
John S. Quinn
| | Keystone Automotive Industries, Inc.,
the Sole Managing Member of the Registrants |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
Scrap Processors, LLC/s/ Dominick Zarcone | | Director |
U-Pull-It, North, LLCDominick Zarcone |
(Registrants) |
| |
By: | | A-Reliable Auto Parts & Wreckers, Inc. |
| | Sole Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
/s/ Varun Laroyia | | Title
|
| Director | |
*
Varun Laroyia | | Vice President and Chief Financial Officer of | |
John S. Quinn
| | A-Reliable Auto Parts & Wreckers, Inc.,
the Sole Managing Member of the Registrants |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Finance 1 LLC |
LKQ Finance 2 LLC |
(Registrants) |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | President (principal executive officer) and a Manager |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer (principal |
John S. Quinn
| | financial officer) and a Manager |
| |
*
| | Manager |
Joseph M. Holsten
| | |
| |
*
| | Vice President – Finance and Controller
|
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Auto Parts of Utah, LLC |
(Registrant) |
| |
By: | | LKQ of Indiana, Inc. |
| | Sole Member |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of LKQ of |
John S. Quinn | | Indiana, Inc., the Sole Managing Member of the Registrant |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Self Service Auto Parts-Memphis LLC |
(Registrant) |
| |
By: | | LKQ of Tennessee, Inc. |
| | Sole Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of |
John S. Quinn | | LKQ of Tennessee, Inc.,
the Sole Managing Member of the Registrant
|
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
Accu-Parts LLC |
DAP Trucking, LLC |
Greenleaf Auto Recyclers, LLC |
LKQ 1st Choice Auto Parts, LLC |
LKQ Foster Auto Parts Westside LLC |
LKQ Southwick LLC |
(Registrants) |
| |
By: | | LKQ Corporation |
| | Sole Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of LKQ |
John S. Quinn
| | Corporation, the Sole Managing Member of the Registrants |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
Pull-N-Save Auto Parts, LLC |
(Registrant) |
| |
By: | | LKQ Holding Co. |
| | Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
| |
By: | | LKQ of Nevada, Inc. |
| | Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of |
John S. Quinn | | LKQ Holding Co. and LKQ of Nevada, Inc.,
the Managing Members of the Registrant
|
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
Speedway Pull-N-Save Auto Parts, LLC |
(Registrant) |
| |
By: | | LKQ Holding Co. |
| | Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
| |
By: | | Michael Auto Parts, Incorporated |
| | Member |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
| | Vice President and Chief Financial Officer of |
John S. Quinn | | LKQ Holding Co. and Michael Auto Parts, Incorporated,
the Managing Members of the Registrant
|
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Atlanta, L.P. |
(Registrant) |
| |
By: | | Damron Holding Company, LLC |
| | General Partner |
| |
By: | | LKQ Crystal River, Inc. |
| | Sole Member of Damron Holding Company, LLC |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
John S. Quinn
| | Vice President and Chief Financial Officer of LKQ Crystal
River, Inc., the Sole Member of Damron Holding Company,
LLC, the General Partner of the Registrant |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Auto Parts of North Texas, L.P. |
(Registrant) |
| |
By: | | LKQ Holding Co. |
| | General Partner |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
John S. Quinn
| | Vice President and Chief Financial Officer of
LKQ Holding Co., the General Partner of the Registrant |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on March 6, 2014.
| | |
LKQ Heavy Truck-Texas Best Diesel, L.P. |
(Registrant) |
| |
By: | | LKQ Auto Parts of North Texas, Inc. |
| | General Partner |
| |
By | | /s/ John S. Quinn
|
Name: | | John S. Quinn |
Title: | | Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 6th day of March, 2014.
| | |
Signature
| | Title
|
| |
*
John S. Quinn
| | Vice President and Chief Financial Officer of
LKQ Auto Parts of North Texas, Inc.,
the General Partner of the Registrant |
| |
*
| | President (principal executive officer) |
Robert L. Wagman
| | |
| |
*
| | Vice President and Chief Financial Officer |
John S. Quinn
| | (principal financial officer) |
| |
*
| | Vice President – Finance and Controller |
Michael S. Clark
| | (principal accounting officer) |
| | |
| |
*By: | | /s/ Victor M. Casini |
| | Victor M. Casini
Attorney-in-fact
|
II-19
EXHIBIT INDEX
| | |
Exhibit No.
| | Description of Exhibits
|
| |
4.1 | | Indenture dated as of May 9, 2013 among LKQ Corporation, as Issuer, the Guarantors and U.S. Bank National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s report on Form 8-K filed with the SEC on May 10, 2013). |
| |
4.2 | | Registration Rights Agreement dated as of May 9, 2013 among LKQ Corporation, the Guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Representative of the Initial Purchasers (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed with the SEC on May 10, 2013). |
| |
5.1* | | Opinion of Victor M. Casini. |
| |
12.1* | | Computation of Ratio of Earnings to Fixed Charges. |
| |
23.1* | | Consent of Independent Registered Public Accounting Firm. |
| |
23.2* | | Consent of Victor M. Casini (included in Exhibit 5.1). |
| |
24.1** | | Powers of Attorney (included on signature pages). |
| |
25.1** | | Form T-1 Statement of Eligibility of Trustee. |
| |
99.1** | | Form of Letter of Transmittal. |
| |
99.2** | | Form of Notice of Guaranteed Delivery. |
| |
99.3** | | Form of Letter to Clients. |
| |
99.4** | | Form of Letter to Registered Holders. |
| |
99.5** | | Form of Instruction to Registered Holder from Beneficial Owner. |
II-20
