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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 10/04/22 FTAI Finance Holdco Ltd. S-4/A 1:5.7M Broadridge Fin’l So… Inc |
Document/Exhibit Description Pages Size 1: S-4/A Pre-Effective Amendment to Registration Statement HTML 4.67M - Securities for a Merger
Cayman Islands | | | 7350 | | | 98-1420784 |
(State
or other jurisdiction of incorporation or organization) | | | (Primary standard industrial classification code number) | | | (I.R.S. Employer Identification Number) |
Large accelerated filer | | | ☐ | | | | | Accelerated
filer | | | ☐ | |
Non-accelerated filer | | | ☒ | | | | | Smaller
reporting company | | | ☐ | |
| | | | | | Emerging
growth company | | | ☐ |
* | Prior to the closing
of this transaction, the registrant’s name will be changed to “FTAI Aviation Ltd.” |
1. | to
consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of August 12, 2022 (the “merger agreement”), by and among FTAI, FTAI Finance Holdco Ltd. (to be known as FTAI Aviation Ltd. following the Holdco Merger (as defined in the attached proxy statement/prospectus)), a Cayman Islands exempted company (the “Company”) and, prior to the merger, an indirect subsidiary of FTAI and a direct subsidiary of Fortress Worldwide Transportation and Infrastructure General Partnership, a Delaware general partnership, and FTAI Aviation Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), which, among other things, provides for the merger of
Merger Sub with and into FTAI, with FTAI surviving the merger and becoming a wholly-owned subsidiary of the Company, and with: |
(a) | holders of FTAI common shares receiving newly issued ordinary shares of the Company; |
(b) | holders of 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series A Preferred Shares”) receiving 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Share of the
Company (the “Company Series A Preferred Shares”); |
(c) | holders of 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series B Preferred Shares”) receiving 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Share of the Company (the “Company Series B Preferred Shares”); and |
(d) | holders of 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series C Preferred Shares” and collectively with the FTAI Series A Preferred Shares and
the FTAI Series B Preferred Shares, the “FTAI Preferred Shares”) receiving 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Share of the Company (the “Company Series C Preferred Shares” and collectively with the Company Series A Preferred Shares and the Company Series B Preferred Shares, the “Company Preferred Shares”) with the FTAI Preferred Shares to remain outstanding and owned by the Company, |
2. | to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, FTAI is not authorized to consummate the merger — we refer to this proposal as the “adjournment proposal.” |
| | By
Order of the Board of Directors | |
| | ||
| | Chairman and Chief Executive Officer |
• | references herein to the “merger agreement” are to the Agreement and Plan of Merger, dated as of August
12, 2022, by and among FTAI, the Company and Merger Sub, a copy of which is attached hereto as Annex A, as the same may be amended or supplemented from time to time; |
• | references herein to the “merger” are to the merger of Merger Sub with and into FTAI, with FTAI surviving the merger as a wholly-owned subsidiary of the Company, and with holders of FTAI common shares receiving newly issued ordinary shares of the Company and holders of FTAI Preferred
Shares receiving newly issued preferred shares of the Company, as contemplated by the merger agreement; and |
• | references herein to “we,” “us” or “our” or to “our company,” unless otherwise indicated, are to FTAI before completion of the merger, and to the Company and its subsidiaries after the completion of the merger. |
Q: | On
what matters am I being asked to vote? |
A: | You are being asked to consider and vote on the following proposals: |
• | A proposal to approve and adopt the merger agreement and approve the merger, which, among other things, provides for the merger of Merger Sub with and into FTAI, with FTAI surviving the merger and becoming a wholly-owned subsidiary of the Company, and with: |
i. | holders of FTAI common shares receiving newly issued ordinary
shares of the Company; |
ii. | holders of 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series A Preferred Shares”) receiving 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Share of the Company (the “Company Series A Preferred Shares”); |
iii. | holders of 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series B Preferred Shares”) receiving
8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Share of the Company (the “Company Series B Preferred Shares”); and |
iv. | holders of 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Share of FTAI (the “FTAI Series C Preferred Shares” and collectively with the FTAI Series A Preferred Shares and the FTAI Series B Preferred Shares, the “FTAI Preferred Shares”) receiving 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Share of the Company (the “Company Series C Preferred Shares”) with the FTAI Preferred Shares to remain outstanding and owned
by the Company, |
• | A proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, FTAI is not authorized to consummate the merger — we refer to this proposal as the “adjournment proposal.” |
Q: | When and where is the special meeting? |
A: | The special meeting is scheduled to be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, One Manhattan West, New York, New York 10001,
on November 9, 2022 at 8:00 a.m., local time. Even if you plan to attend the special meeting virtually, FTAI recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the special meeting via the special meeting website. If your shares of FTAI common shares are held in street name and you wish to vote your shares at the special meeting via the special meeting website, you must have your specific 16-digit control number, which is included
on your proxy card or the voting instruction form from your bank, broker, trustee or other nominee. Please contact your bank, broker, trustee or other nominee to obtain further instructions. |
Q: | Who is entitled to vote at the special meeting? |
A: | The board of directors of FTAI has fixed October 6, 2022 as the record date for the special meeting. If you were a FTAI shareholder at the close of business on the record date, you are entitled to vote your FTAI shares at the special meeting. |
Q: | What is a proxy? |
A: | A stockholder’s legal designation of another person to vote shares of such stockholder’s common stock at a special meeting is referred to as a proxy. The document used to designate a proxy to vote your shares of FTAI common shares is referred to as a proxy card. |
Q: | What constitutes a quorum for the special meeting? |
A: | A
majority of the outstanding common shares of FTAI entitled to vote, present at the special meeting in person or by proxy, will constitute a quorum for the special meeting. |
Q: | Will the newly issued Company ordinary shares or preferred shares that I receive in the merger be publicly traded? |
A: | Yes. The ordinary shares of the Company, the Company Series A Preferred Shares, the
Company Series B Preferred Shares and the Company Series C Preferred Shares each to be issued in the merger will be listed for trading on the Nasdaq under the symbols “FTAI,” “FTAIP,” “FTAIO” and “FTAIN,” respectively. |
Q: | Who can attend the special meeting? |
A: | All holders of FTAI
common shares and FTAI Preferred Shares as of the record date may attend the special meeting, however only holders of FTAI common shares can vote at the special meeting. If you are a beneficial owner of FTAI common shares held in street name and you wish to attend the special meeting, you must provide evidence of your ownership of FTAI shares, which you can obtain from your broker, banker or nominee. |
Q: | How many votes do I have as a holder of FTAI common shares? |
A: | You are entitled to one vote at the special meeting for each common share of FTAI that you owned as of the record date. As of the close of business on the record date, there were approximately common
shares of FTAI outstanding. |
Q: | Will holders of FTAI Preferred Shares be entitled to vote on the merger proposal at the special meeting? |
A: | No. The holders of FTAI Preferred Shares do not have voting rights with respect to the merger proposal that will be considered at the special meeting. Holders of FTAI Preferred Shares will not be entitled to vote at the special meeting, and should not submit a proxy card with respect to the special meeting or otherwise attempt to vote with respect to their FTAI Preferred Shares. |
Q: | What
vote is required to approve the proposals being presented at the special meeting? |
A: | Merger Proposal: The approval of the merger proposal requires the affirmative vote for the proposal by the holders of a majority of the issued and outstanding common shares of FTAI entitled to vote thereon. |
Q: | What if my bank, broker or other nominee holds my shares of FTAI in “street name”? |
A: | If
a bank, broker or other nominee holds your FTAI shares for your benefit but not in your own name, your FTAI shares are in “street name.” In that case, your bank, broker or other nominee will send you a voting instruction form to use for your FTAI shares. The availability of telephone and Internet voting depends on the voting procedures of your bank, broker or other nominee. Please follow the instructions on the voting instruction form they send you. If your FTAI shares are held in the name of your bank, broker or other nominee and you wish to vote in person at the special meeting, you must contact your bank, broker or other nominee and request a document called a “legal proxy.” |
Q: | How
do I vote? |
A: | After reading and carefully considering the information contained in or incorporated by reference in this proxy statement/prospectus, please vote promptly. In order to ensure your vote is recorded, please submit your proxy or voting instructions as set forth below as soon as possible even if you plan to attend the special meeting. |
Q: | What do I do if I receive more than one set of voting materials? |
A: | You may receive more than one set of voting materials, including multiple
copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your FTAI shares in more than one brokerage account, you will receive a separate instruction card for each brokerage account in which you hold shares. If you are a holder of record and your FTAI shares are held in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card you receive, or you may cast your vote by telephone or Internet by following the instructions on your proxy card. |
Q: | How will my proxy be voted? |
A: | If
you vote by Internet, by telephone or by completing, signing, dating and mailing your proxy card or voting instruction card, your FTAI shares will be voted in accordance with your instructions. If you are a shareholder of record and you sign, date, and return your proxy card but do not indicate how you want to vote with respect to a proposal and do not indicate that you wish to abstain with respect to that proposal, your FTAI shares will be voted in favor of that proposal. |
Q: | What is a “broker non-vote”? |
A: | Under the Nasdaq rules, banks, brokers
and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All the proposals currently scheduled for consideration at the special meeting are “non-routine” matters. |
Q: | How are abstentions and broker non-votes treated? |
A: | Abstentions
will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but broker non-votes will not be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. For purposes of approval, an abstention, broker non-vote or failure to vote will have the same effect as a vote against the merger proposal and will have no effect on the adjournment proposal. |
Q: | Can I change my vote after I have submitted a proxy or voting instruction card? |
A: | Yes. If you are a shareholder of record, you can change your vote at any time before your proxy is voted at the special meeting. If you are a beneficial owner of FTAI shares held in street name, you |
Q: | Where can I find the voting results of the special meeting? |
A: | The
preliminary voting results for the special meeting will be announced at the special meeting. In addition, within four business days following certification of the final voting results, the Company intends to file the final voting results of its special meeting with the SEC on a Current Report on Form 8-K. |
Q: | What happens if I fail to take any action with respect to the meeting? |
A: | If you fail to take any action with respect to the meeting and the merger is approved by FTAI’s shareholders
and consummated, you will become a shareholder of the Company. |
Q: | Are FTAI shareholders entitled to exercise dissenters’ or appraisal rights in connection with the merger? |
A: | No.
Holders of FTAI common and preferred shares are not entitled to appraisal or dissenters’ rights under Delaware law in connection with the merger. If FTAI shareholders are not in favor of the merger, they may vote against or choose to abstain from voting on the merger proposal. Information about how FTAI shareholders may vote on the proposals being considered in connection with the merger can be found under “Special Meeting of FTAI Shareholders.” |
Q: | How does the board of directors of FTAI recommend that I vote with respect to the proposed merger and, if presented, the adjournment proposal being presented at the special meeting? |
A: | FTAI’s
board of directors recommends that the shareholders of FTAI vote “FOR” the merger proposal and, if presented, the adjournment proposal being presented at the special meeting. Notwithstanding the outcome of a shareholder vote on the adjournment proposal, if presented, the chairperson of the special meeting may adjourn the special meeting to another place or time, without regard to the presence of a quorum, pursuant to FTAI’s limited liability company agreement. Additional information on the recommendation of FTAI’s board of directors is set forth in “Special Meeting of FTAI Shareholders — Recommendation of FTAI Board of Directors” beginning on page 48. |
Q: | What
are the United States federal income tax considerations of the merger to holders of FTAI shares? |
A: | The receipt of the Company shares in exchange for FTAI shares pursuant to the merger is generally not expected to be a taxable transaction for U.S. federal income tax purposes, except to the extent that your basis in the FTAI shares is less than the amount of FTAI liabilities allocated to you immediately prior to the merger. See “U.S. Federal Income Tax Considerations of the Merger.” Certain transactions effected as part of the internal restructuring
transactions undertaken by FTAI subsidiaries in anticipation of the merger (the “Restructuring Transactions”) are expected to generate income or gain that is taxable to holders of FTAI shares. The specific tax consequences of the merger and the Restructuring Transactions to you will depend upon your own personal circumstances. You should consult your tax advisors for a full understanding of the U.S. federal, state, local, foreign and other tax consequences of the merger and the Restructuring Transactions to you. |
Q: | What are the conditions to completion of the merger? |
A: | The merger is subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, holders of FTAI common shares having approved the |
Q: | When do you expect the merger to be completed? |
A: | The
merger is expected to close promptly after the special meeting. However, it is possible that factors outside the control of FTAI could result in the merger being completed at a later time, or not at all. |
Q: | Are there any risks that I should consider? |
A: | Yes. There are risks associated with all reorganization transactions, including the proposed merger. There are also risks associated with the Company’s business and the ownership of the
Company shares. We have described certain of these risks and other risks in more detail under “Risk Factors” beginning on page 19. |
Q: | Where can I find more information about FTAI? |
A: | FTAI files periodic reports and other information with the SEC. You may read and copy this information at the SEC’s public reference facility. Please call the SEC at 1-800-SEC-0330 for information about this facility. FTAI’s
SEC filings are also available at the SEC’s website at http://www.sec.gov. |
Q: | Who can answer my questions I may have about the special meeting or the merger? |
A: | If you have more questions about the merger, please call Alan Andreini, Investor Relations of FTAI at (212) 798-6128 or email aandreini@fortress.com.
|
a) | holders of FTAI common shares will receive newly issued ordinary shares of the Company; |
b) | holders of the FTAI Series A Preferred
Shares will receive the Company Series A Preferred Shares; |
c) | holders of the FTAI Series B Preferred Shares will receive the Company Series B Preferred Shares; and |
d) | holders of the FTAI Series C Preferred Shares will receive the Company Series C Preferred Shares. |
• | financial institutions; |
• | insurance companies; |
• | broker-dealers; |
• | regulated
investment companies; |
• | partnerships and trusts; |
• | expatriates or former long-term residents of the United States; |
• | persons who receive FTAI shares through the exercise of stock options (including tandem options) or otherwise as compensation; |
• | persons holding FTAI shares as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security”
or other integrated investment; |
• | persons who hold (actually or constructively) 10% or more of the vote or value of FTAI; |
• | tax-exempt organizations; and |
• | foreign investors. |
• | a citizen or resident of the United States; |
• | a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, or of any state thereof, or the District of Columbia; |
• | an
estate, the income of which is includable in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust if (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. fiduciaries have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person. |
• | The Manager (or its affiliate) holds 3,122,410 options, all of which are fully vested as of the date of the grant; |
• | FTAI’s chief executive officer, Mr. Adams, holds 307,666 tandem options in various stages of vesting; |
• | FTAI has granted stock options to acquire FTAI common stock to each of its non-employee directors, and each of the non-employee directors
holds 5,000 fully vested director options; and |
• | The affiliated director, Mr. Nicholson, holds 307,666 tandem options in various stages of vesting. |
• | a limited availability of market quotations for FTAI’s securities; |
• | reduced liquidity for FTAI’s securities; |
• | a determination that the Company’s ordinary shares or preferred shares are a “penny stock,” which will require brokers trading the Company’s ordinary shares or preferred shares, as applicable, to adhere to more stringent rules,
possibly resulting in a reduced level of trading activity in the secondary trading market for the Company’s ordinary shares or preferred shares, as applicable; |
• | a limited amount of news and analyst coverage; and/or |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | deterioration of worldwide, regional or national economic conditions and activity, which could adversely affect global demand for our services,
and time charter and spot rates; |
• | disruptions to our operations as a result of the potential health impact, such as the availability and efficacy of vaccines, on our employees and crews, and on the workforces of our customers and business partners; |
• | disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions, increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements; |
• | asset
impairment charges and a decline in equipment leasing revenues; |
• | a lack of air travel demand or an inability of airlines to operate to or from certain regions could impact demand for air travel and the financial health of certain airlines, including increasing the financial stress of our lessees; |
• | any related off hire due to global supply chain disruptions resulting from quarantines, worker health, regulations or other impacts of the COVID-19 pandemic, which in turn could disrupt our operations and result in a reduction of revenue; |
• | potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, scheduled or unscheduled maintenance or modifications; |
• | potential delays in vessel inspections and related certifications by class societies, customers or government agencies; |
• | potential
reduced cash flows and financial condition, including potential liquidity constraints; |
• | reduced access to or increased cost of capital, including the ability to refinance any existing obligations, as a result of any credit tightening generally or due to continued declines in global financial markets, including potential interest rate increases and declines in the prices of publicly traded securities of us, our peers and of listed companies generally; and |
• | potential deterioration in the financial condition and prospects of our customers, joint venture partners or business partners, or attempts by customers or third parties to invoke force majeure contractual clauses as a result
of delays or other disruptions. |
• | general demand for the type of assets that we purchase; |
• | general macroeconomic conditions, including market prices for commodities that our assets may serve; |
• | geopolitical events, including war, prolonged armed conflict and acts of terrorism; |
• | outbreaks of communicable diseases and natural disasters; |
• | governmental
regulation; |
• | interest rates; |
• | the availability of credit; |
• | potential reduced cash flows and financial condition, including potential liquidity constraints; |
• | restructurings and bankruptcies of companies in the industries in which we operate, including our customers; |
• | manufacturer
production levels and technological innovation; |
• | manufacturers merging or exiting the industry or ceasing to produce certain asset types; |
• | retirement and obsolescence of the assets that we own; |
• | increases in supply levels of assets in the market due to the sale or merging of operating lessors; and |
• | reintroduction of previously unused or dormant assets into the industries in
which we operate. |
• | terrorist acts, armed hostilities, war and civil disturbances; |
• | acts of piracy; |
• | potential cybersecurity attacks; |
• | significant governmental influence over many aspects of local economies; |
• | seizure, nationalization or expropriation
of property or equipment; |
• | repudiation, nullification, modification or renegotiation of contracts; |
• | limitations on insurance coverage, such as war risk coverage, in certain areas; |
• | political unrest; |
• | foreign and U.S. monetary policy and foreign currency fluctuations and devaluations; |
• | the
inability to repatriate income or capital; |
• | complications associated with repairing and replacing equipment in remote locations; |
• | import-export quotas, wage and price controls, imposition of trade barriers; |
• | U.S. and foreign sanctions or trade embargoes; |
• | restrictions on the transfer of funds into or out of countries in which we operate; |
• | compliance
with U.S. Treasury sanctions regulations restricting doing business with certain nations or specially designated nationals; |
• | regulatory or financial requirements to comply with foreign bureaucratic actions; |
• | compliance with applicable anti-corruption laws and regulations; |
• | changing taxation policies, including confiscatory taxation; |
• | other forms of government regulation and
economic conditions that are beyond our control; and |
• | governmental corruption. |
• | merge,
consolidate or transfer all, or substantially all, of our assets; |
• | incur additional debt or issue preferred shares; |
• | make certain investments or acquisitions; |
• | create liens on our or our subsidiaries’ assets; |
• | sell assets; |
• | make
distributions on or repurchase our shares; |
• | enter into transactions with affiliates; and |
• | create dividend restrictions and other payment restrictions that affect our subsidiaries. |
• | meet the terms and maturities of our existing and future debt facilities; |
• | purchase new assets or refinance existing assets; |
• | fund our working capital needs and maintain adequate liquidity; and |
• | finance
other growth initiatives. |
• | a shift in our investor base; |
• | our
quarterly or annual earnings, or those of other comparable companies; |
• | actual or anticipated fluctuations in our operating results; |
• | changes in accounting standards, policies, guidance, interpretations or principles; |
• | announcements by us or our competitors of significant investments, acquisitions or dispositions; |
• | the failure of securities analysts to cover our ordinary shares; |
• | changes
in earnings estimates by securities analysts or our ability to meet those estimates; |
• | the operating and share price performance of other comparable companies; |
• | prevailing interest rates or rates of return being paid by other comparable companies and the market for securities similar to our preferred shares; |
• | additional issuances of preferred shares; |
• | whether we declare distributions
on our preferred shares; |
• | overall market fluctuations; |
• | general economic conditions; and |
• | developments in the markets and market sectors in which we participate. |
• | changes in economic conditions generally and specifically in our industry sectors, and other risks relating to the global economy, including, but not limited to, the Russia-Ukraine conflict, the ongoing COVID-19 pandemic and other public health crises,
and any related responses or actions by businesses and governments; |
• | reductions in cash flows received from our assets, as well as contractual limitations on the use of our assets to secure debt for borrowed money; |
• | our ability to take advantage of acquisition opportunities at favorable prices; |
• | changes in our asset composition, investment strategy and liquidity as a result of the recently completed spin-off of our infrastructure business or other factors; |
• | a
lack of liquidity surrounding our assets, which could impede our ability to vary our portfolio in an appropriate manner; |
• | the relative spreads between the yield on the assets we acquire and the cost of financing; |
• | adverse changes in the financing markets we access affecting our ability to finance our acquisitions; |
• | customer defaults on their obligations; |
• |
• | the availability and cost of capital for future acquisitions; |
• | concentration of a particular type of asset or in a particular sector; |
• | competition within the aviation and offshore energy sectors; |
• | the
competitive market for acquisition opportunities; |
• | risks related to operating through joint ventures, partnerships, consortium arrangements or other collaborations with third parties; |
• | our ability to successfully integrate acquired businesses; |
• | obsolescence of our assets or our ability to sell, re-lease or re-charter our assets; |
• | exposure to uninsurable losses and force majeure
events; |
• | the legislative/regulatory environment and exposure to increased economic regulation; |
• | exposure to the oil and gas industry’s volatile oil and gas prices; |
• | difficulties in obtaining effective legal redress in jurisdictions in which we operate with less developed legal systems; |
• | our ability to maintain our exemption from registration
under the Investment Company Act of 1940 and the fact that maintaining such exemption imposes limits on our operations; |
• | our ability to successfully utilize leverage in connection with our investments; |
• | foreign currency risk and risk management activities; |
• | effectiveness of our internal control over financial reporting; |
• | exposure to environmental risks, including natural
disasters, increasing environmental legislation and the broader impacts of climate change; |
• | changes in interest rates and/or credit spreads, as well as the success of any hedging strategy we may undertake in relation to such changes; |
• | actions taken by national, state, or provincial governments, including nationalization, or the imposition of new taxes, could materially impact the financial performance or value of our assets; |
• | our dependence on our Manager and its professionals and actual, potential or perceived conflicts of
interest in our relationship with our Manager; |
• | effects of the merger of Fortress Investment Group LLC with affiliates of SoftBank Group Corp.; |
• | volatility in the market price of our shares; |
• | the inability to pay dividends to our shareholders in the future; and |
• | other risks described in the “Risk Factors” section of this registration statement, of which this proxy statement/prospectus
forms a part. |
• | to
consider and vote upon a proposal to approve and adopt the merger agreement and to approve the merger and other matters contemplated by such agreement — we refer to this proposal as the “merger proposal”; and |
• | to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, FTAI is not authorized to consummate the merger — we refer to this proposal as the “adjournment proposal.” |
• | The approval of the merger proposal at the special meeting will require the affirmative vote for the proposal by the holders of a majority of the issued and outstanding common shares of FTAI entitled to vote thereon. |
• | The approval of the adjournment proposal, if presented, will require the affirmative vote of the holders of a majority of the votes cast by holders present in person or represented by proxy at the meeting and entitled to vote thereon.
Notwithstanding the outcome of a shareholder vote on the adjournment proposal, if presented, the chairperson of the special meeting may adjourn the special meeting to another place or time, without regard to the presence of a quorum, pursuant to FTAI’s limited liability company agreement. |
• | You Can Vote By Telephone or By The Internet. You can also vote by telephone
or by the Internet by following the instructions provided on the proxy card. |
• | You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by FTAI’s board “FOR” the merger proposal and “FOR” the adjournment proposal, if presented. Votes received after a matter has been voted upon at the special meeting will not be counted. |
• | You Can Attend the Special Meeting and Vote In Person. You
will receive a ballot electronically. However, if your shares are held in the name of your broker, bank or another nominee, you must get a legal proxy from the broker, bank or other nominee. That is the only way FTAI can be sure that the broker, bank or nominee has not already voted your shares. You must also contact our Investor Relations department to obtain an admission card, and present this admission card, alongside an acceptable form of photo identification (such as a driver's license) to the inspector of elections. |
• | you may send
another proxy card with a later date; or |
• | you may notify Kevin Krieger, FTAI’s Secretary, in writing before the special meeting that you have revoked your proxy; or you may attend the special meeting and vote in person or revoke your proxy in person, although your attendance alone will not revoke any proxy that you have previously given. |
• | that there is no legal prohibition and no order or pending lawsuit by any governmental authority against consummation of the
transactions; |
• | that the Company’s ordinary shares be approved for listing on Nasdaq subject only to official notice of issuance thereof; |
• | the approval and adoption of the merger agreement and approval of the merger at the special meeting by the affirmative vote for the merger proposal by the holders of a majority of the issued and outstanding common shares of FTAI entitled to vote thereon; and |
• | the SEC will have declared the registration statement
effective under the Securities Act, no stop order or similar restraining order by the SEC suspending the effectiveness of the registration statement will be in effect and no proceedings for that purpose will be pending before the SEC. |
Class | | | Term
Expiration | | | Director | | | Age |
Class I | | | 2025 | | | Paul
R. Goodwin | | | 79 |
| | | | Ray
M. Robinson | | | 74 | ||
Class II | | | 2023 | | | | | 65 | |
| | | | Judith
A. Hannaway | | | 70 | ||
| | | | Martin
Tuchman | | | 81 | ||
Class III | | | 2024 | | | A.
Andrew Levinson | | | 66 |
| | | | Kenneth
J. Nicholson | | | 51 |
• | after
a thorough review of other restructuring transaction structures reasonably available to FTAI and the Company, the proposed merger represents the best potential restructuring transaction structure for FTAI and the most attractive opportunity for FTAI’s management to accelerate its business plan; |
• | the management of FTAI supports the restructuring transaction; |
• | the merger is generally not expected to be a taxable event to many of FTAI’s shareholders for U.S. federal income tax purposes; and |
• | feedback
that management had received from FTAI’s shareholders that had indicated that it was difficult to assess the value of FTAI against peer companies given its tax status as a partnership. |
• | the costs of effecting the merger, including the legal and accounting costs that FTAI will incur in connection with implementing the merger; |
• | the
risk that holders of FTAI common shares may fail to provide the votes necessary to effect the merger; |
• | the fact that completion of the merger is conditioned on satisfaction of certain closing conditions that are not within FTAI’s and the Company’s control; |
• | various other risk factors associated with the business of FTAI, as described in the section entitled “Risk Factors”; and |
• | the potential
tax liabilities that could arise as a result of the merger to certain of FTAI’s shareholders. |
• | The Manager (or its affiliate) holds 3,122,410 options, all of which are fully vested as of the date of
grant; |
• | FTAI’s chief executive officer, Mr. Adams, holds 307,666 tandem options in various stages of vesting; |
• | FTAI has granted stock options to acquire FTAI common shares to each of its non-employee directors, and each of the non-employee directors holds 5,000 fully vested director options; and |
• | The affiliated director, Mr. Nicholson, holds 307,666 tandem options in various stages of vesting. |
• | financial institutions; |
• | insurance companies; |
• | broker-dealers; |
• | regulated investment companies; |
• | partnerships and trusts; |
• | expatriates or former long-term residents of the United States; |
• | persons
who receive Company shares through the exercise of employee stock options or otherwise as compensation; |
• | persons holding Company shares as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment; |
• | persons who hold (actually or constructively) 10% or more of the vote or value of the Company; |
• | tax-exempt organizations; and |
• | foreign
investors. |
• | a citizen or resident of the United States; |
• | a
corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, or of any state thereof, or the District of Columbia; |
• | an estate, the income of which is includable in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust if (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. fiduciaries have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person. |
• | FTAI contributes the infrastructure business to FTAI Infrastructure Inc., which comprises of, among other things the (i) Jefferson Terminal business, a multi-modal crude oil and refined products terminal in Beaumont, Texas, (ii) Repauno business, a deep-water port located along the Delaware
River with an underground storage cavern and multiple industrial development opportunities, (iii) Long Ridge investment, an equity method investment in a multi-modal terminal located along the Ohio River with multiple industrial development opportunities, including a power plant in operation, and (iv) Transtar business, five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities. This contribution also included all related project-level debt of the infrastructure entities (the “Separation and Distribution”). Subsequent to the Separation and Distribution, FTAI primarily holds Offshore Energy and Corporate, and all the aviation assets through its ownership of FTAI Finance Holdco Ltd. |
• | FTAI receives a cash dividend of $730.3 million from FTAI Infrastructure
Inc. (the “Dividend”). The cash proceeds used for the Dividend were raised by FTAI Infrastructure Inc. through issuances of debt and preferred equity. |
• | FTAI uses the proceeds of the Dividend from FTAI Infrastructure to pay down third-party debt. |
• | The completion of a reverse merger of FTAI into FTAI Finance Holdco Ltd. (the “Merger”). |
| | FTAI Finance Holdco
Ltd. (historical) | | | Merger of FTAI (a) | | | Pro
Forma Adjustments | | | Notes | | | Pro
Forma Results | |
Revenues | | | 193,956 | | | 9,799 | | | — | | | | | 203,755 | |
| | | | | | | | | | ||||||
Expenses | | | | | | | | | | | |||||
Operating
expenses | | | 69,039 | | | 11,765 | | | — | | | | | 80,804 | |
Cost
of sales | | | 24,191 | | | — | | | — | | | | | 24,191 | |
General
and administrative | | | 5,771 | | | 2,696 | | | — | | | | | 8,467 | |
Acquisition
and transaction expenses | | | 2,601 | | | 2,891 | | | — | | | | | 5,492 | |
Management
fees and incentive allocation to affiliate | | | 4,153 | | | (4,153) | | | 462 | | | (c) | | | 462 |
Depreciation
and amortization | | | 73,690 | | | 6,918 | | | — | | | | | 80,608 | |
Asset
impairment | | | 123,676 | | | — | | | — | | | | | 123,676 | |
Interest
expense | | | 1,266 | | | 90,760 | | | (20,221) | | | (b) | | | 71,805 |
Total
expenses | | | 304,387 | | | 110,877 | | | (19,759) | | | | | 395,505 | |
| | | | | | | | | | ||||||
Other
income | | | | | | | | | | | |||||
Equity
in earnings of unconsolidated entities | | | 233 | | | — | | | — | | | | | 233 | |
Gain
on sale of assets, net | | | 79,933 | | | — | | | — | | | | | 79,933 | |
Interest
income | | | 203 | | | 1,043 | | | — | | | | | 1,246 | |
Total
other income | | | 80,369 | | | 1,043 | | | | | | | 81,412 | ||
Losses
before income taxes | | | (30,062) | | | (100,035) | | | 19,759 | | | | | (110,338) | |
Provision
for (benefit from) income taxes | | | 3,434 | | | (266) | | | — | | | | | 3,168 | |
Net
loss | | | (33,496) | | | (99,769) | | | 19,759 | | | | | (113,506) | |
Less:
Dividends on preferred shares | | | — | | | 13,582 | | | — | | | | | 13,582 | |
Net
loss attributable to shareholders | | | (33,496) | | | (113,351) | | | 19,759 | | | | | (127,088) | |
| | | | | | | | | | ||||||
Loss
per share: | | | | | | | | | | | |||||
Basic | | | (326.47) | | | | | | | | | (1.28) | |||
Diluted | | | (326.47) | | | | | | | | | (1.28) | |||
| | | | | | | | | | ||||||
Weighted
average shares outstanding: | | | | | | | | | | | |||||
Basic | | | 102,600 | | | | | | | | | 99,367,597 | |||
Diluted | | | 102,600 | | | | | | | | | 99,367,597 |
| | FTAI Finance Holdco
Ltd. (historical) | | | Merger of FTAI (a) | | | Pro
Forma Adjustments | | | Notes | | | Pro
Forma Results | |
Revenues | | | 321,422 | | | 14,161 | | | — | | | | | 335,583 | |
| | | | | | | | | | ||||||
Expenses | | | | | | | | | | | |||||
Operating
expenses | | | 42,310 | | | 17,305 | | | — | | | | | 59,615 | |
Cost
of sales | | | 14,308 | | | — | | | — | | | | | 14,308 | |
General
and administrative | | | 9,555 | | | 3,893 | | | — | | | | | 13,448 | |
Acquisition
and transaction expenses | | | 4,933 | | | 12,978 | | | — | | | | | 17,911 | |
Management
fees and incentive allocation to affiliate | | | 9,162 | | | (8,478) | | | 239 | | | (c) | | | 923 |
Depreciation
and amortization | | | 142,121 | | | 5,619 | | | — | | | | | 147,740 | |
Asset
impairment | | | 10,463 | | | — | | | — | | | | | 10,463 | |
Interest
expense | | | 2,318 | | | 152,699 | | | (14,267) | | | (b) | | | 140,750 |
Total
expenses | | | 235,170 | | | 184,016 | | | (14,028) | | | | | 405,158 | |
| | | | | | | | | | ||||||
Other
income (expense) | | | | | | | | | | | |||||
Equity
in losses of unconsolidated entities | | | (1,403) | | | — | | | — | | | | | (1,403) | |
Gain
on sale of assets, net | | | 49,015 | | | — | | | — | | | | | 49,015 | |
Loss
on extinguishment of debt | | | — | | | (3,254) | | | — | | | | | (3,254) | |
Interest
income | | | 1,153 | | | 240 | | | — | | | | | 1,393 | |
Other
expense | | | (1,680) | | | — | | | — | | | | | (1,680) | |
Total
other income (expense) | | | 47,085 | | | (3,014) | | | — | | | | | 44,071 | |
Income
(losses) before income taxes | | | 133,337 | | | (172,869) | | | 14,028 | | | | | (25,504) | |
Provision
for (benefit from) income taxes | | | 3,466 | | | (340) | | | — | | | | | 3,126 | |
Net
income (loss) | | | 129,871 | | | (172,529) | | | 14,028 | | | | | (28,630) | |
Less:
Dividends on preferred shares | | | — | | | 24,758 | | | — | | | | | 24,758 | |
Net
income (loss) attributable to shareholders | | | 129,871 | | | (197,287) | | | 14,028 | | | | | (53,388) | |
| | | | | | | | | | ||||||
Earnings
(loss) per share | | | | | | | | | | | |||||
Basic | | | 1,298.71 | | | | | | | | | (0.59) | |||
Diluted | | | 1,298.71 | | | | | | | | | (0.59) | |||
| | | | | | | | | | ||||||
Weighted
average shares outstanding: | | | | | | | | | | | |||||
Basic | | | 100,000 | | | | | | | | | 89,922,088 | |||
Diluted | | | 100,000 | | | | | | | | | 89,922,088 |
| | FTAI Finance Holdco
Ltd. (historical) | | | Merger of FTAI (a) | | | Pro
Forma Adjustments | | | Notes | | | Pro
Forma Results | |
Revenues | | | 281,756 | | | 16,178 | | | — | | | | | 297,934 | |
| | | | | | | | | | ||||||
Expenses | | | | | | | | | | | |||||
Operating
expenses | | | 20,963 | | | 18,958 | | | — | | | | | 39,921 | |
Cost
of sales | | | 200 | | | — | | | — | | | | | 200 | |
General
and administrative | | | 10,123 | | | 3,983 | | | — | | | | | 14,106 | |
Acquisition
and transaction expenses | | | 8,491 | | | 1,377 | | | — | | | | | 9,868 | |
Management
fees and incentive allocation to affiliate | | | 11,549 | | | (6,103) | | | — | | | | | 5,446 | |
Depreciation
and amortization | | | 134,723 | | | 6,563 | | | — | | | | | 141,286 | |
Asset
impairment | | | 33,978 | | | — | | | — | | | | | 33,978 | |
Interest
expense | | | 2,110 | | | 85,332 | | | (13,832) | | | (b) | | | 73,610 |
Total
expenses | | | 222,137 | | | 110,110 | | | (13,832) | | | | | 318,415 | |
| | | | | | | | | | ||||||
Other
income (expense) | | | | | | | | | | | |||||
Equity
in losses of unconsolidated entities | | | (1,932) | | | — | | | — | | | | | (1,932) | |
Loss
on sale of assets, net | | | (300) | | | — | | | — | | | | | (300) | |
Loss
on extinguishment of debt | | | — | | | (6,943) | | | — | | | | | (6,943) | |
Interest
income | | | 94 | | | 46 | | | — | | | | | 140 | |
Total
other expense | | | (2,138) | | | (6,897) | | | — | | | | | (9,035) | |
Income
(loss) before income taxes | | | 57,481 | | | (100,829) | | | 13,832 | | | | | (29,516) | |
(Benefit
from) provision for income taxes | | | (4,674) | | | 331 | | | — | | | | | (4,343) | |
Net
income (loss) from continuing operations | | | 62,155 | | | (101,160) | | | 13,832 | | | | | (25,173) | |
Net
income from discontinued operations, net of income taxes | | | — | | | 1,331 | | | — | | | | | 1,331 | |
Net
income (loss) | | | 62,155 | | | (99,829) | | | 13,832 | | | | | (23,842) | |
Less:
Dividends on preferred shares | | | — | | | 17,869 | | | — | | | | | 17,869 | |
Net
income (loss) attributable to shareholders | | | 62,155 | | | (117,698) | | | 13,832 | | | | | (41,711) | |
| | | | | | | | | | ||||||
Earnings
(loss) per share: | | | | | | | | | | | |||||
Basic | | | | | | | | | | | |||||
Continuing
operations | | | 621.55 | | | | | | | | | (0.50) | |||
Discontinued
operations | | | — | | | | | | | | | 0.02 | |||
Diluted | | | | | | | | | | | |||||
Continuing
operations | | | 621.55 | | | | | | | | | (0.50) | |||
Discontinued
operations | | | — | | | | | | | | | 0.02 | |||
| | | | | | | | | | ||||||
Weighted
average shares outstanding: | | | | | | | | | | | |||||
Basic | | | 100,000 | | | | | | | | | 86,015,702 | |||
Diluted | | | 100,000 | | | | | | | | | 86,015,702 |
| | FTAI Finance Holdco
Ltd. (historical) | | | Merger of FTAI (a) | | | Pro
Forma Adjustments | | | Notes | | | Pro
Forma Results | |
Revenues | | | 336,130 | | | 13,192 | | | — | | | | | 349,322 | |
| | | | | | | | | | ||||||
Expenses | | | | | | | | | | | |||||
Operating
expenses | | | 17,697 | | | 12,966 | | | — | | | | | 30,663 | |
General
and administrative | | | 10,875 | | | 2,283 | | | — | | | | | 13,158 | |
Acquisition
and transaction expenses | | | 11,434 | | | 6,189 | | | — | | | | | 17,623 | |
Management
fees and incentive allocation to affiliate | | | 16,961 | | | 2,557 | | | — | | | | | 19,518 | |
Depreciation
and amortization | | | 128,990 | | | 6,905 | | | — | | | | | 135,895 | |
Interest
expense | | | 2,433 | | | 75,245 | | | (13,775) | | | (b) | | | 63,903 |
Total
expenses | | | 188,390 | | | 106,145 | | | (13,775) | | | | | 280,760 | |
| | | | | | | | | | ||||||
Other
income (expense) | | | | | | | | | | | |||||
Equity
in losses of unconsolidated entities | | | (1,829) | | | — | | | — | | | | | (1,829) | |
Gain
on sale of assets, net | | | 81,954 | | | — | | | — | | | | | 81,954 | |
Interest
income | | | 104 | | | 13 | | | — | | | | | 117 | |
Other
income | | | — | | | 1,002 | | | — | | | | | 1,002 | |
Total
other income | | | 80,229 | | | 1,015 | | | — | | | | | 81,244 | |
Income
(loss) before income taxes | | | 227,969 | | | (91,938) | | | 13,775 | | | | | 149,806 | |
Provision
for (benefit from) income taxes | | | 5,162 | | | (131) | | | — | | | | | 5,031 | |
Net
income (loss) from continuing operations | | | 222,807 | | | (91,807) | | | 13,775 | | | | | 144,775 | |
Net
income from discontinued operations, net of income taxes | | | — | | | 73,462 | | | — | | | | | 73,462 | |
Net
income (loss) | | | 222,807 | | | (18,345) | | | 13,775 | | | | | 218,237 | |
Less:
Net income attributable to non-controlling interests in consolidated subsidiaries from discontinued operations | | | — | | | 247 | | | — | | | | | 247 | |
Less:
Dividends on preferred shares | | | — | | | 1,838 | | | — | | | | | 1,838 | |
Net
income (loss) attributable to shareholders | | | 222,807 | | | (20,430) | | | 13,775 | | | | | 216,152 | |
| | | | | | | | | | ||||||
Earnings
per share: | | | | | | | | | | | |||||
Basic | | | | | | | | | | | |||||
Continuing
operations | | | 2,228.07 | | | | | | | | | 1.66 | |||
Discontinued
operations | | | — | | | | | | | | | 0.85 | |||
Diluted | | | | | | | | | | | |||||
Continuing
operations | | | 2,228.07 | | | | | | | | | 1.66 | |||
Discontinued
operations | | | — | | | | | | | | | 0.85 | |||
| | | | | | | | | | ||||||
Weighted
average shares outstanding: | | | | | | | | | | | |||||
Basic | | | 100,000 | | | | | | | | | 85,992,019 | |||
Diluted | | | 100,000 | | | | | | | | | 86,029,363 |
| | FTAI Finance Holdco
Ltd. (historical) | | | Merger of FTAI (a) | | | Pro
Forma Adjustments | | | Notes | | | Pro
Forma Results | |
Assets | | | | | | | | | | | |||||
Cash
and cash equivalents | | | 42,681 | | | 7,704 | | | — | | | | | 50,385 | |
Accounts
receivable, net | | | 73,227 | | | 4,762 | | | — | | | | | 77,989 | |
Leasing
equipment, net | | | 1,674,053 | | | 134,583 | | | — | | | | | 1,808,636 | |
Finance
leases, net | | | 6,494 | | | — | | | — | | | | | 6,494 | |
Investments | | | 22,638 | | | — | | | — | | | | | 22,638 | |
Intangible
assets, net | | | 31,868 | | | — | | | — | | | | | 31,868 | |
Inventory,
net | | | 112,650 | | | — | | | — | | | | | 112,650 | |
Other
assets | | | 162,813 | | | 48,446 | | | — | | | | | 211,259 | |
Total
assets | | | 2,126,424 | | | 195,495 | | | — | | | | | 2,321,919 | |
| | | | | | | | | | ||||||
Liabilities | | | | | | | | | | | |||||
Accounts
payable and accrued liabilities | | | 21,120 | | | 69,991 | | | (5,623) | | | (c) | | | 85,488 |
Debt,
net | | | — | | | 2,768,156 | | | (711,243) | | | (c) | | | 2,056,913 |
Management
fees payable to affiliate | | | 41,796 | | | (41,796) | | | — | | | | | — | |
Loans
payable to affiliate | | | 26,447 | | | (26,447) | | | — | | | | | — | |
Maintenance
deposits | | | 58,553 | | | — | | | — | | | | | 58,553 | |
Security
deposits | | | 26,251 | | | 1,510 | | | — | | | | | 27,761 | |
Other
liabilities | | | 39,749 | | | (8,489) | | | — | | | | | 31,260 | |
Total
liabilities | | | 213,916 | | | 2,762,925 | | | (716,866) | | | | | 2,259,975 | |
| | | | | | | | | | ||||||
Equity | | | | | | | | | | | |||||
Ordinary
shares ($0.01 par value per share; 2,000,000,000 shares authorized; 99,200,196 shares issued and outstanding as of June 30, 2022) | | | — | | | 992 | | | — | | | | | 992 | |
Preferred
shares ($0.01 par value per share; 200,000,000 shares authorized; 13,320,000 shares issued and outstanding as of June 30, 2022) | | | — | | | 133 | | | — | | | | | 133 | |
Additional
paid in capital | | | 1,265,573 | | | (1,585,275) | | | 730,340 | | | (c) | | | 410,638 |
Retained
earnings | | | 646,935 | | | (983,280) | | | (13,474) | | | (d) | | | (349,819) |
Total
equity | | | 1,912,508 | | | (2,567,430) | | | 716,866 | | | | | 61,944 | |
Total
liabilities and equity | | | 2,126,424 | | | 195,495 | | | — | | | | | 2,321,919 |
a) | Adjustment
reflects the Merger, which primarily comprises of assumption of FTAI’s Corporate debt and Offshore Energy, conversion of FTAI’s Corporate preferred equity into preferred equity of the Company, and includes the elimination of intercompany transactions between the Company and FTAI. Adjustment also reflects Offshore Energy results of operations that would have been included if the combination of the businesses had taken place on January 1, 2019. |
b) | Reflects the reduction in interest expense of $20.2 million, $14.3 million, $13.8 million and $13.8 million to give effect to the estimated repayment of
debt described in (c) below for the six months ended June 30, 2022 and the years ended December 31, 2021, 2020 and 2019, respectively. |
c) | Reflects the cash distribution from FTAI Infrastructure Inc. to FTAI in connection with the Separation and Distribution. FTAI Infrastructure Inc. has $300.0 million of preferred stock and $500.0 million aggregate principal amount of indebtedness. FTAI received a dividend of $730.3 million in cash, from the proceeds of the preferred stock and indebtedness, which reflects the amounts raised, primarily net of related discounts, fees, and expenses. FTAI used the proceeds received from FTAI
Infrastructure Inc. to repay certain of FTAI’s outstanding debt and related premiums and accrued interest, and wrote off unamortized deferred financing costs of $13.5 million of the related debt facilities. The repayment of debt included outstanding borrowings under its 2021 bridge loans, $200.0 million of its 6.50% senior unsecured notes due 2025, and approximately $175.0 million of its outstanding borrowings under its revolving credit facility. The write-off of deferred financing costs has been reflected as an adjustment to retained earnings. The adjustment also reflects an increase in management fees driven by an increase in total equity as a result of the debt repayment, in accordance with the management agreement. |
d) | Reflects the impact of the
Company’s equity from the pro forma adjustment described in note (c). |
• | serving as our consultant with respect to the periodic review of the acquisition criteria and parameters for asset acquisitions, borrowings, financing transactions and operations; |
• | investigating, analyzing, valuing and selecting asset acquisition opportunities; |
• | with
respect to our prospective acquisitions and dispositions of assets, conducting negotiations with brokers, sellers and purchasers and their respective agents and representatives, investment bankers and owners of privately and publicly held companies; |
• | engaging and supervising independent contractors that provide services relating to us or any of our assets, including, but not limited to, investment banking, legal or regulatory advisory, tax advisory, due diligence, accounting advisory, securities brokerage, brokerage and other financial, brokerage and consulting services as the Manager determines from time to time is advisable; |
• | negotiating
the sale, exchange or other disposition of any assets; |
• | coordinating and managing operations of any of our joint venture or co-investment interests held by us and conducting all matters with respect to those joint ventures or co-investment partners; |
• | coordinating and supervising all matters related to our assets, including the leasing and/or sale and management of such assets and retaining agents, managers or other advisors in connection therewith; |
• | providing executive and administrative personnel, office space and office services
required in rendering services to us; |
• | administering the day-to-day operations and performing and supervising the performance of such other administrative functions necessary to our management as may be agreed upon by our Manager and our board of directors, including, without limitation, the collection of revenues and the payment of our debts and obligations and maintenance of appropriate computer services to perform such administrative functions; |
• | communicating with the past, current and prospective holders of any of our equity or debt securities as required to satisfy the reporting and other requirements of any governmental bodies or agencies or trading markets and to maintain
effective relations with such holders; |
• | counseling us in connection with policy decisions to be made by our board of directors; |
• | evaluating and recommending to our board of directors modifications to any hedging strategies in effect on the date hereof and engaging in hedging activities consistent with such strategies, as in effect from time to time; |
• | counseling us regarding the maintenance of our exemption from the Investment Company Act and monitoring compliance with the requirements for maintaining such an exemption; |
• | assisting
us in developing criteria that are specifically tailored to our acquisition objectives and making available to us its knowledge and experience with respect to our target assets; |
• | representing and making recommendations to us in connection with the purchase and finance, and commitment to purchase and finance, of our target assets, and in connection with the sale and commitment to sell such assets; |
• | monitoring the operating performance of our assets and providing periodic reports with respect thereto to our board of directors, including comparative information with respect to such operating performance, valuation and budgeted or projected operating results; |
• | investing
and re-investing any of our moneys and securities (including investing in short term investments pending investment in asset acquisitions, payment of fees; costs and expenses; or payments of dividends or distributions to our shareholders and partners) and advising us as to our capital structure and capital raising; |
• | causing us to retain qualified accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and to conduct quarterly compliance reviews with respect thereto; |
• | causing us to qualify to do business in all applicable jurisdictions and
to obtain and maintain all appropriate licenses; |
• | taking all necessary actions to enable us to make required tax filings and reports, including soliciting shareholders for required information to the extent provided by the provisions of the Code; |
• | assisting us in complying with all regulatory requirements applicable to us in respect of our business activities, including preparing or causing to be prepared all financial statements required under applicable regulations and contractual undertakings and all reports and documents required under the Exchange Act; |
• | handling and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which we may be involved or to which we may be subject arising out of our day-to-day operations, subject to such limitations or parameters as may be imposed from time to time by our board of directors; |
• | using commercially reasonable efforts
to cause expenses incurred by or on behalf of us to be within any expense guidelines set by our board of directors from time to time; |
• | performing such other services as may be required from time to time for management and other activities relating to our assets as our board of directors and our Manager shall agree from time to time or as our Manager shall deem appropriate under the particular circumstances; |
• | using commercially reasonable efforts to cause us to comply with all applicable laws; and |
• | traveling in connection with
the performance of any services or activities relating to our assets, operations, acquisitions or investment analysis. |
• | the willful violation of the Management Agreement by the Manager in its corporate capacity (as distinguished from the acts of any employees of the Manager which are taken without the complicity of any of the Manager’s management) under the Management Agreement; |
• | our
Manager’s fraud, misappropriation of funds, or embezzlement against us; or |
• | our Manager’s gross negligence of duties under our Management Agreement. |
Aviation
Assets | | | Widebody | | | Narrowbody | | | Total |
Aircraft | | | | | | | |||
Assets
at January 1, 2022 | | | 13 | | | 96 | | | 108 |
Purchases | | | 1 | | | 21 | | | 22 |
Sales | | | (3) | | | (1) | | | (4) |
Transfers | | | (2) | | | (17) | | | (19) |
Assets
at June 30, 2022 | | | 9 | | | 98 | | | 107 |
| | | | | | ||||
Engines | | | | | | | |||
Assets
at January 1, 2022 | | | 68 | | | 139 | | | 207 |
Purchases | | | 1 | | | 36 | | | 37 |
Sales | | | (10) | | | (19) | | | (29) |
Transfers | | | 5 | | | 24 | | | 29 |
Assets
at January 30, 2022 | | | 64 | | | 180 | | | 244 |
Aviation Assets | | | Widebody | | | Narrowbody | | | Total |
Aircraft | | | | | | | |||
Assets
at January 1, 2021 | | | 15 | | | 63 | | | 78 |
Purchases | | | 1 | | | 51 | | | 52 |
Sales | | | (4) | | | — | | | (4) |
Transfers | | | 1 | | | (19) | | | (18) |
Assets
at December 31, 2021 | | | 13 | | | 95 | | | 108 |
Purchases | | | 1 | | | 21 | | | 22 |
Sales | | | (3) | | | (1) | | | (4) |
Transfers | | | (2) | | | (17) | | | (19) |
Assets
at June 30, 2022 | | | 9 | | | 98 | | | 107 |
Engines | | | | | | | |||
Assets
at January 1, 2021 | | | 88 | | | 98 | | | 186 |
Purchases | | | 11 | | | 49 | | | 60 |
Sales | | | (29) | | | (27) | | | (56) |
Transfers | | | (2) | | | 19 | | | 17 |
Assets
at December 31, 2021 | | | 68 | | | 139 | | | 207 |
Purchases | | | 1 | | | 36 | | | 37 |
Sales | | | (10) | | | (19) | | | (29) |
Transfers | | | 5 | | | 24 | | | 29 |
Assets
at June 30, 2022 | | | 64 | | | 180 | | | 244 |
| | (Unaudited) Six
Months Ended June 30, | | | Change | ||||
(in thousands) | | | 2022 | | | 2021 | | | '22
vs '21 |
Revenues | | | | | | | |||
Lease
income | | | $71,043 | | | $79,997 | | | $(8,954) |
Maintenance
revenue | | | 76,664 | | | 47,511 | | | 29,153 |
Finance
lease income | | | 213 | | | 846 | | | (633) |
Other
revenue | | | 46,036 | | | 6,190 | | | 39,846 |
Total
revenues | | | 193,956 | | | 134,544 | | | 59,412 |
| | | | | | ||||
Expenses | | | | | | | |||
Operating
expenses | | | 69,039 | | | 10,511 | | | 58,528 |
Cost
of sales | | | 24,191 | | | 3,210 | | | 20,981 |
General
and administrative | | | 5,771 | | | 4,304 | | | 1,467 |
Acquisition
and transaction expenses | | | 2,601 | | | 2,578 | | | 23 |
Management
fees and incentive allocation to affiliate | | | 4,153 | | | 4,911 | | | (758) |
Depreciation
and amortization | | | 73,690 | | | 67,369 | | | 6,321 |
Asset
impairment | | | 123,676 | | | 2,189 | | | 121,487 |
Interest
expense | | | 1,266 | | | 1,150 | | | 116 |
Total
expenses | | | 304,387 | | | 96,222 | | | 208,165 |
| | | | | | ||||
Other
income (expense) | | | | | | | |||
Equity
in earnings (losses) of unconsolidated entities | | | 233 | | | (681) | | | 914 |
Gain
on sale of assets, net | | | 79,933 | | | 4,782 | | | 75,151 |
Interest
income | | | 203 | | | 624 | | | (421) |
Total
other income | | | 80,369 | | | 4,725 | | | 75,644 |
(Loss)
income before income taxes | | | (30,062) | | | 43,047 | | | (73,109) |
Provision
for income taxes | | | 3,434 | | | 537 | | | 2,897 |
Net
(loss) income attributable to shareholders | | | $(33,496) | | | $42,510 | | | $(76,006) |
| | (Unaudited) Six
Months Ended June 30, | | | Change | ||||
(in thousands) | | | 2022 | | | 2021 | | | '22
vs '21 |
Net (loss) income attributable to shareholders | | | $(33,496) | | | $42,510 | | | $(76,006) |
Add:
Provision for income taxes | | | 3,434 | | | 537 | | | 2,897 |
Add:
Acquisition and transaction expenses | | | 2,601 | | | 2,578 | | | 23 |
Add:
Asset impairment charges | | | 123,676 | | | 2,189 | | | 121,487 |
Add:
Depreciation & amortization expense(1) | | | 97,508 | | | 82,274 | | | 15,234 |
Add:
Interest expense | | | 1,266 | | | 1,150 | | | 116 |
Add:
Pro-rata share of Adjusted EBITDA from unconsolidated entities(2) | | | 406 | | | (594) | | | 1,000 |
Less:
Equity in (earnings) losses of unconsolidated entities | | | (233) | | | 681 | | | (914) |
Adjusted
EBITDA (non-GAAP) | | | $195,162 | | | $131,325 | | | $63,837 |
| | Year
Ended December 31, | | | Change | ||||||||||
(in thousands) | | | 2021 | | | 2020 | | | 2019 | | | '21
vs '20 | | | '20 vs '19 |
Revenues | | | | | | | | | | | |||||
Lease
income | | | $161,985 | | | $166,331 | | | $197,305 | | | $(4,346) | | | $(30,974) |
Maintenance
revenue | | | 128,819 | | | 102,007 | | | 134,369 | | | 26,812 | | | (32,362) |
Finance
lease income | | | 1,747 | | | 2,260 | | | 2,648 | | | (513) | | | (388) |
Other
revenue | | | 28,871 | | | 11,158 | | | 1,808 | | | 17,713 | | | 9,350 |
Total
revenues | | | 321,422 | | | 281,756 | | | 336,130 | | | 39,666 | | | (54,374) |
| | | | | | | | | | ||||||
Expenses | | | | | | | | | | | |||||
Operating
expenses | | | 42,310 | | | 20,963 | | | 17,697 | | | 21,347 | | | 3,266 |
Cost
of sales | | | 14,308 | | | 200 | | | — | | | 14,108 | | | 200 |
General
and administrative | | | 9,555 | | | 10,123 | | | 10,875 | | | (568) | | | (752) |
Acquisition
and transaction expenses | | | 4,933 | | | 8,491 | | | 11,434 | | | (3,558) | | | (2,943) |
Management
fees and incentive allocation to affiliate | | | 9,162 | | | 11,549 | | | 16,961 | | | (2,387) | | | (5,412) |
Depreciation
and amortization | | | 142,121 | | | 134,723 | | | 128,990 | | | 7,398 | | | 5,733 |
Asset
impairment | | | 10,463 | | | 33,978 | | | — | | | (23,515) | | | 33,978 |
Interest
expense | | | 2,318 | | | 2,110 | | | 2,433 | | | 208 | | | (323) |
Total
expenses | | | 235,170 | | | 222,137 | | | 188,390 | | | 13,033 | | | 33,747 |
| | | | | | | | | | ||||||
Other
income (expense) | | | | | | | | | | | |||||
Equity
in losses of unconsolidated entities | | | (1,403) | | | (1,932) | | | (1,829) | | | 529 | | | (103) |
Gain
(loss) on sale of assets, net | | | 49,015 | | | (300) | | | 81,954 | | | 49,315 | | | (82,254) |
Interest
income | | | 1,153 | | | 94 | | | 104 | | | 1,059 | | | (10) |
Other
expense | | | (1,680) | | | — | | | — | | | (1,680) | | | — |
Total
other income (expense) | | | 47,085 | | | (2,138) | | | 80,229 | | | 49,223 | | | (82,367) |
Income
before income taxes | | | 133,337 | | | 57,481 | | | 227,969 | | | 75,856 | | | (170,488) |
Provision
for (benefit from) income taxes | | | 3,466 | | | (4,674) | | | 5,162 | | | 8,140 | | | (9,836) |
Net
income attributable to shareholders | | | $129,871 | | | $62,155 | | | $222,807 | | | $67,716 | | | $(160,652) |
| | Year Ended December 31, | | | Change | ||||||||||
(in
thousands) | | | 2021 | | | 2020 | | | 2019 | | | '21
vs '20 | | | '20 vs '19 |
Net income attributable to shareholders | | | $129,871 | | | $62,155 | | | $222,807 | | | $67,716 | | | $(160,652) |
Add:
Provision for (benefit from) income taxes | | | 3,466 | | | (4,674) | | | 5,162 | | | 8,140 | | | (9,836) |
Add:
Acquisition and transaction expenses | | | 4,933 | | | 8,491 | | | 11,434 | | | (3,558) | | | (2,943) |
Add:
Asset impairment charges | | | 10,463 | | | 33,978 | | | — | | | (23,515) | | | 33,978 |
Add:
Incentive allocations | | | — | | | — | | | 7,665 | | | — | | | (7,665) |
Add:
Depreciation & amortization expense(1) | | | 170,099 | | | 165,069 | | | 159,152 | | | 5,030 | | | 5,917 |
Add:
Interest expense | | | 2,318 | | | 2,110 | | | 2,433 | | | 208 | | | (323) |
Add:
Pro-rata share of Adjusted EBITDA from unconsolidated entities(2) | | | (1,203) | | | (1,932) | | | (1,829) | | | 729 | | | (103) |
Less:
Equity in losses of unconsolidated entities | | | 1,403 | | | 1,932 | | | 1,829 | | | (529) | | | 103 |
Adjusted
EBITDA (non-GAAP) | | | $321,350 | | | $267,129 | | | $408,653 | | | $54,221 | | | $(141,524) |
(1) | Includes the following items for the periods ended June 30, 2022 and 2021 (Unaudited) and years ended December 31, 2021, 2020 and 2019: (i) depreciation expense of $73,690, $67,369, $142,121, $134,723 and $128,990, (ii) lease intangible amortization of $6,968, $1,950, $4,993, $3,747 and $7,181 and (iii) amortization for lease incentives of $16,850, $12,955, $22,985, $26,599 and $22,981, respectively. |
(2) | Includes the following items for the periods ended June 30, 2022 and 2021 (Unaudited) and years ended December 31, 2021, 2020 and 2019: (i) net income (loss) of $234, $(681), $(1,403), $(1,932) and $(1,829) and (ii) depreciation
and amortization of $172, $87, $200, $0 and $0, respectively. |
• | Other
revenue increased $39.8 million primarily due to an increase in engine modules, spare parts and used material inventory sales. Our module sales are facilitated through The Module Factory, a dedicated commercial maintenance center designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines. Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool; |
• | Maintenance revenue increased $29.2 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft
and lower maintenance billings related to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines. Maintenance revenues from our owned aircraft and engines leased to Russian airlines was approximately $11.5 million for the six months ended June 30, 2021 (Unaudited); and |
• | Lease income decreased $9.0 million primarily due to the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines. Basic lease revenues from our owned aircraft and engines leased to Russian airlines would have been approximately $20.9 million for the six months ended June 30, 2022 (Unaudited). This decrease is partially offset by an increase in
the number of aircraft and engines placed on lease to non-Russian airlines. |
• | Asset impairment increased $121.5 million for the adjustment of the carrying value of leasing equipment to fair value, primarily due to the write down of aircraft and engines located in Ukraine and Russia
that may not be recoverable. See Note 3 to the consolidated financial statements for additional information; |
• | Operating expenses increased $58.5 million primarily as a result of an increase in bad debt expense due to the sanctions imposed on Russian airlines of $47.8 million, shipping and storage fees, professional fees, repairs and maintenance fees and other operating expenses; |
• | Cost of sales increased $21.0 million primarily as a result of an increase in engine modules, spare parts and used material inventory sales; |
• | Depreciation
and amortization increased $6.3 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool; and |
• | General and administrative expenses increased $1.5 million driven by an increase in reimbursable expenses to the Manager. |
• | Maintenance
revenue increased $26.8 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered; |
• | Other revenue increased $17.7 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020; and |
• | Lease income decreased $4.3 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the
year. |
• | Operating expenses increased $21.3 million primarily due to an increase in bad debt expense of $9.6 million, shipping and storage fees and other operating expenses; |
• | Cost
of sales increased $14.1 million primarily as a result of an increase in engine modules, spare parts and used material inventory sales; |
• | Depreciation and amortization increased $7.4 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool; |
• | Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021 which were primarily related to early lease terminations. See Note 3 to the consolidated financial statements for additional information; |
• | Acquisition
and transaction expenses decreased $3.6 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment; and |
• | Management fees and incentive allocation to affiliate decreased $2.4 million driven by lower management fees allocated to the Company. |
• | Maintenance
revenue decreased $32.4 million primarily due to lower aircraft and engine utilization as a result of the COVID-19 pandemic and lower end-of-lease maintenance compensation, partially offset by the recognition of maintenance deposits due to the early redelivery of eleven aircraft; |
• | Lease income decreased $31.0 million primarily due to an increase in aircraft redelivered, a decrease in the number of engines on lease and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft placed on lease; and |
• | Other revenue increased $9.4 million primarily due to the increase in end-of lease redelivery compensation and
settlement of an engine loss. |
• | Asset impairment increased $34.0 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation. See Note 3 to the
consolidated financial statements for additional information; |
• | Depreciation and amortization increased $5.7 million primarily driven by additional assets owned and on lease, partially offset by additional aircraft redelivered and parted out into our engine leasing pool; |
• | Operating expenses increased $3.3 million primarily as a result of an increase in shipping and storage fees, compensation and benefit expense and professional fees, partially offset by a decrease in repairs and maintenance expenses and other operating expenses; |
• | Management
fees and incentive allocation to affiliate decreased $5.4 million driven by lower management fee allocated to the Company; and |
• | Acquisition and transaction expenses decreased $2.9 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment. |
• | Cash used for the purpose of making investments was $333.0 million, $180.9 million, $612.5 million, $326.3 million and $581.5 million during the six months ended June 30, 2022 and 2021 (Unaudited) and the years ended December 31, 2021, 2020, and 2019, respectively. |
• | Capital
distributions to Parent were $104.8 million, $88.2 million, $277.9 million, $238.1 million and $393.4 million during the six months ended June 30, 2022 and 2021 (Unaudited) and the years ended December 31, 2021, 2020, and 2019, respectively. |
• | Release of maintenance and security deposits were $0.9 million, $13.1 million, $21.9 million, $20.4 million and $27.3 million during the six months ended June 30, 2022 and 2021 (Unaudited) and the years ended December 31,
2021, 2020 and 2019, respectively. |
• | Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities. |
• | Cash
flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $100.3 million, $81.4 million, $223.3 million, $232.9 million and $322.6 million during the six months ended June 30, 2022 and 2021 (Unaudited) and the years ended December 31, 2021, 2020, and 2019, respectively. |
• | Capital contributions from Parent were $230.8 million, $140.3 million, $520.4 million, $267.3 million, and $435.6 million, during the six months ended June 30, 2022 and 2021
(Unaudited) and the years ended December 31, 2021, 2020, and 2019, respectively. |
• | Proceeds from the sale of aviation equipment were $138.0 million, $57.2 million, $158.9 million, $72.2 million and $248.5 million during the six months ended June 30, 2022 and 2021 (Unaudited) and the years ended December 31, 2021, 2020, and 2019, respectively. |
| | (Unaudited) Six
Months Ended June 30, | ||||
(in thousands) | | | 2022 | | | 2021 |
Cash
flow data: | | | | | ||
Net
cash provided by operating activities | | | $75,329 | | | $63,881 |
Net
cash (used in) investing activities | | | (186,181) | | | (120,063) |
Net
cash provided by financing activities | | | 151,375 | | | 56,284 |
| | Year
Ended December 31, | |||||||
(in thousands) | | | 2021 | | | 2020 | | | 2019 |
Cash
flow data: | | | | | | | |||
Net
cash provided by operating activities | | | $184,412 | | | $186,218 | | | $252,060 |
Net
cash (used in) investing activities | | | (444,533) | | | (237,926) | | | (328,289) |
Net
cash provided by financing activities | | | 260,891 | | | 44,834 | | | 83,361 |
| | (Unaudited) Six
Months Ended June 30, | ||||
(in thousands) | | | 2022 | | | 2021 |
Net
cash provided by operating activities | | | $75,329 | | | $63,881 |
Add:
Principal collections on finance leases | | | 575 | | | 1,269 |
Add:
Proceeds from sale of assets | | | 138,020 | | | 57,155 |
Exclude:
Changes in working capital | | | 52,987 | | | 43,898 |
Funds
Available for Distribution (FAD) | | | $266,911 | | | $166,203 |
| | Year
Ended December 31, | |||||||
(in thousands) | | | 2021 | | | 2020 | | | 2019 |
Net
cash provided by operating activities | | | $184,412 | | | $186,218 | | | $252,060 |
Add:
Principal collections on finance leases | | | 7,387 | | | 13,823 | | | 4,709 |
Add:
Proceeds from sale of assets | | | 158,927 | | | 72,175 | | | 248,454 |
Exclude:
Changes in working capital | | | 55,705 | | | 71,621 | | | 35,658 |
Funds
Available for Distribution (FAD) | | | $406,431 | | | $343,837 | | | $540,881 |
• | FAD does not include equity capital called from our existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash equivalents and expected investments in our operations. |
• | FAD
does not give pro forma effect to prior acquisitions, certain of which cannot be quantified. |
• | While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as we rely on alternative sources of liquidity to fund such purchases. |
• | FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as we have multiple sources of liquidity and intend to fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity. |
• | FAD
does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments. |
• | FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences, which are not meaningful to our distribution decisions. |
• | Management has significant discretion to make distributions, and we are not bound by any contractual provision that requires us to use cash for distributions. |
Asset | | | Range
of Estimated Useful Lives | | | Residual Value Estimates |
Aircraft | | | 25 years
from date of manufacture | | | Generally not to exceed 15% of manufacturer’s list price when new |
Aircraft engines | | | 2
- 6 years, based on maintenance adjusted service life | | | Sum of engine core salvage value plus the estimated fair value of life limited parts |
Aviation tooling and equipment | | | 3
- 6 years from date of purchase | | | Scrap value at end of useful life |
Furniture and fixtures | | | 3
- 6 years from date of purchase | | | None |
Name | | | Age | | | Position |
| | 65 | | | Chief Executive Officer and Chairman of the Board
of Directors | |
| | 40 | | | Chief
Financial Officer and Chief Accounting Officer | |
Paul R. Goodwin | | | 79 | | | Director |
Judith
A. Hannaway | | | 70 | | | Director |
A.
Andrew Levison | | | 66 | | | Director |
Kenneth
J. Nicholson | | | 51 | | | Director |
Ray
M. Robinson | | | 74 | | | Director |
Martin
Tuchman | | | 81 | | | Director |
(a) | within the preceding three years: (i) the director was employed by the Company; (ii) an immediate family member of the director was employed by the Company as an executive officer; (iii) the director or an immediate family member of the director received more than $120,000 per year in direct compensation from the Company
(other than director or committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent on continued service)); (iv) the director was employed by or affiliated with the independent registered public accounting firm of the Company; (v) an immediate family member of the director was employed by the independent registered public accounting firm of the Company as a partner, principal or manager; or (vi) an executive officer of the Company was on the compensation committee of a company which employed the director, or which employed an immediate family member of the director as an executive officer; or |
(b) | he
or she is an executive officer of another company that does business with the Company and the annual sales to, or purchases from, the Company is the greater of $1 million, or two percent of such other company’s consolidated gross annual revenues. |
• | Having a majority of the board be considered independent. |
• | At each regularly scheduled board meeting, all independent directors will typically be scheduled to meet in an executive session without the presence of any management directors. |
• | providing assistance to the board in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the Company and its subsidiaries; |
• | assisting the board’s oversight of the integrity of the Company’s financial statements; |
• | assisting the board’s oversight of the Company’s compliance with legal and regulatory requirement; |
• | assisting
the board’s oversight of the Company’s independent registered public accounting firm’s qualifications and independence; and |
• | assisting the board’s oversight of the performance of the Company’s independent registered public accounting firm and the Company’s internal audit function. |
• | administering and approving the grant of awards under any incentive compensation plan, including any equity-based plan, of the Company; and |
• | making recommendations to the Company board of directors regarding director compensation. |
• | Base Salary — Our Manager paid each
of Mr. Christopher and Ms. Nam a base salary of $200,000 in 2021 to assist each with paying basic living expenses during the calendar year; |
• | Bonus — Our Manager paid Mr. Christopher a discretionary bonus of $700,000 and Ms. Nam a discretionary bonus of $575,000 in early 2022 based on its subjective review of their respective performances in 2021; and |
• | Other Compensation — Our Manager also provides Mr. Christopher and Ms. Nam with 401(k) matching contributions and company-paid life insurance premiums, which our Manager believes are reasonable, competitive and consistent with our Manager’s overall executive compensation objectives to reward and retain talented and experienced individuals. |
Name and Principal Position | | | Year | | | Salary
($) | | | Bonus ($) | | | Stock
Awards ($) | | | All Other Compensation ($) | | | Total
($) |
Scott Christopher, Chief Financial Officer(1) | | |||||||||||||||||
| 2021 | | | 200,000 | | | 700,000 | | | | | 9,168(3) | | | 909,168 | |||
| 2020 | | | 200,000 | | | 700,000 | | | | | 8,868 | | | 908,868 | |||
| | 2019 | | | 200,000 | | | 700,000 | | | | | 8,796 | | | 908,796 | ||
Chief Accounting Officer(2) | | | 2021 | | | 200,000 | | | 575,000 | | | | | 9,096(4) | | | 784,096 | |
| 2020 | | | 200,000 | | | 455,000 | | | | | 8,868 | | | 663,868 |
(1) | On August 1, 2022, in connection with the spin-off of FTAI Infrastructure, Mr. Christopher resigned as our Chief Financial Officer. |
(2) | On August 1, 2022, in connection with the spin-off of FTAI Infrastructure, Ms. Nam was appointed as our Chief Financial Officer. Ms. Nam also retained her position as our Chief Accounting Officer. |
(3) | This amount consists of (i) $8,700 of 401(k) matching contributions made by the Manager and
(ii) $468 of life insurance premiums paid by our Manager. |
(4) | This amount consists of (i) $8,700 of 401(k) matching contributions made by the Manager and (ii) $396 of life insurance premiums paid by our Manager. |
Name | | | Number
of Securities Underlying Exercisable Options (#) | | | Number of Securities Underlying Not-Yet Exercisable
Options (#)(1) | | | Option Exercise Price ($)(2) | | | Option
Expiration Date(3) |
| | — | | | 225 | | | 12.72 | | | 7/6/2030 | |
| | — | | | 75 | | | 12.71 | | | 7/7/2030 | |
| | — | | | 71 | | | 12.94 | | | 7/8/2030 | |
| | — | | | 71 | | | 12.94 | | | 7/13/2030 | |
| | — | | | 69 | | | 13.27 | | | 7/14/2030 | |
| | — | | | 950 | | | 14.75 | | | 7/29/2030 | |
| | — | | | 68 | | | 14.49 | | | 7/30/2030 | |
| | — | | | 198 | | | 14.86 | | | 7/31/2030 | |
| | — | | | 63 | | | 15.10 | | | 8/4/2030 | |
| | — | | | 195 | | | 14.89 | | | 8/5/2030 | |
| | — | | | 259 | | | 15.00 | | | 8/6/2030 | |
| | — | | | 248 | | | 15.72 | | | 8/7/2030 | |
| | — | | | 696 | | | 16.83 | | | 8/10/2030 | |
| | — | | | 870 | | | 16.90 | | | 8/11/2030 | |
| | — | | | 816 | | | 16.93 | | | 8/12/2030 | |
| | — | | | 358 | | | 16.95 | | | 8/13/2030 | |
| | — | | | 178 | | | 17.06 | | | 8/14/2030 | |
| | — | | | 298 | | | 16.98 | | | 8/17/2030 | |
| | — | | | 176 | | | 17.27 | | | 8/18/2030 | |
| | — | | | 364 | | | 16.77 | | | 8/19/2030 | |
| | — | | | 369 | | | 16.63 | | | 8/20/2030 | |
| | — | | | 183 | | | 16.72 | | | 8/21/2030 | |
| | — | | | 117 | | | 16.59 | | | 8/25/2030 | |
| | — | | | 230 | | | 16.92 | | | 8/26/2030 | |
| | — | | | 941 | | | 16.62 | | | 8/27/2030 | |
| | — | | | 548 | | | 16.10 | | | 8/28/2030 | |
| | — | | | 181 | | | 16.04 | | | 8/31/2030 | |
| | — | | | 4,182 | | | 16.03 | | | 9/1/2030 | |
| | — | | | 57,538 | | | 14.99 | | | 9/12/2029 | |
| | — | | | 68,698 | | | 16.74 | | | 11/27/2029 |
(1) | Upon the grant of options to our Manager (or an affiliate), such options are fully vested and become exercisable over a 30-month period (the “Total Exercisability Period”) in monthly installments beginning on the first of each month following the month in which the options were granted. When Tandem Options are granted, the Manager options become exercisable in monthly installments over a portion of the Total Exercisability Period equal to 30 months, minus the product of (i) the ratio of Manager options not subject to corresponding Tandem Options to the total number of Manager options (including Manager options subject to corresponding Tandem Options) multiplied by (ii) 30 (such period, the “Manager Exercisability Period”). Following the Manager Exercisability Period, the Tandem Options vest in generally monthly
installments over the remainder of the Total Exercisability Period and become exercisable only at the end of the Total Exercisability Period. The options shown in this table do not include any Tandem Options that may have been granted after December 31, 2021. |
(2) | Represents the option exercise prices as of December 31, 2021. The option exercises prices shown in this table do not reflect the equitable adjustment to the option exercise prices made in connection with the spin-off of FTAI Infrastructure on August 1, 2022. |
(3) | Represents
the expiration date of the option held by our Manager (or an affiliate) that is the basis for the Tandem Options held by the officer. In general, the expiration date of the Tandem Options occurs prior to the expiration date of the underlying Manager options. |
Name | | | Fees
Earned or Paid in Cash | | | Share Awards | | | Option
Awards(3) | | | Total |
Paul R. Goodwin(1) | | | — | | | $160,000 | | | — | | | $160,000 |
Judith
A. Hannaway | | | $150,000 | | | — | | | — | | | $150,000 |
A.
Andrew Levison(2) | | | $75,000 | | | $75,000 | | | — | | | $150,000 |
Ray
M. Robinson(1) | | | — | | | $150,000 | | | — | | | $150,000 |
Martin
Tuchman(1) | | | — | | | $150,000 | | | — | | | $150,000 |
(1) | In 2021, Messrs. Goodwin, Robinson and Tuchman elected to receive all of their compensation for services as a director in the form of Common Shares in lieu of cash. |
(2) | In 2021, Mr. Levison elected to receive $75,000 of the compensation for his services as a director in the form of Common Shares in lieu of cash. |
(3) | As of December 31, 2021, each of our non-employee directors held a fully vested option to purchase 5,000 Common Shares. |
• | each person known by us to be the beneficial owner of more than five percent of FTAI’s outstanding common shares; |
• | each of FTAI’s current directors and named executive officers; and |
• | all of FTAI’s current directors and executive officers as a group. |
(i) | voting power, which includes the power to vote, or to direct the voting of, common shares of FTAI; and/or |
(ii) | investment power, which includes the power to dispose of, or to direct the disposition of, common shares of FTAI. |
Name and Address of Beneficial Owner(1) | | | Amount
and Nature of Beneficial Ownership | | | Percent of Class(2) |
The
Washington State Investment Board(3) | | | 11,785,779 | | | 11.5% |
Morgan
Stanley(4) | | | 6,613,174 | | | 6.5% |
The
Goldman Sachs Group, Inc.(5) | | | 6,169,408 | | | 6.0% |
Bank
of America Corporation(6) | | | 4,341,506 | | | 4.3% |
Fortress
Investment Group LLC and certain affiliates(7) | | | 3,320,376 | | | 3.2% |
Paul
R. Goodwin(8) | | | 108,296 | | | * |
Judith
A. Hannaway(8) | | | 5,000 | | | * |
A.
Andrew Levison(8) | | | 7,597 | | | * |
Kenneth
J. Nicholson(8) | | | 210,506 | | | * |
Ray
M. Robinson(8) | | | 46,697 | | | * |
Martin
Tuchman(8) | | | 636,791 | | | * |
| | 328,852 | | | * | |
Scott
Christopher(8)(9) | | | 10,300 | | | * |
| | 2,500 | | | * | |
All
directors, nominees and executive officers as a group (9 persons) | | | 1,356,539 | | | 1.3% |
* | Denotes less than 1%. |
(1) |
(2) | Percentages shown assume
the exercise by such persons of all options to acquire Common Shares that are exercisable within 60 days of September 1, 2022, and no exercise by any other person. |
(3) | Sole voting and dispositive power in respect of 11,785,779 shares, based on a Schedule 13G/A filed with the SEC on April 29, 2020. The Washington State Investment Board’s address is 2100 Evergreen Park Drive SW, P.O. Box 40916, Olympia, WA 98504. |
(4) | Shared
voting power in respect of 6,501,629 shares; shared dispositive power in respect of 6,615,390 shares, as stated in a Schedule 13G/A filed with the SEC on February 10, 2022. Morgan Stanley’s address is 1585 Broadway, New York, NY 10036. |
(5) | Shared voting and dispositive power in respect of 5,956,245 shares, as stated in a Schedule 13G filed with the SEC on February 4, 2022. The Goldman Sachs Group, Inc.’s address is 200 West Street, New
York, NY 10282. |
(6) | Shared voting power in respect of 4,878,655 shares; shared dispositive power in respect of 5,044,918 shares, as stated in a Schedule 13G filed with the SEC on January 28, 2022. Bank of America Corporation’s address is 100 N Tryon St, Charlotte, NC 28255. |
(7) | Includes
748,644 shares held by Principal Holdings I LP and 2,515,588 options held by the Manager that are exercisable within 60 days of September 1, 2022. |
(8) | Includes with respect to each of these individuals the following number of shares issuable upon the exercise of options that are currently exercisable or exercisable within 60 days of September 1, 2022: Goodwin - 5,000; Hannaway - 5,000; Levison - 5,000; Nicholson - 126,236; Robinson - 5,000; Tuchman - 5,000; Adams - 126,236; Christopher - 0 and Nam - 0. |
(9) | On August 1, 2022,
in connection with the spin-off of FTAI Infrastructure, Mr. Christopher resigned as our Chief Financial Officer. |
• | each person known by us to be the beneficial owner of more than five percent of the Company’s outstanding ordinary shares; |
• | each of the Company’s current directors and named executive officers; and |
• | all of the
Company’s current directors and executive officers as a group. |
Name and Address of Beneficial Owner(1) | | | Amount and Nature of Beneficial
Ownership | | | Percent of Class |
Fortress Worldwide Transportation and Infrastructure General Partnership(2) | | | 99,378,771
| | | 100% |
| | 0 | | | 0% | |
| | 0 | | | 0% | |
All
directors and executive officers as a group (2 persons) | | | 0 | | | 0% |
(1) |
(2) | The ordinary shares currently held by Fortress Worldwide Transportation and Infrastructure General Partnership will, by virtue of the Holdco Merger and the merger, subsequently be held by FTAI’s public
shareholders and the Master GP following the consummation of the Holdco Merger and the merger. |
• | each
person expected by us to be the beneficial owner of more than five percent of the Company’s outstanding ordinary shares following consummation of the merger; |
• | each person who will become a director or named executive officer of the Company upon consummation of the merger; and |
• | all of the Company’s directors and executive officers as a group after the consummation of the merger. |
Name
and Address of Beneficial Owner(1) | | | Amount and Nature of Beneficial Ownership | | | Percent
of Class(2) |
The Washington State Investment Board(3) | | | 11,785,779 | | | 11.5% |
Morgan
Stanley(4) | | | 6,613,174 | | | 6.5% |
The
Goldman Sachs Group, Inc.(5) | | | 6,169,408 | | | 6.0% |
Bank
of America Corporation(6) | | | 4,341,506 | | | 4.3% |
Fortress
Investment Group LLC and certain affiliates(7) | | | 3,320,376 | | | 3.2% |
Paul
R. Goodwin(8) | | | 108,296 | | | * |
Judith
A. Hannaway(8) | | | 5,000 | | | * |
A.
Andrew Levison(8) | | | 7,597 | | | * |
Kenneth
J. Nicholson(8) | | | 210,506 | | | * |
Ray
M. Robinson(8) | | | 46,697 | | | * |
Martin
Tuchman(8) | | | 636,791 | | | * |
| | 328,852 | | | * | |
Scott
Christopher(8)(9) | | | 10,300 | | | * |
| | 2,500 | | | * | |
All
directors, nominees and executive officers as a group (9 persons) | | | 1,356,539 | | | 1.3% |
* | Denotes less than 1%. |
(1) |
(2) | Percentages shown assume
the exercise by such persons of all options to acquire Common Shares that are exercisable within 60 days of September 1, 2022, and no exercise by any other person. |
(3) | Sole voting and dispositive power in respect of 11,785,779 shares, based on a Schedule 13G/A filed with the SEC on April 29, 2020. The Washington State Investment Board’s address is 2100 Evergreen Park Drive SW, P.O. Box 40916, Olympia, WA 98504. |
(4) | Shared
voting power in respect of 6,501,629 shares; shared dispositive power in respect of 6,615,390 shares, as stated in a Schedule 13G/A filed with the SEC on February 10, 2022. Morgan Stanley’s address is 1585 Broadway, New York, NY 10036. |
(5) | Shared voting and dispositive power in respect of 5,956,245 shares, as stated in a Schedule 13G filed with the SEC on February 4, 2022. The Goldman Sachs Group, Inc.’s address is 200 West Street, New
York, NY 10282. |
(6) | Shared voting power in respect of 4,878,655 shares; shared dispositive power in respect of 5,044,918 shares, as stated in a Schedule 13G filed with the SEC on January 28, 2022. Bank of America Corporation’s address is 100 N Tryon St, Charlotte, NC 28255. |
(7) | Includes
748,644 shares held by Principal Holdings I LP and 2,571,732 options held by the Manager that are exercisable within 60 days of September 1, 2022. Does not include 8,746 shares the Master GP will receive in connection with the Holdco Merger, which will represent 0.01% of the outstanding ordinary shares of the Company. |
(8) | Includes with respect to each of these individuals the following number of shares issuable upon the exercise of options that are currently exercisable or exercisable within 60 days of September 1, 2022: Goodwin - 5,000; Hannaway - 5,000; Levison - 5,000; Nicholson - 126,236; Robinson - 5,000; Tuchman - 5,000; Adams
- 126,236; and Nam - 0. |
(9) | On August 1, 2022, in connection with the spin-off of FTAI Infrastructure, Mr. Christopher resigned as our Chief Financial Officer. |
• | 2,000,000,000 ordinary shares, par value $0.01 per share (“ordinary shares”); and |
• | 200,000,000
preferred shares, par value $0.01 per share (“preferred shares”), 4,180,000 of which are designated as Series A Preferred Shares, 4,940,000 of which are designated as Series B Preferred Shares and 4,200,000 of which are designated as Series C Preferred Shares. |
(i) | If
no offered rate is displayed on Bloomberg on page BBAM1 (or any successor or replacement page) on the relevant distribution determination date at approximately 11:00 a.m., London time, then the calculation agent, in consultation with us, will select four major banks in the London interbank market and will request each of their principal London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time. If at least two quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(ii) | Otherwise, the calculation agent in consultation with us will select three major
banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the distribution determination date for loans in U.S. dollars to leading European banks for a three month period for the applicable Distribution Period in an amount of at least $1,000,000. If three quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(iii) | Otherwise, Three-Month LIBOR for the next Distribution Period will be equal to Three-Month LIBOR in effect for the then-current Distribution Period or, in the case of the first Distribution Period in the Series A Floating Rate Period, the most recent three-month LIBOR rate on which Three-Month LIBOR could have
been determined in accordance with the first sentence of this paragraph had the distribution rate been a floating rate during the Series A Fixed Rate Period. |
(a) | If the calculation agent determines on the relevant distribution determination date that LIBOR has been discontinued or is no longer viewed as an acceptable benchmark for securities like
the Company Series A Preferred Shares (a “Series A LIBOR Event”), then the calculation agent will use a substitute or successor base rate that it has determined, in consultation with us, is the most comparable to LIBOR; provided that if the calculation agent determines there is an industry-accepted substitute or successor base rate, then the calculation agent shall use such substitute or successor base rate. |
(b) | If the calculation agent has determined a substitute or successor base rate in accordance with the foregoing, the calculation agent, in consultation with us, may determine what business day convention to use, the definition of business day, the distribution determination date to be used and any
other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to LIBOR, or any adjustment to the applicable spread thereon, in a manner that is consistent with industry-accepted practices for such substitute or successor base rate. |
(1) | no distribution will be declared and paid or set aside for payment on any Junior Securities (as defined below) (other than a distribution payable solely in shares of Junior Securities); |
(2) | no
shares of Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities pursuant to a binding agreement existing prior to the original issue date of the Company Series A Preferred Shares, being the date of completion of the merger), nor will any monies be paid to or made available
for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(3) | no shares of Parity Securities will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or exchange all, or a pro rata portion of Company Series A Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for
or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
(1) | any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders (as defined below), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares representing more than 50.0% of the voting power of the Company’s Voting Equity Interests (as defined below); or |
(2) | (a) all or substantially all the assets of the
Company and the Restricted Subsidiaries, taken as a whole, are sold or otherwise transferred to any person other than a Wholly-Owned Restricted Subsidiary (as defined below) or one or more Permitted Holders or (b) the Company consolidates, amalgamates or merges with |
• | the redemption date; |
• | the redemption price; |
• | if fewer than all Company Series A Preferred Shares are to be redeemed, the number of Company Series A Preferred Shares to be redeemed; and |
• | the
manner in which holders of Company Series A Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
• | any increase in the amount of authorized ordinary shares or authorized preferred shares, or any increase or decrease in the number
of shares of any series of preferred stock, or the authorization, creation and issuance of other classes or series of share capital, in each case ranking on parity with or junior to the Company Series A Preferred Shares as to distributions or distribution of assets upon our liquidation, dissolution or winding up; |
• | a merger or consolidation of us with or into another entity in which the Company Series A Preferred Shares remain outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
• | a
merger or consolidation of us with or into another entity in which the Company Series A Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Company Series A Preferred Shares. |
(i) | If
no offered rate is displayed on Bloomberg on page BBAM1 (or any successor or replacement page) on the relevant distribution determination date at approximately 11:00 a.m., London time, then the calculation agent, in consultation with us, will select four major banks in the London interbank market and will request each of their principal London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time. If at least two quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(ii) | Otherwise, the calculation agent in consultation with us will select three major
banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the distribution determination date for loans in U.S. dollars to leading European banks for a three month period for the applicable Distribution Period in an amount of at least $1,000,000. If three quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(iii) | Otherwise, Three-Month LIBOR for the next Distribution Period will be equal to Three-Month LIBOR in effect for the then-current Distribution Period or, in the case of the first Distribution Period in the Series B Floating Rate Period, the most recent three-month LIBOR rate on which Three-Month LIBOR could have
been determined in accordance with the first sentence of this paragraph had the distribution rate been a floating rate during the Series B Fixed Rate Period. |
(a) | If the calculation agent determines on the relevant distribution determination date that LIBOR has been discontinued or is no longer viewed as an acceptable benchmark for securities
like the Company Series B Preferred Shares (a “Series B LIBOR Event”), then the calculation agent will use a substitute or successor base rate that it has determined, in consultation with us, is the most comparable to LIBOR; provided that if the calculation agent determines there is an industry-accepted substitute or successor base rate, then the calculation agent shall use such substitute or successor base rate. |
(b) | If the calculation agent has determined a substitute or successor base rate in accordance with the foregoing, the calculation agent, in consultation with us, may determine what business day convention to use, the definition of business day, the distribution determination date to be used and
any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to LIBOR, or any adjustment to the applicable spread thereon, in a manner that is consistent with industry-accepted practices for such substitute or successor base rate. |
(1) | no distribution will be declared and paid or set aside for payment on any Junior Securities (as defined below) (other than a distribution payable solely in shares of Junior Securities); |
(2) | no shares of Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion
into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities pursuant to a binding agreement existing prior to the original issue date of the Company Series B Preferred Shares, being the date of completion of the merger), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(3) | no shares of Parity Securities
will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or exchange all, or a pro rata portion of Company Series B Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
• | the redemption date; |
• | the
redemption price; |
• | if fewer than all Company Series B Preferred Shares are to be redeemed, the number of Company Series B Preferred Shares to be redeemed; and |
• | the manner in which holders of Company Series B Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
• | any increase in the amount of authorized ordinary shares or authorized preferred shares, or any increase or decrease in the number of shares of any series of preferred stock, or the authorization, creation and issuance of other classes or series of share capital, in each case ranking on parity with or junior to the Company Series B Preferred Shares as to distributions or distribution of assets upon our liquidation, dissolution or winding up; |
• | a merger or consolidation of us with or into another entity in which the
Company Series B Preferred Shares remain outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
• | a merger or consolidation of us with or into another entity in which the Company Series B Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Company Series B Preferred Shares. |
(i) | The average of the yields to maturity on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release designated H.15 Daily Update or any successor publication which is published by the Federal Reserve Board, as determined by the calculation agent in its sole discretion; or |
(ii) | If
no calculation is provided as described in clause (i), then the calculation agent, after consulting such sources as it deems comparable to any of the foregoing calculations, or any such source as it deems reasonable from which to estimate the Five-Year Treasury Rate, shall determine the Five-Year Treasury Rate in its sole discretion, provided that if the calculation agent determines there is an industry-accepted successor Five-Year Treasury Rate, then the Calculation Agent shall use such successor rate. If the calculation agent has determined a substitute or successor rate in accordance with the foregoing, the calculation agent, in its sole discretion, may determine the “business day” convention, the definition of “business day” and the Reset Distribution Determination Date to be used and any other relevant methodology for calculating such substitute or successor rate, including any adjustment factor needed to make such substitute or successor rate comparable
to the rate described in clause (i), in a manner that is consistent with industry-accepted practices for such substitute or successor rate. |
(1) | no distribution will be declared and paid or set aside for payment on any Junior Securities (as defined below) (other than a distribution payable solely in shares of Junior Securities); |
(2) | no shares of Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion
into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities pursuant to a binding agreement existing prior to the original issue date of the Company Series C Preferred Shares, being the date of completion of the merger), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(3) | no shares of Parity Securities
will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or exchange all, or a pro rata portion of Company Series C Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
• | the redemption date; |
• | the redemption price; |
• | if fewer than all Company Series C Preferred Shares
are to be redeemed, the number of Company Series C Preferred Shares to be redeemed; and |
• | the manner in which holders of Company Series C Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
• | any increase in the amount
of authorized ordinary shares or authorized preferred shares, or any increase or decrease in the number of shares of any series of preferred stock, or the authorization, creation and issuance of other classes or series of share capital, in each case ranking on parity with or junior to the Company Series C Preferred Shares as to distributions or distribution of assets upon our liquidation, dissolution or winding up; |
• | a merger or consolidation of us with or into another entity in which the Company Series C Preferred Shares remain outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
• | a
merger or consolidation of us with or into another entity in which the Company Series C Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Company Series C Preferred Shares. |
• | Fortress and its respective affiliates, including the Manager and Master GP, have the right to, and have no duty to abstain from, exercising such right to, engage or invest in the same or similar business as us, do business with any of our clients, customers or vendors or employ or otherwise engage any of our officers, directors or employees; |
• | if Fortress and its respective affiliates, including the Manager and Master GP, or any of their officers, directors or employees
acquire knowledge of a potential transaction that could be a corporate opportunity, it has no duty to offer such corporate opportunity to us, our shareholders or affiliates; |
• | we have renounced any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities; and |
• | an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies of the Cayman Islands; |
• | an
exempted company’s register of members is not open to inspection; |
• | an exempted company does not have to hold an annual general meeting; |
• | an exempted company may issue no par value shares; |
• | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | an exempted company may
register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | an exempted company may register as a limited duration company; and |
• | an exempted company may register as a segregated portfolio company. |
| | Equity
Compensation Plan Information | |||||||
Plan category | | | Number of securities to be issued upon exercise
of outstanding options, warrants, and rights | | | Weighted-average exercise price of outstanding options,
warrants, and rights | | | Number of securities remaining available for future issuance under equity
compensation plans(1) |
Equity compensation plans approved by security holders | | | 3,762,742 | | | $21.02(2) | | | 29,837,754 |
Equity
compensation plans not approved by security holders | | | — | | | — | | | —
|
Total | | | 3,762,742 | | | | | 29,837,754 |
(1) | Excludes 25,000 shares options and 137,246 ordinary shares issued to directors as compensation |
(2) | The weighted-average exercise price shown in this table does not reflect the equitable adjustment to the option exercise prices made in connection with the spin-off of FTAI Infrastructure on August 1, 2022. |
| | FTAI | | | Company | |
Authorized
and Outstanding Capital Share | | | FTAI’s authorized and outstanding shares include two classes of shares: the common shares and the Preferred Shares. The Board of Directors further designated three series of the Preferred Shares (the Series A Preferred Shares, the Series B Preferred Shares and the Series C Preferred Shares). FTAI is authorized to issue up to 2,000,000,000 common shares and up to 200,000,000 Preferred Shares. | | | The
Company has an authorized share capital of US $22,000,000 divided into 2,000,000,000 Ordinary Shares of a par value US $0.01 each and 200,000,000 Preferred Shares of a par value of US $0.01, each of which Preferred Shares have been designated as 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares of par value US $0.01, 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares of par value US $0.01, and 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares of par value US $0.01, in accordance with the Articles. |
| | | | |||
Meetings
of Shareholders | | | Special meetings of the FTAI shareholders may be called at any time by either (i) the Chairman of the Board, if there be one, or (ii) the Chief Executive Officer, if there be one, and shall be called by any such officer at the request in writing of (i) the Board of Directors (including a majority thereof) or (ii) a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers include the authority to call such | | | Extraordinary
general meetings of the Company’s shareholders may be called at any time by the Directors, the Chief Executive Officer, the Chairperson or the committee of the board of Directors that has been duly designated by the Directors and delegated such powers, and shall be called by any of them as requested the holders of Company Preferred Shares in accordance with the rights attaching to such shares. No Company shareholders or group |
| | FTAI | | | Company | |
| | meetings.
No FTAI shareholders or group of FTAI shareholders, acting in its or their capacity as FTAI shareholders, shall have the right to call a special meeting of the FTAI shareholders, subject to certain rights of holders of Company Preferred Shares attaching to such shares. | | | of Company shareholders, acting in its or their capacity as Company shareholders, shall have the right to call a general meeting of the Company shareholders. | |
| | | | |||
Voting | | | Only
those record holders of all issued and outstanding FTAI common shares on the applicable record date shall be entitled to notice of, and to vote at, a meeting of FTAI shareholders or to act with respect to matters as to which the holders of all issued and outstanding FTAI common shares have the right to vote or to act. | | | Only those record holders of issued and outstanding shares entitled to vote on the applicable record date shall be entitled to notice of, and to vote at, a meeting of Company shareholders or to act with respect to matters as to which the holders of the issued and
outstanding shares entitled to vote have the right to vote or to act. |
| | | | |||
| | All
matters (other than the election of Directors) submitted to holders of FTAI common shares for approval shall be determined by a majority of the votes cast affirmatively or negatively by the holders of all issued and outstanding FTAI shares entitled to vote, unless a greater percentage is required with respect to such matter under the Delaware Act, under the rules of any National Securities Exchange on which the common and preferred shares are listed for trading or under the FTAI LLC Agreement, in which case the approval of the holders of all issued and outstanding FTAI common shares that in the aggregate represent at least such greater percentage shall be required. | | | All
matters (other than the election of directors) submitted to Company shareholders for approval shall be determined by the vote of holders of a simple majority of the issued and outstanding voting shares who, being present in person or represented by proxy and entitled to vote at the applicable general meeting, vote at such general meeting, unless a greater percentage is required with respect to such matter under the Articles, the Cayman Companies Act or under the rules of any National Securities Exchange on which the ordinary and preferred shares are listed for trading, in which case the matter shall be determined by the vote of holders that in the aggregate represent at least such greater percentage of the issued and outstanding voting shares who, being present in person or represented by proxy and entitled to vote at the applicable general meeting, vote at such general meeting. | |
| | | |
| | FTAI | | | Company | |
Action
by Written Consent | | | FTAI’s LLC Agreement permits action by unanimous written consent by directors, as set out therein. The FTAI LLC Agreement provides that FTAI shareholders may not act by written consent. | | | The
directors of the Company may act by unanimous written consent. The Articles provide that members may not act by written consent. |
| | | | |||
Quorum | | | At
any meeting of the holders of FTAI common shares, the holders of a majority of the issued and outstanding shares entitled to vote of the class or classes or series for which a meeting has been called represented in person or by proxy shall constitute a quorum of such class or classes or series unless any such action by the holders of FTAI common shares requires approval by holders of a greater percentage of the issued and outstanding shares entitled to vote, in which case the quorum shall be such greater percentage. The submission of matters to FTAI shareholders for approval and the election of directors shall occur only at a meeting of the FTAI shareholders duly called at which a quorum is present. | | | At
any meeting of the holders of voting shares of the Company, the holders of a majority of such voting shares present in person or by proxy shall be a quorum. The submission of matters to Company shareholders for approval and the election of directors shall occur only at a meeting of the Company shareholders duly called at which a quorum is present. At any meeting of a separate class of shares of the Company, the necessary
quorum shall be one person holding or representing by proxy at least two-thirds of the issued shares of such the relevant class. |
| | | | |||
Notice
of Meetings | | | Notice, stating the place, day and hour of any annual or special meeting of the FTAI shareholders, as determined by the Board of Directors, and (i) in the case of a special meeting of the FTAI shareholders, the purpose or purposes for which the meeting is called, as determined by the Board of Directors or (ii) in the case of an annual meeting, those matters that the Board of Directors, at the time of giving the notice, intends to present for action by the FTAI shareholders, shall be delivered by FTAI not less than 10 calendar days nor more than 60 calendar days before
the date of the meeting to each record holder who is entitled to vote at such meeting. | | | Notice, stating the place, day and hour of any annual or special meeting of the Company shareholders, as determined by the Board of Directors, and (i) in the case of a special meeting of the Company shareholders, the purpose or purposes for which the meeting is called, as determined by the Board of Directors or (ii) in
the case of an annual meeting, those matters that the Board of Directors, at the time of giving the notice, intends to present for action by the Company shareholders, shall be delivered by the Company not less than 10 clear calendar days nor more than 60 clear calendar days before the date of the meeting to each record holder who is entitled to vote at such meeting. |
| | | |
| | FTAI | | | Company | |
Advance
Notice Provisions | | | FTAI shareholders may submit nominations of persons for election to the Board of Directors and business to be considered by the FTAI shareholders at an annual meeting of holders of FTAI common shares. A FTAI shareholder’s notice of such proposal shall be delivered to the secretary of FTAI not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary of the date of the immediately preceding annual meeting of FTAI shareholders. | | | Company
shareholders may submit nominations of persons for election to the Board of Directors and business to be considered by the Company shareholders at an annual general meeting. A Company shareholder’s notice of such proposal shall be delivered to the Secretary of the Company not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary of the date of the immediately preceding annual general meeting of Company shareholders. |
| | | | |||
| | However,
the chairman of any meeting of FTAI shareholders shall have the power and duty to determine all matters relating to the conduct of the meeting, including whether any nomination or item of business has been properly brought before the meeting. | | | However, the directors may adopt such rules and regulations for the conduct of any meeting and except to the extent inconsistent with such rules and regulations, the chairperson of any general meeting shall have the power and duty to determine all matters relating to the conduct of the meeting, including whether any nomination or item of
business has been properly brought before the meeting. | |
| | | | |||
Charter
Amendments | | | Amendments to FTAI’s LLC Agreement may be proposed only by or with the consent of the Board of Directors. If the Board of Directors desires to amend any provision of the LLC Agreement, then it shall first adopt a resolution setting forth the amendment proposed, declaring its advisability, and then (i) call a special meeting of the FTAI shareholders entitled to vote for the consideration of such amendment, (ii) direct that the amendment proposed be considered by the FTAI shareholders entitled to vote at the next annual meeting of the FTAI shareholders or (iii) seek the
written consent of the FTAI shareholders entitled to vote. | | | The Articles may only be amended by a special resolution of the Company shareholders in general meeting, a special resolution requiring the affirmative vote of holders of at least two-thirds (2/3) of the issued shares who, being present in person or represented by proxy and entitled to vote at the applicable general meeting, vote at such general meeting. |
| | | | |||
| | A
proposed amendment shall be effective (i) if the holders of FTAI common shares are entitled to vote thereon, upon its approval by a | | |
| | FTAI | | | Company | |
| | majority
of the total votes that may be cast by holders of all issued and outstanding FTAI common shares, unless a greater percentage is required under FTAI’s LLC Agreement or by Delaware law, (ii) if the holder of any Preferred Shares are entitled to vote thereon, upon its approval by the requisite vote of the holders of such Preferred Shares or (iii) if the holders of FTAI common shares and the holders of any Preferred Shares are entitled to vote thereon, upon the approval of the holders of FTAI common shares and the holders of such Preferred Shares. | | | ||
| | | | |||
Size
of Board, Election of Directors | | | The number of directors shall not be fewer than three and no more than nine. The directors shall be divided into three classes, and each class shall consist of one-third of the total number of directors constituting the whole Board of Directors. | | | The
number of directors shall not be fewer than three and no more than nine. The directors shall be divided into three classes, and each class shall consist of one-third of the total number of directors constituting the whole Board of Directors. |
| | | | |||
| | Directors
are elected at the annual meeting for three (3)-year terms. Directors are elected by a plurality of the votes of holders of FTAI issued and outstanding shares entitled to vote present in person or represented by proxy and entitled to vote on the election of Directors at any annual or special meeting of FTAI shareholders. | | | Directors are elected at the annual meeting for three (3)-year terms. Directors are elected by a plurality of the votes of outstanding shares entitled to vote present in person or represented by proxy and entitled to vote on the election of directors at any annual
or special meeting of Company shareholders, as more particularly set out in the Articles. | |
| | | | |||
Removal
of Directors | | | A director or the whole Board of Directors may be removed, only for cause, by the affirmative vote of holders of at least eighty percent (80%) of the then issued and outstanding shares entitled to vote, given at an annual meeting or at a special meeting of FTAI shareholders issued and outstanding shares entitled to vote called for that purpose. | | | A
director or the whole Board of Directors may be removed, only for cause, by the affirmative vote of holders of at least eighty percent (80%) of the then issued and outstanding shares entitled to vote, given at an annual meeting or at a special meeting of Company shareholders holding outstanding shares entitled to vote called for that purpose. |
| | | |
| | FTAI | | | Company | |
Board
Vacancies and Newly Created Directorships | | | Any vacancy on the Board of Directors that results from newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office; provided that a quorum is present. Any other vacancies may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director or, solely in the event of the removal of the entire Board of Directors, by the affirmative vote of the holders of at least eighty percent (80%) of the
voting power of the then issued and outstanding shares entitled to vote. | | | Any vacancy on the Board of Directors that results from newly created directorships resulting from any increase in the authorized number of directors may be filled by the directors then in office. Any other vacancies may be filled by the directors then in office, though less than a quorum, or by a sole remaining director or, solely in the event of the removal of the entire Board of Directors, by the written consent of the holders of at least eighty percent (80%) of the voting power of the then issued
and outstanding shares entitled to vote. |
| | | | |||
Corporate
Opportunity | | | Except as the Fortress shareholders or their affiliates may otherwise agree in writing, no officer, director, or employee is under an obligation to present, communicate, or offer any corporate opportunity to the FTAI entities or their affiliates. | | | Except
as the Fortress Members and their Affiliates (each as defined in the Articles) may otherwise agree in writing with the FTAI Entities and their Affiliates (each as defined in the Articles), no officer, director, or employee is under an obligation to present, communicate, or offer any corporate opportunity to the FTAI Entities or their Affiliates. |
| | | | |||
Exclusive
Forum | | | Each person that holds FTAI common shares submits to the non-exclusive jurisdiction and venue of any Delaware state court or United States federal court sitting in Wilmington, Delaware. | | | The
Articles provide for submission to the exclusive jurisdiction of the courts of the Cayman Islands in connection with any claim or dispute arising out of or in connection with the constitutional documents of the Company or otherwise related in any way to each Company shareholder’s shareholding in the Company, other than any action or suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any claim for which the federal district courts of the United States of America are, as a matter of the laws of the United States, the sole and exclusive forum for determination of such a claim. |
| | FTAI | | | Company | |
| | Each
person that holds or has held a Series A Preferred Share, Series B Preferred Share or Series C Preferred Share and each person that holds or has held any beneficial interest in a Series A Preferred Share, Series B Preferred Share or Series C Preferred Share agrees that the federal district courts of the United States of America will be the exclusive forum for any cause of action asserted under United States federal securities laws. | | | ||
| | | | |||
| | However,
if a holder of Series A Preferred Shares, Series B Preferred Shares or Series C Preferred Shares may not waive his or her right to maintain a legal action or proceeding in the courts of Delaware because of matters relating to the internal affairs of FTAI, then the exclusive forum of United States district courts does not apply. | | | ||
| | | | |||
Limitation
of Liability | | | The FTAI LLC Agreement provides that, to the fullest extent permitted by the Delaware Act, no director will be personally liable to FTAI or the FTAI shareholders for monetary damages for breach of a fiduciary duty as a director. | | | The
Articles provide that any person who is or was a director or officer of the Company, any person who is or was serving at the request of the Company as an officer, director, member, manager, partner, tax matter partner, fiduciary or trustee of another person (including any subsidiary of the Company); provided, that a person shall not be an indemnified person by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services, and any person the directors designate as an “Indemnified Person” for purposes of the Articles (each an “Indemnified Person”) shall not be liable to the Company for
any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud, willful neglect or willful default of such Indemnified Person and provided further that such Indemnified Person acted in good the best interests of the Company |
| | FTAI | | | Company | |
| | | | believed
to be in or not opposed to faith and in a manner such Indemnified Person reasonably and had no reasonable cause to believe such Indemnified Person's conduct was unlawful. | ||
| | | | |||
Indemnification
and Advancement | | | The FTAI LLC Agreement provides that FTAI shall indemnify a director, officer, or any person who is or was serving at the request of FTAI as an officer, director, member, manager, partner, fiduciary, or trustee of another person provided that such person was or is a party to a threatened, pending, or completed action because of his or her role within FTAI and subject to such individual acting in good faith and, with respect to any criminal action, that such individual’s conduct was not unlawful. | | | The
Articles provide that, every Indemnified Person shall be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur by reason of their own actual fraud, willful neglect or willful default and provided further that such Indemnified Person acted in good faith and in a manner such Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company and had no reasonable cause to believe such Indemnified Person’s conduct was unlawful. |
| | | | |||
Distributions
and Dividends | | | The Board of Directors may, in its sole and absolute discretion, at any time declare, make and pay distributions of cash or other assets to the FTAI shareholders. | | | The Board
of Directors may, in its sole and absolute discretion subject to funds being legally available therefore, at any time declare, make and pay distributions of cash or other assets to the Company’s shareholders. |
• | Annual
Report on Form 10-K, for the fiscal year ended December 31, 2021 filed on February 28, 2022; |
• | Quarterly Reports on Form 10-Q, for the quarter ended March 31, 2022 filed on April 29, 2022, and for the quarter ended June 30, 2022 filed on July 29, 2022; |
• | Definitive
Proxy Statement for the 2022 Annual Meeting filed on April 14, 2022; and |
• | Current Reports on Form 8-K filed on February 25, 2022, April 13, 2022, April 28, 2022, May 27, 2022,
June 30, 2022, July 1, 2022, July 7, 2022, July 12, 2022, July 21, 2022, July 25, 2022, August 1,
2022 (as amended by the 8-K/A filed on August 5, 2022), August 15, 2022 and September 21, 2022. |
Recognition of Maintenance Revenue for Aircraft Leases | |||
| | ||
Description
of the Matter | | | As described in Note 2 to the consolidated financial statements, the Company recognizes maintenance revenue for aircraft leases related to the portion of maintenance payments received from lessees that are not expected to be reimbursed for maintenance events. Revenue related to maintenance on leased aircraft is recorded as a component of maintenance revenue which totaled $128.8 million for the year ended December 31, 2021, as
disclosed in Note 9. Auditing maintenance revenue related to aircraft leases was complex and highly judgmental due to the significant estimation involved in projecting the timing of future major maintenance events. In particular, such estimates are sensitive to significant assumptions such as the mean time between removal (MTBR) and forecasted utilization of the aircraft which are affected by |
| | historical
usage patterns and overall industry, market and economic conditions. Changes to these significant assumptions could have a material effect on the amount of maintenance revenue recognized in the period. | |
| | ||
How We Addressed the Matter in Our Audit | | | We
obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s maintenance revenue recognition process, including controls over management’s review of the significant assumptions used in determining the estimated timing of major maintenance events as described above. To test maintenance revenue for aircraft leases, we performed audit procedures that included, among others, assessing the Company’s revenue recognition methodology and testing
the significant assumptions described above and the completeness and accuracy of the underlying data used by the Company in its analyses. For example, we compared the significant assumptions used by management to the underlying customer lease agreements, historical utilization and third- party estimates for MTBR, when available. We tested management’s retrospective review of timing of estimated maintenance events to actual results to assess the historical accuracy of significant assumptions and contrary evidence, if any. We also performed a sensitivity analysis on utilization of the aircraft to evaluate the changes in the timing of the maintenance events from changes in utilization assumptions and the impact, if any, on maintenance revenue recognized in the period. |
| | | | (Unaudited) June 30, | | | December 31, | |||||
| | Notes | | | 2022 | | | 2021 | | | 2020 | |
Assets | | | | | | | | | ||||
Cash
and cash equivalents | | | 2 | | | $42,681 | | | $2,158 | | | $1,388 |
Accounts
receivable, net | | | 2 | | | 73,227 | | | 121,257 | | | 81,585 |
Leasing
equipment, net | | | 3 | | | 1,674,053 | | | 1,714,136 | | | 1,451,674 |
Finance
leases, net | | | 4 | | | 6,494 | | | 7,583 | | | 6,927 |
Investments | | | 5 | | | 22,638 | | | 22,917 | | | 22,721 |
Intangible
assets, net | | | 6 | | | 31,868 | | | 30,962 | | | 5,758 |
Inventory,
net | | | 2 | | | 112,650 | | | 100,308 | | | 58,219 |
Other
assets | | | 2 | | | 162,813 | | | 97,531 | | | 76,232 |
Total
assets | | | | | $2,126,424 | | | $2,096,852 | | | $1,704,504 | |
| | | | | | | | |||||
Liabilities | | | | | | | | | ||||
Accounts
payable and accrued liabilities | | | | | $21,120 | | | $32,058 | | | $11,350 | |
Management
fees payable to affiliate | | | 11 | | | 41,796 | | | 43,477 | | | 22,639 |
Loans
payable to affiliate | | | 7 | | | 26,447 | | | 25,181 | | | 22,863 |
Maintenance
deposits | | | 2 | | | 58,553 | | | 106,164 | | | 148,293 |
Security
deposits | | | 2 | | | 26,251 | | | 38,639 | | | 35,555 |
Other
liabilities | | | | | 39,749 | | | 31,274 | | | 16,155 | |
Total
liabilities | | | | | $213,916 | | | $276,793 | | | $256,855 | |
| | | | | | | | |||||
Commitments
and contingencies | | | 13 | | | | | | | |||
| | | | | | | | |||||
Equity | | | | | | | | | ||||
Ordinary
shares ($1.00 par value per share; 50,000 shares authorized; 105.6, 100.0 and 100.0 shares issued and outstanding as of June 30, 2022 (Unaudited), December 31, 2021 and 2020, respectively) | | | | | — | | | — | | | — | |
Additional
paid in capital | | | | | 1,265,573 | | | 1,139,628 | | | 897,089 | |
Retained
earnings | | | | | 646,935 | | | 680,431 | | | 550,560 | |
Total
equity | | | | | 1,912,508 | | | 1,820,059 | | | 1,447,649 | |
Total
liabilities and equity | | | | | $2,126,424 | | | $2,096,852 | | | $1,704,504 |
| | | | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | |||||||||||
| | Notes | | | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Revenues | | | 2 | | | $193,956 | | | $134,544 | | | $321,422 | | | $281,756 | | | $336,130 |
| | | | | | | | | | | | |||||||
Expenses | | | | | | | | | | | | | ||||||
Operating
expenses | | | 2 | | | 69,039 | | | 10,511 | | | 42,310 | | | 20,963 | | | 17,697 |
Cost
of sales | | | 2 | | | 24,191 | | | 3,210 | | | 14,308 | | | 200 | | | — |
General
and administrative | | | 11 | | | 5,771 | | | 4,304 | | | 9,555 | | | 10,123 | | | 10,875 |
Acquisition
and transaction expenses | | | | | 2,601 | | | 2,578 | | | 4,933 | | | 8,491 | | | 11,434 | |
Management
fees and incentive allocation to affiliate | | | 11 | | | 4,153 | | | 4,911 | | | 9,162 | | | 11,549 | | | 16,961 |
Depreciation
and amortization | | | 3, 4, 6 | | | 73,690 | | | 67,369 | | | 142,121 | | | 134,723 | | | 128,990 |
Asset
impairment | | | 3 | | | 123,676 | | | 2,189 | | | 10,463 | | | 33,978 | | | — |
Interest
expense | | | | | 1,266 | | | 1,150 | | | 2,318 | | | 2,110 | | | 2,433 | |
Total
expenses | | | | | 304,387 | | | 96,222 | | | 235,170 | | | 222,137 | | | 188,390 | |
| | | | | | | | | | | | |||||||
Other
income (expense) | | | | | | | | | | | | | ||||||
Equity
in earnings (losses) of unconsolidated entities | | | 5 | | | 233 | | | (681) | | | (1,403) | | | (1,932) | | | (1,829) |
Gain
(loss) on sale of assets, net | | | | | 79,933 | | | 4,782 | | | 49,015 | | | (300) | | | 81,954 | |
Interest
income | | | | | 203 | | | 624 | | | 1,153 | | | 94 | | | 104 | |
Other
expense | | | | | — | | | — | | | (1,680) | | | — | | | — | |
Total
other income (expense) | | | | | 80,369 | | | 4,725 | | | 47,085 | | | (2,138) | | | 80,229 | |
(Losses)
income before income taxes | | | | | (30,062) | | | 43,047 | | | 133,337 | | | 57,481 | | | 227,969 | |
Provision
(benefit from) for income taxes | | | 10 | | | 3,434 | | | 537 | | | 3,466 | | | (4,674) | | | 5,162 |
Net
(loss) income attributable to shareholders | | | | | $(33,496) | | | $42,510 | | | $129,871 | | | $62,155 | | | $222,807 | |
| | | | | | | | | | | | |||||||
(Loss)
earnings per share: | | | 12 | | | | | | | | | | | |||||
Basic | | | | | $(326.47) | | | $425.10 | | | $1,298.71 | | | $621.55 | | | $2,228.07 | |
Diluted | | | | | $(326.47) | | | $425.10 | | | $1,298.71 | | | $621.55 | | | $2,228.07 | |
Weighted
average shares outstanding: | | | | | | | | | | | | | ||||||
Basic | | | | | 102.6 | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 | |
Diluted | | | | | 102.6 | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 |
| | Additional
Paid In Capital | | | Retained Earnings | | | Total
Equity | |
Equity - December 31, 2018 | | | $825,719 | | | $265,598 | | | $1,091,317 |
Net
income | | | — | | | 222,807 | | | 222,807 |
Capital
contributions | | | 435,631 | | | — | | | 435,631 |
Capital
distributions | | | (393,396) | | | — | | | (393,396) |
Equity
- December 31, 2019 | | | $867,954 | | | $488,405 | | | $1,356,359 |
Net
income | | | — | | | 62,155 | | | 62,155 |
Capital
contributions | | | 267,271 | | | — | | | 267,271 |
Capital
distributions | | | (238,136) | | | — | | | (238,136) |
Equity
- December 31, 2020 | | | $897,089 | | | $550,560 | | | $1,447,649 |
Net
income | | | — | | | 129,871 | | | 129,871 |
Capital
contributions | | | 520,426 | | | — | | | 520,426 |
Capital
distributions | | | (277,887) | | | — | | | (277,887) |
Equity
- December 31, 2021 | | | $1,139,628 | | | $680,431 | | | $1,820,059 |
Net
loss (Unaudited) | | | — | | | (33,496) | | | (33,496) |
Capital
contributions (Unaudited) | | | 230,766 | | | — | | | 230,766 |
Capital
distributions (Unaudited) | | | (104,821) | | | — | | | (104,821) |
Equity
- June 30, 2022 (Unaudited) | | | $1,265,573 | | | $646,935 | | | $1,912,508 |
| | Additional
Paid In Capital | | | Retained Earnings | | | Total
Equity | |
Equity - December 31, 2020 | | | $897,089 | | | $550,560 | | | $1,447,649 |
Net
income (Unaudited) | | | — | | | 42,510 | | | 42,510 |
Capital
contributions (Unaudited) | | | 140,273 | | | — | | | 140,273 |
Capital
distributions (Unaudited) | | | (88,159) | | | — | | | (88,159) |
Equity
- June 30, 2021 (Unaudited) | | | $949,203 | | | $593,070 | | | $1,542,273 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Cash
flows from operating activities: | | | | | | | | | | | |||||
Net
(loss) income | | | $(33,496) | | | $42,510 | | | $129,871 | | | $62,155 | | | $222,807 |
Adjustments
to reconcile net (loss) income to cash provided by operating activities: | | | | | | | | | | | |||||
Equity
in (earnings) losses of unconsolidated entities | | | (233) | | | 681 | | | 1,403 | | | 1,932 | | | 1,829 |
(Gain)
loss on sale of assets, net | | | (79,933) | | | (4,782) | | | (49,015) | | | 300 | | | (81,954) |
Security
deposits and maintenance claims included in earnings | | | (30,208) | | | (15,413) | | | (39,067) | | | (6,362) | | | (20,385) |
Depreciation
and amortization | | | 73,690 | | | 67,369 | | | 142,121 | | | 134,723 | | | 128,990 |
Payment-in-kind
interest | | | 1,266 | | | 1,150 | | | 2,318 | | | 2,110 | | | 1,467 |
Asset
impairment | | | 123,676 | | | 2,189 | | | 10,463 | | | 33,978 | | | — |
Change
in deferred income taxes | | | 2,608 | | | (101) | | | 1,165 | | | (4,680) | | | 1,739 |
Amortization
of lease intangibles and incentives | | | 23,818 | | | 14,905 | | | 27,978 | | | 30,346 | | | 30,162 |
Provision
for (benefit from) credit losses | | | 47,128 | | | (729) | | | 12,880 | | | 3,337 | | | 3,063 |
Change
in: | | | | | | | | | | | |||||
Accounts
receivable, net | | | (15,381) | | | (31,468) | | | (63,561) | | | (72,320) | | | (22,942) |
Inventory,
net | | | (10,039) | | | (12,699) | | | (23,297) | | | (6) | | | (4,766) |
Other
assets | | | 1,105 | | | (1,993) | | | 8,495 | | | 12,248 | | | (11,251) |
Accounts
payable and accrued liabilities | | | (24,806) | | | (6,675) | | | (103) | | | 3,231 | | | (2,994) |
Management
fees payable to affiliate | | | (1,681) | | | 9,909 | | | 20,838 | | | (8,150) | | | 13,282 |
Other
liabilities | | | (2,185) | | | (972) | | | 1,923 | | | (6,624) | | | (6,987) |
Net
cash provided by operating activities | | | 75,329 | | | 63,881 | | | 184,412 | | | 186,218 | | | 252,060 |
| | | | | | | | | | ||||||
Cash
flows from investing activities: | | | | | | | | | | | |||||
Distribution
from (investment in) unconsolidated entities | | | 512 | | | — | | | (1,600) | | | — | | | (13,500) |
Principal
collections on finance leases | | | 575 | | | 1,269 | | | 7,387 | | | 13,823 | | | 4,709 |
Acquisition
of leasing equipment | | | (320,766) | | | (170,132) | | | (571,974) | | | (319,652) | | | (567,136) |
Acquisition
of property, plant and equipment | | | (385) | | | (1,093) | | | (1,208) | | | (276) | | | (422) |
Acquisition
of lease intangibles | | | (5,282) | | | (517) | | | (24,017) | | | 1,997 | | | 606 |
Purchase
deposit for aircraft and aircraft engines | | | (7,100) | | | (9,180) | | | (13,658) | | | (8,343) | | | (1,000) |
Proceeds
from sale of leasing equipment | | | 138,020 | | | 57,155 | | | 158,927 | | | 72,175 | | | 248,454 |
Receipt
of deposits for sale of aircraft and engine | | | 8,245 | | | 1,425 | | | 600 | | | — | | | — |
Return
of purchase deposits for aircraft and aircraft engines | | | — | | | 1,010 | | | 1,010 | | | 2,350 | | | — |
Net
cash used in investing activities | | | $(186,181) | | | $(120,063) | | | $(444,533) | | | $(237,926) | | | $(328,289) |
| | | | | | | | | |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Cash
flows from financing activities: | | | | | | | | | | | |||||
Proceeds
from loans payable | | | $— | | | $— | | | $— | | | $— | | | $8,100 |
Repayment
of loans payable | | | — | | | — | | | — | | | — | | | (13,391) |
Receipt
of security deposits | | | 1,890 | | | 1,020 | | | 8,770 | | | 3,242 | | | 7,885 |
Return
of security deposits | | | — | | | (1,034) | | | (1,201) | | | (4,655) | | | (352) |
Receipt
of maintenance deposits | | | 24,418 | | | 16,255 | | | 31,507 | | | 32,824 | | | 65,824 |
Release
of maintenance deposits | | | (878) | | | (12,071) | | | (20,724) | | | (15,712) | | | (26,940) |
Capital
contributions from Parent | | | 230,766 | | | 140,273 | | | 520,426 | | | 267,271 | | | 435,631 |
Capital
distributions to Parent | | | (104,821) | | | (88,159) | | | (277,887) | | | (238,136) | | | (393,396) |
Net
cash provided by financing activities | | | 151,375 | | | 56,284 | | | 260,891 | | | 44,834 | | | 83,361 |
| | | | | | | | | | ||||||
Net
increase (decrease) in cash and cash equivalents | | | 40,523 | | | 102 | | | 770 | | | (6,874) | | | 7,132 |
Cash
and cash equivalents, beginning of period | | | 2,158 | | | 1,388 | | | 1,388 | | | 8,262 | | | 1,130 |
Cash
and cash equivalents, end of period | | | $42,681 | | | $1,490 | | | $2,158 | | | $1,388 | | | $8,262 |
| | | | | | | | | | ||||||
Supplemental
disclosure of cash flow information: | | | | | | | | | | | |||||
Cash
paid for interest | | | $— | | | $— | | | $— | | | $— | | | $852 |
Cash
paid for taxes | | | 2,370 | | | — | | | 137 | | | — | | | 667 |
| | | | | | | | | | ||||||
Supplemental
disclosure of non-cash investing and financing activities: | | | | | | | | | | | |||||
Acquisition
and transfers of leasing equipment | | | $102,193 | | | $23,970 | | | $47,114 | | | $141,297 | | | $(24,530) |
Assumed
and settled security deposits | | | (12,055) | | | (1,042) | | | (4,041) | | | (5,825) | | | (239) |
Assumed
and settled maintenance deposits | | | (54,436) | | | (22,123) | | | (22,382) | | | (58,906) | | | 15,117 |
Asset | | | Range
of Estimated Useful Lives | | | Residual Value Estimates |
Aircraft | | | 25 years
from date of manufacture | | | Generally not to exceed 15% of manufacturer’s list price when new |
Aircraft engines | | | 2
- 6 years, based on maintenance adjusted service life | | | Sum of engine core salvage value plus the estimated fair value of life limited parts |
Aviation tooling and equipment | | | 3
- 6 years from date of purchase | | | Scrap value at end of useful life |
Furniture and fixtures | | | 3
- 6 years from date of purchase | | | None |
| | (Unaudited) June 30, | | | |||||
| | 2022 | | | 2021 | | | 2020 | |
Leasing
equipment | | | 2,120,295 | | | $2,122,428 | | | $1,809,263 |
Less:
Accumulated depreciation | | | (446,242) | | | (408,292) | | | (357,589) |
Leasing
equipment, net | | | $1,674,053 | | | $1,714,136 | | | $1,451,674 |
| | (Unaudited) June 30, | | | December
31. | ||||
| | 2022 | | | 2021 | | | 2020 | |
Leasing
equipment, net | | | | | | | |||
Africa | | | $21,253 | | | $— | | | $— |
Asia | | | 275,387 | | | 365,331 | | | 444,748 |
Europe | | | 688,800 | | | 839,555 | | | 774,300 |
North
America | | | 319,126 | | | 263,718 | | | 207,617 |
South
America | | | 369,487 | | | 245,532 | | | 25,009 |
Total
leasing equipment, net | | | $1,674,053 | | | $1,714,136 | | | $1,451,674 |
| | (Unaudited) June 30, | | | Year
Ended December 31, | |||||||
| | 2022 | | | 2021 | | | 2020 | | | 2019 | |
Acquisitions: | | | | | | | | | ||||
Aircraft | | | 22 | | | 52 | | | 20 | | | 31 |
Engines | | | 37 | | | 60 | | | 37 | | | 31 |
Dispositions: | | | | | | | | | ||||
Aircraft | | | 4 | | | 4 | | | — | | | 5 |
Engines | | | 29 | | | 56 | | | 25 | | | 58 |
| | (Unaudited) Six Months Ended June 30, | | | Year
Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Depreciation
expense for leasing equipment | | | $73,452 | | | $67,274 | | | $141,826 | | | $134,597 | | | $128,990 |
| | (Unaudited) June 30, | | | |||||
| | 2022 | | | 2021 | | | 2020 | |
Finance
leases | | | $7,056 | | | $8,358 | | | $9,389 |
Unearned
revenue | | | (562) | | | (775) | | | (2,462) |
Finance
leases, net | | | $6,494 | | | $7,583 | | | $6,927 |
| | | | | | Carrying
Value | |||||||||
| | Investment | | | Ownership
Percentage | | | (Unaudited) | | | 2021 | | | 2020 | |
Advanced
Engine Repair JV | | | Equity method | | | 25% | | | $20,752 | | | $21,317 | | | $22,721 |
Falcon
MSN 177 LLC | | | Equity method | | | 50% | | | 1,886 | | | 1,600 | | | — |
| | | | | | $22,638 | | | $22,917 | | | $22,721 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Advanced
Engine Repair JV | | | $(566) | | | $(681) | | | $(1,403) | | | $(1,932) | | | $(1,829) |
Falcon
MSN 177 LLC | | | 799 | | | — | | | — | | | — | | | — |
Total | | | $233 | | | $(681) | | | $(1,403) | | | $(1,932) | | | $(1,829) |
| | (Unaudited)
| | | | | |||
Intangible assets | | | | | | | |||
Acquired
favorable lease intangibles | | | $75,726 | | | $67,013 | | | $35,349 |
Less:
Accumulated amortization | | | (43,858) | | | (36,051) | | | (29,591) |
Total
intangible assets, net | | | $31,868 | | | $30,962 | | | $5,758 |
| | | | | | ||||
Intangible
liabilities | | | | | | | |||
Acquired
unfavorable lease intangibles | | | $18,227 | | | $14,795 | | | $7,151 |
Less:
Accumulated amortization | | | (6,906) | | | (6,068) | | | (4,604) |
Acquired
unfavorable lease intangibles, net | | | $11,321 | | | $8,727 | | | $2,547 |
| | Classification
in Consolidated Statements of Operations | | | (Unaudited) Six Months Ended June 30, | | | Year
Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | ||||
Lease
intangibles | | | Revenues | | | $6,968 | | | $1,950 | | | $4,993 | | | $3,747 | | | $7,181 |
| | (Unaudited) | | | ||
2022 | | | 5,732 | | | $9,691 |
2023 | | | 7,910 | | | 7,034 |
2024 | | | 4,691 | | | 4,117 |
2025 | | | 1,948 | | | 1,782 |
2026 | | | 519 | | | 389 |
Thereafter | | | (253) | | | (778) |
Total | | | $20,547 | | | $22,235 |
• | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. |
• | Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market
corroborated inputs. |
• | Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability. |
• | Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
• | Income
approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts. |
• | Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | | | |||||
Lease
income | | | $71,043 | | | $79,997 | | | $161,985 | | | $166,331 | | | $197,305 |
Maintenance
revenue | | | 76,664 | | | 47,511 | | | 128,819 | | | 102,007 | | | 134,369 |
Finance
lease income | | | 213 | | | 846 | | | 1,747 | | | 2,260 | | | 2,648 |
Other
revenue | | | 46,036 | | | 6,190 | | | 28,871 | | | 11,158 | | | 1,808 |
Total
revenues | | | $193,956 | | | $134,544 | | | $321,422 | | | $281,756 | | | $336,130 |
| | (Unaudited) | | | ||||||||
| | Operating
leases | | | Finance leases | | | Operating leases | | | Finance
leases | |
2022 | | | $61,762 | | | $181 | | | $161,742 | | | $394 |
2023 | | | 104,763 | | | 258 | | | 127,272 | | | 258 |
2024 | | | 72,008 | | | 113 | | | 92,962 | | | 113 |
2025 | | | 45,410 | | | 10 | | | 65,390 | | | 10 |
2026 | | | 26,395 | | | — | | | 38,005 | | | — |
Thereafter | | | 67,740 | | | — | | | 43,355 | | | — |
Total | | | $378,078 | | | $562 | | | $528,726 | | | $775 |
| | (Unaudited) Six
Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | | | |||||
Africa | | | $850 | | | $235 | | | $235 | | | $10,259 | | | $14,542 |
Asia | | | 38,016 | | | 57,503 | | | 114,389 | | | 110,602 | | | 118,744 |
Europe | | | 64,036 | | | 53,401 | | | 133,537 | | | 124,670 | | | 157,942 |
North
America | | | 66,674 | | | 20,950 | | | 62,121 | | | 32,961 | | | 36,391 |
South
America | | | 24,380 | | | 2,455 | | | 11,140 | | | 3,264 | | | 8,511 |
Total
revenues | | | $193,956 | | | $134,544 | | | $321,422 | | | $281,756 | | | $336,130 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Current: | | | | | | | | | | | |||||
Cayman
Islands | | | $— | | | $— | | | $— | | | $— | | | $— |
United
States: | | | | | | | | | | | |||||
Federal | | | 335 | | | 457 | | | 1,583 | | | (114) | | | 2,573 |
State
and local | | | 506 | | | 164 | | | 647 | | | — | | | 723 |
Non-U.S. | | | (15) | | | 17 | | | 71 | | | 120 | | | 127 |
Total
current provision | | | 826 | | | 638 | | | 2,301 | | | 6 | | | 3,423 |
Deferred: | | | | | | | | | | | |||||
Cayman
Islands | | | $— | | | $— | | | $— | | | $— | | | $— |
United
States: | | | | | | | | | | | |||||
Federal | | | 1,531 | | | — | | | 557 | | | (448) | | | (1,754) |
State
and local | | | 262 | | | — | | | 166 | | | (134) | | | (637) |
Non-U.S. | | | 815 | | | (101) | | | 442 | | | (4,098) | | | 4,130 |
Total
deferred (benefit) provision | | | 2,608 | | | (101) | | | 1,165 | | | (4,680) | | | 1,739 |
Total | | | $3,434 | | | $537 | | | $3,466 | | | $(4,674) | | | $5,162 |
| | Year
Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Cayman
Islands statutory tax rate | | | —% | | | —% | | | —% |
Income
subject to tax in the United States | | | 2.1% | | | (0.2)% | | | 0.1% |
Other
Foreign taxes | | | (2.9)% | | | (18.4)% | | | 1.9% |
Change
in valuation allowance | | | 3.4% | | | 10.6% | | | 0.3% |
Provision
for income taxes | | | 2.6% | | | (8.0)% | | | 2.3% |
| | |||||
| | 2021 | | | 2020 | |
Deferred
tax assets: | | | | | ||
Net
operating loss carryforwards | | | $29,015 | | | $26,253 |
Interest
expense | | | 1,530 | | | 1,043 |
Investment
in partnerships | | | 1,519 | | | 1,224 |
Other | | | 278 | | | 257 |
Total
deferred tax assets | | | 32,342 | | | 28,777 |
Less
valuation allowance | | | (13,084) | | | (8,529) |
Net
deferred tax assets | | | 19,258 | | | 20,248 |
Deferred
tax liabilities: | | | | | ||
Fixed
assets | | | (20,072) | | | (19,898) |
Net
deferred tax liabilities | | | $(814) | | | $350 |
| | |||||
| | 2021 | | | 2020 | |
Valuation
allowance at beginning of period | | | $8,529 | | | $2,390 |
Change
due to current year losses | | | 4,563 | | | 6,139 |
Change
due to current year releases | | | (8) | | | — |
Valuation
allowance at end of period | | | $13,084 | | | $8,529 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Management
fees | | | $4,153 | | | 4,911 | | | $9,162 | | | $11,549 | | | $9,296 |
Capital
gains incentive allocation | | | — | | | — | | | — | | | — | | | 7,665 |
Total | | | $4,153 | | | $4,911 | | | $9,162 | | | $11,549 | | | $16,961 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Classification
in the Consolidated Statements of Operations: | | | | | | | | | | | |||||
General
and administrative expenses | | | $2,694 | | | $2,389 | | | $4,779 | | | $5,654 | | | $7,153 |
Acquisition
and transaction expenses | | | 652 | | | 547 | | | 1,093 | | | 1,805 | | | 2,793 |
Total | | | $3,346 | | | $2,936 | | | $5,872 | | | $7,459 | | | $9,946 |
| | (Unaudited) Six
Months Ended June 30, | | | Year Ended December 31, | ||||||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 | |
Classification
in the Consolidated Statements of Operations: | | | | | | | | | | | |||||
General
and administrative expenses | | | $3,077 | | | $1,915 | | | $4,776 | | | $4,469 | | | $3,722 |
| | (Unaudited) June 30, | | | |||||
| | 2022 | | | 2021 | | | 2020 | |
Accrued
management fees and reimbursable expenses | | | $41,796 | | | $43,477 | | | $22,639 |
| | (Unaudited)
Six Months Ended June 30, | | | Year Ended December 31, | ||||||||||
(in
thousands, except share data) | | | 2022 | | | 2021 | | | 2021 | | | 2020 | | | 2019 |
Net
(loss) income attributable to shareholders | | | $(33,496) | | | $42,510 | | | $129,871 | | | $62,155 | | | $222,807 |
Weighted
average shares outstanding: | | | | | | | | | | | |||||
Basic | | | 102.6 | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 |
Diluted | | | 102.6 | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 |
Basic
and Diluted Net (loss) earnings per share | | | $(326.47) | | | $425.10 | | | $1,298.71 | | | $621.55 | | | $2,228.07 |
| | (Unaudited) | |
2022 | | | $406 |
2023 | | | 831 |
2024 | | | 858 |
2025 | | | 864 |
2026 | | | 321 |
Thereafter | | | — |
Total | | | $3,280 |
| | FTAI
FINANCE HOLDCO LTD. | |||||||
| | | | ||||||
| | By: | | | /s/
Eun (Angela) Nam | ||||
| | | | Name: | | | |||
| | | | Title: | | | Chief
Financial Officer and Chief Accounting Officer | ||
| | | | | | ||||
| | FTAI
AVIATION MERGER SUB LLC | |||||||
| | | | | | ||||
| | By: | | | |||||
| | | | Name: | | | |||
| | | | Title: | | | Authorized
Person | ||
| | | | | | ||||
| | FORTRESS
TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC | |||||||
| | | | | | ||||
| | By: | | | /s/
Kevin Krieger | ||||
| | | | Name: | | | |||
| | | | Title: | | | Secretary |
1 | The name of the Company is FTAI
Aviation Ltd.. |
2 | The registered office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide. |
3 | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not
prohibited by the laws of the Cayman Islands. |
4 | Subject to the following provisions of this Memorandum, the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by Section 27(2) of the Act. |
5 | Nothing in this Memorandum shall permit the Company to carry on a business for which a licence is required under the laws of the Cayman Islands unless duly licensed. |
6 | The
liability of each Member is limited to the amount from time to time unpaid on such Member's shares. |
7 | The share capital of the Company is US$22,000,000 divided into 2,000,000,000 Ordinary Shares of a par value of US$0.01 each and 200,000,000 Preferred Shares of a par value of US$0.01 each. |
8 | The Company may exercise the power contained in the Act to deregister in the Cayman Islands and be registered by way of continuation in another jurisdiction. |
9 | Capitalised
terms that are not defined in this Memorandum bear the meaning given in the Articles of Association of the Company. |
1 | Interpretation |
1.1 | In
these Articles, Table A in the First Schedule to the Act does not apply and, unless there is something in the subject or context inconsistent therewith: |
“Act” | | | the Companies Act (As Revised) of the Cayman Islands. |
| | ||
“Additional
Preferred Holder” | | | means, with respect to any Additional Preferred Shares, the Record Holder of such Additional Preferred Shares |
| | ||
“Additional
Preferred Shares” | | | means Shares of any class that entitles the Record Holders thereof to a preference or priority over the Record Holders of the Common Shares in (a) the right to share profits or losses or items thereof, (b) the right to share in Company distributions, or (c) rights upon dissolution or liquidation of the Company that may be created from time to time in accordance with these Articles. |
| | ||
“Additional
Preferred Share Designation” | | | means the Share Designation with respect to any Additional Preferred Shares. |
| | ||
“allotment” | | | shares
are taken to be allotted when a person acquires the unconditional right to be included in the Register of Members in respect of those shares. |
| | ||
“Affiliate” | | | means,
with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the Person in question. As used herein, the term “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. |
| | ||
“Applicable
Law” | | | means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. |
| | ||
“Articles” | | | means
these amended and restated articles of association of the Company, and includes any exhibits, annexures or schedules hereto (including, for the avoidance of doubt, the Issued Preferred Shares Designations). |
| | ||
“Audit
Committee” | | | means the audit committee of the board of Directors established pursuant to these Articles, or any successor committee. |
| | ||
“Auditor” | | | means
the person for the time being performing the duties of auditor of the Company (if any). |
| |
“business day” | | | means
any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. |
| | ||
“Cause” | | | means,
with respect to each Director (a) the failure by such Director to perform his or her assigned duties for the Company, (b) committing any material breach or violation of the Company’s policies, (c) engaging in any dishonesty, fraud, embezzlement, misappropriation, conversion of assets or gross misconduct detrimental to the Company’s interests, or (d) the commission of any act or omission that results in, or may reasonably expected to result in, a conviction of, or the entry of a pleading of guilty or nolo contendere to, any felony or crime involving moral turpitude. |
| | ||
“Certificate” | | | means
a certificate (i) substantially in the form of Exhibit A (in the case of Common Shares), Exhibit B (in the case of Series A Preferred Shares), Exhibit C (in the case of the Series B Preferred Shares) or Exhibit D (in the case of the Series C Preferred Shares) to these Articles, (ii) in global form in accordance with the rules and regulations of the Depositary or (iii) in such other form as may be adopted by the Directors, issued by the Company. |
| | ||
“Chairperson” | | | means
the chairperson of the board of Directors elected in accordance with Article 27.7. |
| | ||
“Chief Executive Officer” | | | means
the chief executive officer of the Company appointed by the Directors in accordance with Article 31.7(a). |
| | ||
“Chief Financial Officer” | | | means
the chief financial officer of the Company appointed by the Directors in accordance with Article 31.7(b). |
| | ||
“Clearing House” | | | means
a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. |
| | ||
“Code” | | | means
the United States Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law. |
| | ||
“Commission” | | | means
the United States Securities and Exchange Commission. |
| | ||
“Common Members” | | | means
the Members that hold Common Shares, and shall only refer to the Common Shares (and not any Preferred Shares) held by such Members. |
| | ||
“Common Shares” | | | means
ordinary shares of a par value of US$0.01 each in the share capital of the Company. |
| | ||
“Company” | | | means
the above named company. |
| | ||
“Company Group” | | | means
the Company and each Subsidiary of the Company. |
| | ||
“Company’s Website” | | | means
the website of the Company and/or its web-address or domain name (if any). |
| |
“Compensation Committee” | | | means
the compensation committee of the board of Directors established pursuant to these Articles, or any successor committee. |
| | ||
“Depository” | | | means,
with respect to any Shares issued in global form, The Depository Trust Company and its successors and permitted assigns. |
| | ||
“Designated Stock Exchange” | | | the
Nasdaq Global Select Market and any other stock exchange or interdealer quotation system listed in Schedule 4 of the Act on which shares in the capital of the Company are listed or quoted. |
| | ||
“Directors” | | | means
the directors for the time being of the Company. |
| | ||
“Dividend” | | | means
any dividend resolved to be paid on Shares pursuant to these Articles, and includes a distribution or interim dividend or interim distribution. |
| | ||
“Electronic Communication” | | | means
a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. |
| | ||
“Electronic
Record” | | | has the same meaning as in the Electronic Transactions Act. |
“Electronic Transactions Act” | | | means
the Electronic Transactions Act (As Revised) of the Cayman Islands. |
| | ||
“Exchange Act” | | | means
the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder. |
| | ||
“Governmental Entity” | | | means
any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof. |
| | ||
“Group Member” | | | means
a member of the Company Group. |
| | ||
“Indemnified Person” | | | means
(a) any Person who is or was a Director or officer of the Company, (b) any Person who is or was serving at the request of the Company as an officer, director, member, manager, partner, tax matter partner, fiduciary or trustee of another Person (including any Subsidiary); provided, that a Person shall not be an Indemnified Person by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services, and (c) any Person the Directors designate as an “Indemnified Person” for purposes of these Articles. |
| | ||
“Independent
Director” | | | means a Director who (i) qualifies as an “independent director” within the meaning of the corporate governance listing standards from time to time adopted by the Designated Stock Exchange with respect to the composition of the board of directors of a listed company (without regard to any independence criteria applicable under such standards only to the members of a committee of the board of directors) and (ii) also satisfies the minimum requirements of director independence of Rule 10A-3(b)(1) under the Exchange Act (as from time to time in effect),
whether or not such Director is a member of the Audit Committee. |
| | ||
“Initial Members” | | | means
FTAI Offshore Holdings L.P. and Fortress Worldwide Transportation and Infrastructure Investors LP |
| |
“Issued Preferred Holders” | | | means
the Series A Holders, the Series B Holders and the Series C Holders, and shall include Additional Preferred Holders (as applicable). |
| | ||
“Issued Preferred Shares” | | | means
the Series A Preferred Shares, the Series B Preferred Shares and the Series C Preferred Shares, and shall include Additional Preferred Shares (as applicable). |
| | ||
“Issued Preferred Shares Designations” | | | means
the Series A Preferred Share Designation, the Series B Preferred Share Designation and the Series C Preferred Share Designation, and shall include any Additional Preferred Share Designation (as applicable). For the avoidance of doubt, any reference in these Articles to an “applicable” Issued Preferred Shares Designation means, (i) with respect to the Series A Preferred Shares, the Series A Holders or the Series A Nonpayment Directors, the Series A Preferred Share Designation, (ii) with respect to the Series B Preferred Shares, the Series B Holders or the Series B Nonpayment Directors, the Series B Preferred Share Designation, (iii) with respect to the Series C Preferred Shares, the Series C Holders or the Series C Nonpayment Directors, the Series C Preferred Share Designation and (iv) with respect to any Additional Preferred Shares, the applicable Additional Preferred Share Designation. |
| | ||
“Issued
Preferred Shares Liquidation Preference” | | | means, (i) with respect to the Series A Preferred Shares, the Series A Liquidation Preference, (ii) with respect to the Series B Preferred Shares, the Series B Liquidation Preference and (iii) with respect to the Series C Preferred Shares, the Series C Liquidation Preference. |
| | ||
“Issued
Preferred Shares Nonpayment Board Expansion” | | | means a Series A Nonpayment Board Expansion, a Series B Nonpayment Board Expansion or a Series C Nonpayment Board Expansion, as applicable. |
| | ||
“Issued
Preferred Shares Nonpayment Directors” | | | means the Series A Nonpayment Directors, the Series B Nonpayment Directors or the Series C Nonpayment Directors, as applicable. For the avoidance of doubt, certain Issued Preferred Shares Nonpayment Directors may be Series A Nonpayment Directors, Series B Nonpayment Directors and Series C Nonpayment Directors. |
| | ||
“Liquidation
Date” | | | means the date on which an event giving rise to the dissolution of the Company occurs. |
| | ||
“Liquidator” | | | means
one or more Persons selected by the Directors to perform the functions of the liquidator of the Company as described in Articles 40.2 and 40.3. |
| | ||
“Manager” | | | means
FIG LLC, a Delaware limited liability company, together with its permitted assignees under the Management and Advisory Agreement, dated as of [ ] 2022, between, among others, the Company and FIG LLC, as amended, supplemented or restated from time to time. |
| | ||
“Member” | | | has
the same meaning as in the Act. |
| | ||
“Memorandum” | | | means
the amended and restated memorandum of association of the Company. |
| | ||
“Merger Agreement” | | | has
the meaning assigned to such term in Article 44.2. |
| | ||
“National Securities Exchange” | | | means
an exchange registered with the Commission under Section 6(a) of the Exchange Act. |
“Nominating and Corporate Governance Committee” | | | means
the nominating and corporate governance committee of the board of Directors established pursuant to these Articles, or any successor committee. |
| | ||
“Officer” | | | means
a person appointed to hold an office in the Company. |
| | ||
“Ordinary Resolution” | | | means
a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority regard shall be had to the number of votes to which each Member is entitled by these Articles. |
| | ||
“Outstanding” | | | means,
with respect to a class or series of Shares, all Shares of such class or series that are issued by the Company and reflected as outstanding on the Register of Members as of the date of determination. |
| | ||
“Percentage
Interest” | | | means, as of any date of determination, (i) as to any Common Shares, the product obtained by multiplying (a) 100% less the percentage applicable to the Shares referred to in clause (ii) by (b) the quotient obtained by dividing (x) the number of such Common Shares by (y) the total number of all Outstanding Common Shares, and (ii) as to any other Shares, if applicable, the percentage established for such Shares by the Directors as a part of the issuance of such Shares. For the avoidance of doubt, as set forth in the applicable Issued Preferred Shares Designation,
no “Percentage Interest” has been established for any series of Issued Preferred Shares. |
| | ||
“Person” or “person” | | | means
any individual, corporation, company, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, Governmental Entity or other entity. |
| | ||
“Preferred Shares” | | | means
the Issued Preferred Shares. |
| | ||
“Quarter” | | | means,
unless the context requires otherwise, a fiscal quarter of the Company. |
| | ||
“Record Date” | | | means,
with respect to any class or series of Shares, the date established by the Company in accordance with Article 4 for determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose; provided that the Record Date for determining the identity of Issued Preferred Holders entitled to receive payment of distributions on any Issued Preferred Shares shall be determined in accordance with the applicable Issued Preferred Shares Designation. |
| | ||
“Record
Holder” or “holder” | | | means, with respect to any Shares, the Person in whose name is entered in the Register of Members as the holder of such Share as of the opening of business on a particular Business Day. |
| | ||
“Register
of Members” | | | means the register of Members maintained in accordance with the Act, and includes (except where otherwise stated) any branch or duplicate register of Members, on behalf of the Company by the Transfer Agent. |
| | ||
“Registered
Office” | | | means the registered office for the time being of the Company. |
| |
“Seal” | | | means
the common seal of the Company and includes every duplicate seal. |
| | ||
“Secretary” | | | means
the secretary of the Company appointed by the Directors in accordance with Article 31.7(c). |
| | ||
“Securities Act” | | | means
the United States Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder. |
| | ||
“Series A Holder” | | | has
the meaning set forth in the Series A Preferred Share Designation. |
| | ||
“Series A Liquidation Preference” | | | has
the meaning set forth in the Series A Preferred Share Designation. |
| | ||
“Series A Preferred Share” | | | has
the meaning set forth in the Series A Preferred Share Designation. |
| | ||
“Series A Preferred Share Designation” | | | means
the Share Designation with respect to the 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares, annexed hereto as Annex A, as it may be amended, supplement or restated from time to time. |
| | ||
“Series A Nonpayment Board Expansion” | | | has
the meaning set forth in the Series A Preferred Share Designation. |
| | ||
“Series A Nonpayment Directors” | | | has
the meaning set forth in the Series A Preferred Share Designation. |
| | ||
“Series B Holder” | | | has
the meaning set forth in the Series B Preferred Share Designation. |
| | ||
“Series B Liquidation Preference” | | | has
the meaning set forth in the Series B Preferred Share Designation. |
| | ||
“Series B Preferred Share” | | | has
the meaning set forth in the Series B Preferred Share Designation. |
| | ||
“Series B Preferred Share Designation” | | | means
the Share Designation with respect to the 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares, annexed hereto as Annex B, as it may be amended, supplement or restated from time to time. |
| | ||
“Series B Nonpayment Board Expansion” | | | has
the meaning set forth in the Series B Preferred Share Designation. |
| | ||
“Series B Nonpayment Directors” | | | has
the meaning set forth in the Series B Preferred Share Designation. |
| | ||
“Series C Holder” | | | has
the meaning set forth in the Series C Preferred Share Designation. |
| | ||
“Series C Liquidation Preference” | | | has
the meaning set forth in the Series C Preferred Share Designation. |
| |
“Series C Preferred Share” | | | has
the meaning set forth in the Series C Preferred Share Designation. |
“Series C Preferred Share Designation” | | | means the Share Designation with respect to the 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares, annexed hereto as Annex C, as it may be amended, supplement or restated from time to time. |
| | ||
“Series
C Nonpayment Board Expansion” | | | has the meaning set forth in the Series C Preferred Share Designation. |
| | ||
“Series
C Nonpayment Directors” | | | has the meaning set forth in the Series C Preferred Share Designation. |
| | ||
“Share” | | | means
any share in the capital of the Company (including Common Shares and Issued Preferred Shares) issued in accordance with these Articles and the Act, and includes a fraction of a share in the Company. |
| | ||
“Share
Designation” | | | has the meaning assigned to such term in Article 2.1. |
| | ||
“Special
Resolution” | | | has the same meaning as in the Act, and includes a unanimous written resolution. |
| | ||
“Subsidiary” | | | means,
with respect to any Person, as of any date of determination, any other Person as to which such Person owns or otherwise controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such Person. |
| | ||
“Surviving
Entity” | | | has the meaning given to such term in Article 44.2(b). |
| | ||
“Transfer” | | | means,
with respect to a Share, a transaction by which the Record Holder of such Share transfers such Share to another Person who is or becomes a Member, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage. |
| | ||
“Transfer
Agent” | | | means, with respect to any class of Shares, such bank, trust company or other Person (including the Company or one of its Affiliates) as shall be appointed from time to time by the Company to act as registrar and transfer agent for such class of Shares; provided that if no Transfer Agent is specifically designated for such class of Shares, the
Company shall act in such capacity. |
| | ||
“Treasury Share” | | | means
a Share held in the name of the Company as a treasury share in accordance with the Act. |
| | ||
“U.S. GAAP” | | | means
United States generally accepted accounting principles consistently applied. |
| | ||
“Voting Shares” | | | means
the Common Shares and any other class of Shares issued by the Company that entitles the Record Holder thereof to vote on any matter submitted for consent or approval of Members generally under these Articles. For the avoidance of doubt, as set forth in the applicable Issued Preferred Shares Designation, the Issued Preferred Shares are not “Voting Shares” and the Issued Preferred Shares shall have only such voting rights as set forth in the applicable Issued Preferred Shares Designation or as otherwise required by applicable law. |
1.2 | In these Articles: |
(a) | words importing the singular number include the plural number and vice versa; |
(b) | words importing the masculine gender include the feminine gender; |
(c) | “written”
and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record; |
(d) | “shall” shall be construed as imperative and “may” shall be construed as permissive; |
(e) | references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced; |
(f) | any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression
shall be construed as illustrative and shall not limit the sense of the words preceding those terms and, for the avoidance of doubt, the term “include” or “includes” means include or includes, without limitation, and “including” means including, without limitation; |
(g) | the term “and/or” is used to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies or modifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term “and” shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires); |
(h) | headings
are inserted for reference only and shall be ignored in construing these Articles; |
(i) | any requirements as to delivery under these Articles include delivery in the form of an Electronic Record; |
(j) | any requirements as to execution or signature under these Articles including the execution of these Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; |
(k) | sections 8 and 19(3) of the Electronic Transactions Act shall not apply; and |
(l) | the
term “clear days” in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect. |
2 | Issue of Shares and other Securities |
2.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without
prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of additional Shares (including fractions of a Share), to such persons and at such times as they think proper, in one or more classes, with such designations, preferences, rights, powers and duties (which may be junior to, equivalent to, or senior or superior to, any existing classes of Shares), as shall be fixed by the Directors (each, including each Issued Preferred Shares Designation, a “Share Designation”), including (i) the right to share Company profits and losses or items thereof; (ii) the right to share in Company distributions, the dates distributions will be payable and whether distributions with respect to such series or class will be cumulative or non-cumulative; (iii) rights upon dissolution and liquidation of the Company;
(iv) whether, and the terms and conditions upon which, the Company may redeem the Shares; (v) whether such Shares are issued with the privilege of conversion or exchange and, if so, the conversion or exchange price or prices or rate or rates, or any adjustments thereto, the date or dates on which, or the period or periods during which, the shares will be convertible or exchangeable and all other terms and conditions upon which the conversion or exchange may be made; (vi) the terms and conditions upon which such Shares will be issued, evidenced by certificates and assigned or transferred; (vii) the method for determining the Percentage Interest, if any, applicable to such Shares; (viii) the terms and amounts of any sinking fund provided for the purchase or redemption of Shares of the class or series; (ix) whether there will be restrictions on the issuance of Shares of the same class
or series or any other class or series; and (x) the right, if any, of the holder of each such Share to vote on Company matters, including matters relating to the relative rights, preferences and privileges of such Shares. |
2.2 | The Company may issue rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company on such terms as the Directors may from time to time determine. |
2.3 | The
Company may issue units of securities in the Company, which may be comprised of whole or fractional Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors may from time to time determine. |
2.4 | The Company shall not issue Shares to bearer. |
2.5 | Shares
shall only be issued as fully paid-up. |
2.6 | The Common Shares shall have the following rights: |
(a) | as to voting: the holder of a Common Share shall (in respect of such Common Share) have the right to receive notice of, attend at and vote as a Member at any general meeting of the Company; and |
(b) | as to capital: a Common Share shall confer upon the holder thereof the right in a winding up to participate in the surplus assets of the
Company as provided in these Articles; and |
(c) | as to income: the Common Shares shall confer on the holders thereof the right to receive dividends as provided in these Articles. |
2.7 | The Preferred Shares shall have the following rights: |
(a) | as to voting: other than as expressly set out in the relevant Issued Preferred Shares Designation, the holder of a Preferred Share shall not (in respect of such Preferred Share) have the right to receive notice of, attend at or vote as a Member at any general meeting of the
Company, but may vote at a separate Class meeting convened in accordance with these Articles; and |
(b) | as to capital: a Preferred Share shall confer upon the holder thereof the right in a winding up to participate in the surplus assets of the Company as provided in the relevant Issued Preferred Shares Designation; and |
(c) | as to income: the Preferred Shares shall confer on the holders thereof the right to receive dividends as provided in the relevant Issued Preferred Shares Designation. |
3 | Register
of Members |
3.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with the Act. |
3.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Act. The Directors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register or registers, and to vary such determination from time to time. |
4 | Closing
Register of Members or Fixing Record Date |
4.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed sixty days. |
4.2 | In
lieu of, or apart from, closing the Register of Members, the Directors may fix in advance a date as the Record Date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, provided that such Record Date shall not exceed sixty days and be no less than ten days prior to the date where the determination will be made. |
4.3 | If the Register of Members is not so closed and no Record Date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution, the date of the day immediately following the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the Record Date for such determination of Members. When
a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
5 | Certificates for Shares |
5.1 | Subject to these Articles, in connection with the Company’s issuance of Shares to any Person, if the Directors resolve that Certificates shall be issued to such Person, the Company shall issue one or more Certificates in the name of such Person evidencing the number of such Shares being so issued.
Certificates shall be executed on behalf of the Company by the Chairperson or any Co-Chairperson, the Chief Executive Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary. Any or all of the signatures required on the Certificate may be by facsimile. If any officer who shall have signed or whose facsimile signature shall have been placed upon any such Certificate shall have ceased to be such officer before such Certificate is issued by the Company, such Certificate may nevertheless be issued by the Company with the same effect as if such Person were such officer at the date of issue. Certificates for each class of Shares shall be consecutively numbered
and shall be entered on the Register of Members as they are issued and shall exhibit the holder’s name and number and type of Shares. |
5.2 | The Company shall not be bound to issue more than one Certificate for Shares held jointly by more than one person and delivery of a Certificate to one joint holder shall be a sufficient delivery to all of them. |
5.3 | If any mutilated Certificate is surrendered to the Company, the appropriate officers on behalf of the
Company shall execute and deliver in exchange therefor, a new Certificate evidencing the same number and class or series of Shares as the Certificate so surrendered. The appropriate officers on behalf of the Company shall execute and deliver, a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate: (i) makes proof by affidavit, in form and substance satisfactory to the Company, that a previously issued Certificate has been lost, destroyed or stolen; (ii) requests the issuance of a new Certificate before the Company has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; (iii) if requested
by the Company, delivers to the Company a bond, in form and substance satisfactory to the Company, with surety or sureties and with fixed or open penalty as the Company may direct to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and (iv) satisfies any other reasonable requirements imposed by the Company. If a Member fails to notify the
Company within a reasonable time after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the Shares represented by the Certificate is registered before the Company receives such notification, the Member shall be precluded from making any claim against the Company for such transfer or for a new Certificate. As a condition to the issuance of any new Certificate under this Article 5.3, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith. |
5.4 | Every
Certificate sent in accordance with these Articles will be sent at the risk of the Member or other person entitled to the Certificate. The Company will not be responsible for any Certificate lost or delayed in the course of delivery. |
5.5 | Certificates shall be issued within the relevant time limit as prescribed by the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter, after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgement of a Share transfer with the Company. |
6 | Transfer of Shares |
6.1 | Subject to the terms of these Articles, any Member may Transfer all or any of their Shares by an instrument of transfer provided that such transfer complies with the rules and regulations of the Designated Stock |
6.2 | The
instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed by the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Directors may approve from time to time. |
6.3 | The Company shall not recognize any Transfer of Shares until the
Certificates evidencing such Shares (if any) are surrendered for registration of the Transfer. No charge shall be imposed by the Company for such Transfer; provided, that as a condition to the issuance of any new Certificate, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto. |
6.4 | The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members. |
6.5 | By
acceptance of the Transfer of any Share, each transferee of a Share (including any nominee holder or an agent or representative acquiring such Shares for the account of another Person) (i) shall be deemed to agree to be bound by the terms of the Memorandum and these Articles, and (ii) shall become the Record Holder of the Shares so transferred. The transfer of any Shares to any new Member shall not constitute an amendment to these Articles. |
6.6 | Nothing contained in these Articles shall preclude the settlement of any transactions involving Shares entered into through the facilities of any National Securities Exchange on which such Shares are listed for trading. |
7 | Redemption,
Repurchase and Surrender of Shares |
7.1 | Subject to the provisions of the Act, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of such Shares. For the
avoidance of doubt, a Special Resolution shall not be required to approve the redemption of Issued Preferred Shares in such manner and upon such other terms contemplated by the respective Issued Preferred Shares Designation. |
7.2 | Subject to the provisions of the Act, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders of Shares in the circumstances described in the Article above
shall not require further approval of the Members. |
7.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Act, including out of capital. |
7.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
8 | Treasury Shares |
8.1 | The
Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. |
8.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration). |
9 | Variation of Rights of Shares |
9.1 | Subject to
Article 3.1 and subject to the terms of the Issued Preferred Shares Designations, if at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two-thirds of the issued Shares of that class, or with the approval of a resolution passed by the holders of not less than two-thirds of the issued Shares of that
class at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of these Articles relating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy at least two-thirds of the issued Shares of the class. |
9.2 | For the purposes of a separate class meeting, subject to the terms of the Issued Preferred Shares Designations, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would
be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares. |
9.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights. |
10 | Commission on Sale of Shares |
11 | Non Recognition of Trusts |
12 | Lien on Shares |
12.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or their estate, either alone or jointly with any other person, whether a Member or not, but the Directors may
at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's lien on a Share shall also extend to any amount payable in respect of that Share. |
12.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within 14 clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the
death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold. |
12.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or their nominee shall be registered as the holder of the Shares comprised in any such transfer, and they shall not be bound to see to the application of the purchase money, nor shall their title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company's power of sale under these Articles. |
12.4 | The
net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale. |
13 | Transmission of Shares |
13.1 | If a Member dies, the survivor or survivors (where they were a joint holder), or their legal personal representatives (where they were a sole holder), shall be the only persons recognised by the Company
as having any title to the deceased Member's Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which the Member was a joint or sole holder. |
13.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by that person to the Company, either to become the holder of such Share or to have some person nominated by them registered as the holder of such Share. If they elect to have another person registered as the holder of such Share they shall sign an instrument
of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before their death or bankruptcy or liquidation or dissolution, as the case may be. |
13.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages to which they would be entitled if they were the holder of such Share. However, they shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the
Company and the Directors may at any time give notice requiring any such person to elect either to be registered or to have some person nominated by them registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before their death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with within 90 days of being received or deemed to be received (as determined pursuant to these Articles), the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
14 | Amendments
of Memorandum and Articles of Association and Alteration of Capital |
14.1 | The Company may by Ordinary Resolution: |
(a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; |
(b) | consolidate
and divide all or any of its share capital into Shares of larger amount than its existing Shares; |
(c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any denomination; |
(d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
(e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
14.2 | All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of these Articles with reference
to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. |
14.3 | Subject to the provisions of the Act and the provisions of these Articles as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution: |
(a) | change its name; |
(b) | alter or add to these Articles; |
(c) | alter
or add to the Memorandum with respect to any objects, powers or other matters specified therein; and |
(d) | reduce its share capital or any capital redemption reserve fund, |
15 | Offices and Places of Business |
16 | General Meetings |
16.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
16.2 | For so long as the Company's shares are traded on a Designated Stock Exchange, an annual general meeting of the Company shall be held in each year, other than in the year in which these Articles are adopted, at such time as determined
by the Directors and the Company may, but shall not (unless required by the Act) be obliged to, in each year hold any other general meeting. |
16.3 | The agenda for the annual general meeting shall be set by the Directors and shall include the election of the Directors in accordance with Article 25.1, the presentation of the report of the Directors (if any) and any proposals to be submitted to the Members for consideration at the annual general meeting at the request of any Member, provided such Member complies with Article 16.4. |
16.4 | A Member may by written notice to the
Company, not less than 90 days' and no more than 120 days' prior to the anniversary of the date of the preceding annual general meeting, and in the case of the first annual general meeting, no later than 25 February 2023 and no earlier than 26 January 2023, request that any proposal be submitted for consideration by the Members at the annual general meeting, provided that such Member is a Record Holder as at the date of such written notice and provided that such proposal may be properly submitted to the Members for approval in accordance with these Articles and the Act. Such submission shall include the proposal to be considered, details as to the background and reasoning for the proposal and the full text of the resolution to be put to the Members for approval at the annual general meeting, including as to whether the resolution is to be decided by Ordinary Resolution or Special Resolution. |
16.5 | The
Directors, the Chief Executive Officer, the Chairperson or the committee of the board of Directors that has been duly designated by the Directors and delegated such powers, may call general meetings, and shall call a meeting of Issued Preferred Holders as requested in accordance with the applicable Issued Preferred Shares Designation. For the avoidance of doubt, Members shall not have the ability to call general meetings (other than as set out in each Issued Preferred Shares Designation). |
17 | Notice of General Meetings |
17.1 | At least ten clear days', and no more than sixty clear days', notice shall be given of any general meeting. Every notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall be given in the manner hereinafter mentioned or in such other manner if any
as may be prescribed by the Company. |
17.2 | Whenever notice to the Members is required to be given under these Articles, a written waiver, signed by the Person entitled to notice, whether before or after the time stated therein, or a waiver by electronic transmission by the Person or Persons entitled to notice, or a waiver by electronic transmission by the Person or Persons entitled to notice whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a Person at any such meeting of the Members shall constitute a waiver of notice of such meeting, except when the Person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any general meeting of the Company need be specified in any written waiver of notice unless so required by resolution of the board of Directors. Any Member so waiving notice of a meeting shall be bound by the proceedings of such meeting in all respects as if due notice thereof had been given. All waivers and approvals shall be filed with the Company records or made part of the minutes of the meeting. |
17.3 | The accidental omission to give notice of a general meeting to, or the non receipt of notice of a general meeting by, any person
entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
18 | Proceedings at General Meetings |
18.1 | No business shall be transacted at any general meeting unless a quorum is present. The holders of a majority of the Voting Shares being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorised representative or proxy shall be a quorum. |
18.2 | A person may participate at a general meeting by conference telephone or other communications
equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting. |
18.3 | If a quorum is not present within half an hour from the time appointed for the meeting to commence, the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the Members present shall be a quorum. |
18.4 | The Directors
may, at any time prior to the time appointed for the meeting to commence, appoint any person to act as chairperson of a general meeting of the Company or, if the Directors do not make any such appointment, the Chairperson shall preside as chairperson at such general meeting. If there is no Chairperson, or if the Chairperson shall not be present within 15 minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors present shall elect one of their number to be chairperson of the meeting. |
18.5 | If no Director is willing to act as chairperson or if no Director is present within 15 minutes after the time appointed for the meeting to commence, the Members present shall choose one of their number to
be chairperson of the meeting. |
18.6 | Subject to these Articles and the Act: |
(a) | the Directors may adopt by resolution such rules and regulations for the conduct of any meeting; and |
(b) | except to the extent inconsistent with the rules and regulations adopted by the Directors, the chairperson shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. |
18.7 | The chairperson may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. |
18.8 | When a general meeting is adjourned
for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
18.9 | If a notice is issued in respect of a general meeting and the Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in the notice of the original meeting. |
18.10 | When
a general meeting is postponed for 30 days or more, notice of the postponed meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone a general meeting which has already been postponed. |
18.11 | A resolution put to the vote of the meeting shall be decided on a poll. |
18.12 | A poll shall be taken as the chairperson directs, and the result of the poll shall be deemed to be the resolution of the general meeting. |
18.13 | In
the case of an equality of votes the chairperson shall not be entitled to a second or casting vote. |
19 | Votes of Members |
19.1 | Subject to any rights or restrictions attached to any Shares, every Member present in any such manner shall have one vote for every Share of which they are the holder. For the avoidance of doubt: |
(a) | each holder of Outstanding Common Shares shall be entitled to one vote on all matters submitted to the Members for approval for each Outstanding Common Share held by such holder, save that such
holder shall have no voting rights, in respect of each Outstanding Common Share held by such holder, pursuant to any Issued Preferred Shares Designation, including in respect of the appointment of any Issued Preferred Shares Nonpayment Directors in accordance with the provisions of the applicable Issued Preferred Shares Designation; and |
(b) | each holder of Outstanding Preferred Shares shall have no voting rights in respect of such Outstanding Preferred Shares held by such holder, save that such holder shall have shall have such voting rights, in respect of each Outstanding Preferred Share held by such holder, set out in the applicable Issued Preferred Shares Designation, including in respect of the appointment of any Issued Preferred Shares Nonpayment Directors in accordance with the provisions of the applicable Issued
Preferred Shares Designation. |
19.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members. |
19.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by their committee, receiver, curator bonis, or other person on such Member's behalf appointed by
that court, and any such committee, receiver, curator bonis or other person may vote by proxy. |
19.4 | No person shall be entitled to vote at any general meeting unless such person is registered as a Member on the Record Date for such meeting nor unless all calls or other monies then payable by them in respect of Shares have been paid. |
19.5 | No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairperson whose decision shall be final and conclusive. |
19.6 | Votes
may be cast either personally or by proxy (or in the case of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes. |
19.7 | A Member holding more than one Share need not cast the votes in respect of their Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing the proxy, a proxy appointed under one
or more instruments may vote a Share or some or all of the Shares in respect of which they are appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which they are appointed. |
20 | Proxies |
20.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of their attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under the hand of its duly authorised representative. A proxy need not be a Member. |
20.2 | The
Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the person named in
the instrument proposes to vote. |
20.3 | The chairperson may in any event at their discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairperson, shall be invalid. |
20.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. |
20.5 | Votes
given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy. |
21 | Corporate Members |
21.1 | Any corporation or other non-natural
person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which they represent as the corporation could exercise if it were an individual Member. |
21.2 | If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such persons as it sees fit to act as its representative at any meeting of the
Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of Shares in respect of which |
22 | Shares
that May Not be Voted |
23 | Directors |
23.1 | There shall be a board of Directors consisting of such number of Directors as the then
elected or appointed Directors shall determine, which number of Directors shall not less than three Persons and no more than nine Persons, provided however that the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors and provided further that the limits in the number of Directors may be increased or decreased in accordance with any Issued Preferred Shares Designation. |
23.2 | The Directors shall be divided into three classes: Class I, Class II and Class III. The number of Directors in each class shall be as nearly equal as possible. Upon the adoption of these Articles, the existing Directors shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors
shall stand elected for a term expiring at the Company’s first annual general meeting following the adoption of these Articles, the Class II Directors shall stand appointed for a term expiring at the Company’s second annual general meeting following the adoption of these Articles and the Class III Directors shall stand elected for a term expiring at the Company’s third annual general meeting following the adoption of these Articles. Commencing at the Company’s first annual general meeting, and at each annual general meeting thereafter, Directors elected to succeed those Directors whose terms expire shall be elected for a term
of office to expire at the third succeeding annual general meeting after their election. Except as the Act or other Applicable Law may otherwise require, in the interim between annual general meetings or extraordinary general meetings called for the election of Directors and/or the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal of Directors for cause, may be filled by the vote of a majority of the remaining Directors then in office, although less than a quorum (as defined in these Articles), or by the sole remaining Director. All Directors shall hold office until the expiration of their respective terms of office and until their successors shall have been elected and qualified. A Director may be reelected following the expiration of such Director’s term of office. A Director appointed to fill a vacancy resulting
from the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation or removal shall have created such vacancy and until their successor shall have been elected and qualified. Except for any increase or decrease in the number of Directors in accordance with any Issued Preferred Shares Designation, if the number of Directors is changed pursuant to Article 23.1, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible, and any additional Director of any class appointed to fill a vacancy resulting from an increase in such class or from the death, resignation or removal from office of a Director or other cause shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of Directors shorten the term of any incumbent Director. This Article
23.2 shall not apply to any Issued Preferred Shares Nonpayment Directors and the terms relating to the office of any such Issued Preferred Shares Nonpayment Directors shall be determined by the applicable Issued Preferred Shares Designation and Article 26(e) (as applicable). |
24 | Powers of Directors |
24.1 | Subject to the provisions of the Act, the Memorandum and these Articles and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction had not been given. |
24.2 | Without limiting the generality of Article 24.1, and subject to the provisions of the Act, the Memorandum and these Articles and to any directions given by Special Resolution, the Directors shall have full power and authority to do, and to direct or delegate their power to the Officers to do, all things and on such terms as it determines to be necessary or appropriate to conduct the business of the Company, including the following: |
(a) | the
making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into Shares, and the incurring of any other obligations; |
(b) | the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Company; |
(c) | the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of
any or all of the assets of the Company or the merger or other combination of the Company with or into another Person (subject, however, to any prior approval of Members that may be required under these Articles or the Act); |
(d) | the adoption, amendment, revision or termination of any policies or guidelines with respect to acquisitions or investments made on behalf of any Group Member by an external manager of the Company (including the Manager); |
(e) | the
use of the assets of the Company (including cash on hand) for any purpose consistent with the terms of the Memorandum and these Articles, including the financing of the conduct of the operations of the Company and its Subsidiaries; the lending of funds to other Persons (including other Group Members); the repayment of obligations of the Company and its Subsidiaries; and the making of capital contributions to any Member of the Company or any of its
Subsidiaries; |
(f) | the negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Company under contractual arrangements to all or particular assets of the Company); |
(g) | the declaration and payment of distributions of cash or other
assets to Members; |
(h) | the selection and dismissal of an external manager, officers, employees, agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring, and the creation and operation of employee benefit plans, employee programs and employee practices; |
(i) | the entering into agreements and amendments thereto, including management agreements, with an external manager (including the Manager); |
(j) | the maintenance of insurance
for the benefit of the Company Group and the Indemnified Persons; |
(k) | the formation of, or acquisition or disposition of an interest in, and the contribution of property and the making of loans to, any limited or general partnership, joint venture, corporation, limited liability company or other entity or arrangement; |
(l) | the control of any matters affecting the rights and obligations of the Company, including the bringing and defending of actions at law or in equity and otherwise engaging in the
conduct of litigation, arbitration or remediation, and the incurring of legal expense and the settlement of claims and litigation; |
(m) | the indemnification of any Person against liabilities and contingencies to the extent permitted by law; |
(n) | the entering into of listing agreements with any National Securities Exchange and the delisting of some or all of the Shares from, or requesting that trading be suspended on, any such exchange; |
(o) | the issuance, sale or other disposition, and the purchase or other acquisition,
of Shares or options, rights, warrants or appreciation rights relating to Shares, including to the Manager; |
(p) | the undertaking of any action in connection with the Company’s interest or participation in any Group Member; |
(q) | the registration of any offer, issuance, sale or resale of Shares or other securities issued or to be issued by the Company under the Securities Act and any other applicable securities laws (including any resale of Shares or other securities by Members or other security holders); and |
(r) | the
execution and delivery of agreements with Affiliates of the Company or any external manager (including the Manager) to render services to a Group Member. |
24.3 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine by resolution. |
25 | Election, Appointment and Removal
of Directors |
25.1 | Subject to Articles 25.2 and 25.3, the Company may elect any person to be a Director in accordance with this Article 25.1. |
(a) | Nominations. |
(i) | by
the Directors; or |
(ii) | by a holder of Outstanding Voting Shares who holds a sufficient number of Outstanding Voting Shares to elect one or more members to the board of Directors assuming that such holder cast all of the votes it is entitled to cast in respect of its Outstanding Voting Shares in such election in favour of a single candidate and candidate received no other votes from any other holder of Outstanding Voting Shares, provided that such holder delivers written notice of such nomination to the Company not less than 90 days' and no more than 120 days' prior to the anniversary of the date of the preceding annual general meeting, and in the case of the first annual general meeting, no later than 25 February 2023 and no earlier
than 26 January 2023 and provided further that such holder is a Record Holder as at the date of such written notice. |
(b) | Presentation of Candidates. |
(c) | Election of Directors. |
25.2 | Any vacancy on the board of Directors that results from newly created directorships resulting from any increase in the authorized number of Directors in accordance with Article 23.1 may be filled by the Directors then in office, and any other vacancies may be filled by the Directors then in office, though less than a quorum, or by a sole remaining Director or,
solely in the event of the removal of the entire board of Directors, by the written consent of the holders of at least eighty percent (80%) of the voting power of the then issued and Outstanding Voting Shares. Any Director of any class elected to fill a vacancy resulting |
25.3 | Articles 25.1 and 25.2 shall not cause a Director who, upon commencing his or her service as a member of the board of Directors was determined by the Directors to be an Independent Director but did not in fact qualify as such, or who by reason of any change in circumstances ceases to qualify as an Independent Director, from serving the remainder of the term as a Director for which he or she was selected, and no action of the board of Directors shall be invalid by reason of the
failure at any time of a majority of the members of the board of Directors to be Independent Directors. |
25.4 | Any Director may be removed for Cause by the affirmative vote of holders of at least eighty percent (80%) of the then Outstanding Voting Shares at a general meeting of the Company. |
25.5 | This Article 25 shall not apply to any Issued Preferred Shares Nonpayment Directors and the terms relating to the appointment and removal of any such Issued Preferred Shares Nonpayment Directors shall be determined by the applicable Issued Preferred Shares Designation and Article 26(e) (as
applicable). |
26 | Vacation of Office of Director |
(a) | the Director gives notice in writing to the Company or the Chairman, the Chief Executive Officer or the Secretary that they resign the office of Director; or |
(b) | the Director dies, becomes
bankrupt or makes any arrangement or composition with their creditors generally; or |
(c) | the Director is found to be or becomes of unsound mind; or |
(d) | removed for cause in accordance with Article 25.4; or |
(e) | upon the termination of the term of office of any Issued Preferred Shares Nonpayment Director in accordance with the applicable Issued Preferred Shares Designation, |
27 | Proceedings of Directors |
27.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority of the Directors then in office. |
27.2 | Subject to the provisions of these Articles, the Directors may regulate
their proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the Chairperson shall not have a second or casting vote. |
27.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairperson is located at the start of the meeting. |
27.4 | A
resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. |
27.5 | The Chairman, the Chief Executive Officer or any two Directors may, or other Officer on the direction of such persons shall, call a meeting of the Directors by at least 24 hours' notice in writing to every Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a meeting of the Directors all the provisions of these Articles relating to the giving of notices by the
Company to the Members shall apply mutatis mutandis. |
27.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
27.7 | The Directors may elect
a Chairperson of their board and determine the period for which they are to hold office; but if no such Chairperson is elected, or if at any meeting the Chairperson is not present within five minutes after the time appointed for the meeting to commence, the Directors present may choose one of their number to be chairperson of the meeting. The Chairperson, who must be a Director (but is not required to be an employee of the Company) shall be designated by the Directors and, except where by law the signature of the Chief Executive Officer is required, the Chairperson shall possess the same power as the Chief Executive Officer to sign all contracts, certificates and other instruments of the Company that may be
authorized by the Directors. During the absence or disability of the Chief Executive Officer, the Chairperson shall exercise all the powers and discharge all the duties of the Chief Executive Officer. The Chairperson shall also perform such other duties and may exercise such other powers as may from time to time be assigned by the Directors. |
27.8 | All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled
to vote, as the case may be. |
27.9 | A Director may be represented at any meetings of the board of Directors by a proxy appointed in writing by that Director. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director. |
28 | Presumption of Assent |
29 | Directors' Interests |
29.1 | A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with their office of Director for
such period and on such terms as to remuneration and otherwise as the Directors may determine. |
29.2 | A Director may act on their own or by, through or on behalf of their firm in a professional capacity for the Company and they or their firm shall be entitled to remuneration for professional services as if they were not a Director. |
29.3 | A Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the
Company may be interested as a shareholder, a contracting party or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by them as a director or officer of, or from their interest in, such other company. |
29.4 | No person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the
Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which they are interested provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by them at or prior
to its consideration and any vote thereon. |
29.5 | A general notice that a Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which they have an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction. |
30 | Minutes |
31 | Delegation of Directors' Powers |
31.1 | The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance Committee). Any such delegation may be made subject to any conditions the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by these Articles regulating the proceedings of Directors, so far as they are capable of applying. Any Director serving on a committee of Directors may be removed from such committee at any time by the Directors. |
31.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of the
Company and may appoint any person to be a member of such committees, local boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of any such committee, local board or agency shall be governed by these Articles regulating the proceedings of Directors, so far as they are capable of applying. |
31.3 | The Directors shall adopt formal written charters for committees. Each of these committees shall be empowered to do all things necessary to exercise the rights of such committee set forth in these Articles and shall have such powers as the Directors may delegate pursuant to these Articles
and as required by the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall consist of such number or qualification of Directors as the Directors shall from time to time determine (or such minimum number or qualification as may be required from time to time by the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law). For so long as any class of Shares is listed on the Designated Stock Exchange, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall be made up of such number of Independent Directors as is required from time to time by the rules and regulations of the Designated Stock Exchange,
the Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
31.4 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time. |
31.5 | The
Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised
signatory to delegate all or any of the powers, authorities and discretions vested in them. |
31.6 | Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Company may be executed in the name of and on behalf of the Company by the Chief Executive Officer, the Chief Financial Officer, the Secretary or any other officer authorized to do so by the Directors and any such officer may, in the name of and on behalf of the
Company, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Company may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Company might have exercised and possessed if present. The Directors may, by resolution, from time to time confer like powers upon any other person or persons. |
31.7 | The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration and to perform such duties,
and subject to such provisions as to disqualification and removal as the Directors may think fit. The Officers are not required to hold Shares, and other than the Chairperson, are not required to be Directors. Without limiting the generality of the foregoing, and in addition to the election of the Chairperson, the Directors may appoint the following Officers with the following powers and authorisations in respect of the Company: |
(a) | Chief Executive Officer. |
(b) | Chief
Financial Officer. |
(c) | Secretary. |
31.8 | Unless otherwise specified in the terms of their appointment an Officer may be removed by the Directors, with or without cause. An Officer
may vacate their office at any time if the Officer gives notice in writing to the Company or the Chairman, the Chief Executive Officer or the Secretary that they resign their office. |
31.9 | Any Person dealing with the Company shall be entitled to assume that the Directors and any officer authorized by the Directors to act on behalf of and in the name of the Company has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Company
and to enter into any authorized contracts on behalf of the Company, and such Person shall be entitled to deal with the Directors or any officer of the Company as if it were the Company’s sole party in interest, both legally and beneficially. In no event shall any Person dealing with the Directors or any officer or its representatives be obligated to ascertain that the provisions of these Articles have been complied with or to inquire into the necessity or expedience of any act or action of the Directors or any officer or its representatives. Each and every certificate, document or other instrument executed on behalf of
the Company by the Directors or any officer of the Company or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, these Articles were in full force and effect, (b) the Person executing and delivering |
32 | No
Minimum Shareholding |
33 | Remuneration of Directors |
33.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall determine. The Directors shall also be entitled to be paid all travelling,
hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly the other. |
33.2 | The Directors may by resolution approve
additional remuneration to any Director for any services which in the opinion of the Directors go beyond that Director's ordinary routine work as a Director. Any fees paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to their remuneration as a Director. |
34 | Seal |
34.1 | The Company may, if the Directors so determine, have a Seal. Save as expressly provided otherwise in these Articles, the Seal shall
only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by the Directors for the purpose. |
34.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a fax of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used. |
34.3 | A
Director or Officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over their signature alone to any document of the Company required to be authenticated by them under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
35 | Dividends, Distributions and Reserve |
35.1 | Subject to the Act and this Article and except as otherwise provided by the rights attached to any Shares, the Directors may
resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law. |
35.2 | Except as otherwise provided by the rights attached to any Shares,
all Dividends and other distributions shall be paid to Members in accordance with their respective Percentage Interests. If any Share is issued on terms providing that it shall rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
35.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money (if any) then payable by the Member to the Company on account of calls or otherwise. In addition, the Directors may withhold from payments or other distributions to the Members, and pay over to any U.S. federal, state or local government or any foreign government, any amounts required to be so withheld |
35.4 | The
Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner as may seem expedient to the Directors. |
35.5 | Except as otherwise provided by the
rights attached to any Shares, Dividends and other distributions may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required and how any costs involved are to be met. |
35.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
35.7 | Any
Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
35.8 | No Dividend or other distribution shall bear interest against the
Company. |
35.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited
and shall revert to the Company. |
35.10 | Notwithstanding anything to the contrary in this Article 35, the Company shall not make or pay any distributions of cash or other assets with respect to the Issued Preferred Shares except for distributions expressly provided for by, and in accordance with, the applicable Issued Preferred Shares Designation. |
36 | Capitalisation |
37 | Books of Account |
37.1 | The Directors shall cause proper books of account (including, where applicable, material underlying documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the
Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. The books of the Company shall be maintained, for tax and financial reporting purposes, on an accrual basis in accordance with U.S. generally accepted accounting principles. Such books of account must be retained for a minimum period of five years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company's
affairs and to explain its transactions. |
37.2 | Subject to Article 37.4, the Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Act or authorised by the Directors or by the Company in general meeting. |
37.3 | Subject
to Article 37.4, the Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
37.4 | This Article 37.4 shall only apply with respect to Issued Preferred Shares for so long as the Company (i) is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or (ii) otherwise reports on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the Commission, after which time reporting obligations
of the Company with respect to the Issued Preferred Holders shall be governed by Section 2.9 of the applicable Issued Preferred Shares Designation. As soon as practicable: |
(a) | but in no event later than 120 days after the close of each fiscal year of the Company, the Directors shall cause to be mailed or made available to each Record Holder of a Share, as of a date selected by the Directors, an annual report containing financial statements of the Company for such fiscal year of the
Company, presented in accordance with U.S. generally accepted accounting principles, including a balance sheet and statements of operations, equity and cash flows, such statements to be audited by a registered public accounting firm selected by the Directors; and |
(b) | but in no event later than 90 days after the close of each Quarter except the last Quarter of each fiscal year, the Directors shall cause to be mailed or made available to each Record Holder of a Share, as of a date selected by the Directors, a report containing unaudited financial statements of the Company and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Shares are listed for trading,
or as the Directors determines to be necessary or appropriate. |
38 | Audit |
38.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors determine. |
38.2 | Without prejudice to the freedom of the Directors to establish any other committee, if the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations
of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
38.3 | If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an
appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit Committee for the review and approval of potential conflicts of interest. |
38.4 | The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists). |
38.5 | If the office of Auditor becomes vacant by resignation or death of the Auditor, or by their becoming incapable of acting by reason of illness or other disability at a time when their services are required, the Directors shall fill the vacancy and determine the remuneration of such Auditor. |
38.6 | Every
Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as may be necessary for the performance of the duties of the Auditor. |
38.7 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary
company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members. |
39 | Notices |
39.1 | Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, telex, fax or email to such Member or to such Member's address as shown in the Register of Members (or where the notice is given by email
by sending it to the email address provided by such Member). Notice may also be served by Electronic Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Commission and/or any other competent regulatory authority or by placing it on the Company’s Website. |
39.2 | Where a notice is sent by: |
(a) | courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall be deemed
to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier; |
(b) | post; service of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted; |
(c) | telex or fax; service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that
it was transmitted; |
(d) | email or other Electronic Communication; service of the notice shall be deemed to be effected by transmitting the email to the email address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt of the email to be acknowledged by the recipient; and |
(e) | placing it on the Company’s Website; service of the notice shall be deemed to have been
effected one hour after the notice or document was placed on the Company’s Website. |
39.3 | A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under these Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. |
39.4 | Notice of every general meeting shall be given in any manner authorised by these Articles to every holder of Shares carrying an entitlement to receive such notice on the Record Date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the |
40 | Winding Up |
40.1 | Winding
Up. |
(a) | a determination to wind up the Company by the board of Directors and the approval of the Company by Special Resolution; and |
(b) | the sale, exchange or other disposition
of all or substantially all of the assets and properties of the Company and the approval of the Company by Special Resolution. |
40.2 | Liquidator. |
40.3 | Liquidation. |
(a) | Subject to Article 40.3(c), the assets may be disposed of by public or private sale or by distribution in kind to one or more Members on such terms as the Liquidator and such Member or Members may agree. If any property is distributed
in kind, the Member receiving the property shall be deemed for purposes of Article 40.3(c) to have received cash equal to its fair market value; and contemporaneously therewith, appropriate cash distributions must be made to the other Members. Notwithstanding anything to the contrary contained in these Articles, the Members may be compelled to accept a distribution of any asset in kind from the Company despite the fact that the percentage of the asset distributed to such Member exceeds the percentage of that asset which is equal to the percentage in which such Member shares in distributions from the Company. The Liquidator may defer liquidation or distribution of the Company’s assets for a reasonable time if it
determines that an immediate sale or distribution of all or some of the Company’s assets would be impractical or would cause undue loss to the Members. The Liquidator may distribute the Company’s assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the Members. |
(b) | Liabilities of the Company include amounts owed to the Liquidator as compensation for serving in such capacity (subject to the terms of Article 40.2) and amounts to Members otherwise than in respect of their distribution rights under Article
35. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be applied to other liabilities or distributed as additional liquidation proceeds. |
(c) | Subject to the terms of any Share Designation (including the Issued Preferred Shares Designations) and the making of any payments required thereunder, all property and all cash in excess of that required to discharge liabilities as provided in Article 40.3(b) shall be distributed to the Members in accordance with their respective Percentage Interests. |
40.4 | No
Partition. |
41 | Indemnity and Insurance |
41.1 | Every Indemnified Person shall, to the maximum extent permitted by law, be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any
of them may incur as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default, and provided further that such Indemnified Person acted in good faith and in a manner such Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company and had no reasonable cause to believe such Indemnified Person's conduct was unlawful. No Indemnified Person shall, to the maximum extent permitted by law, be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of their functions unless
that liability arises through the actual fraud, wilful neglect or wilful default of such Indemnified Person, and provided further that such Indemnified Person acted in good faith and in a manner such Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company and had no reasonable cause to believe such Indemnified Person's conduct was unlawful. No person shall be found to have committed actual fraud, wilful neglect or wilful default, or acted otherwise than in good faith and in a manner such Indemnified Person did not reasonably believe to be in or not opposed to the best interests of the Company and had reasonable cause to believe such Indemnified Person's conduct was unlawful under this Article, unless or until a court of competent jurisdiction shall have
made a finding to that effect. |
41.2 | The
Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall
be promptly returned to the Company (without interest) by the Indemnified Person. |
41.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company. |
42 | Financial
Year |
43 | Transfer by Way of Continuation |
44 | Mergers and Consolidations |
44.1 | Authority. |
44.2 | Procedure for Mergers and Consolidations. |
(a) | the names and jurisdictions of formation or organization of each of the constituent entities
proposing to merge or consolidate; |
(b) | the name and jurisdiction of formation or organization of the constituent entity that is to survive the proposed merger or consolidation (the “Surviving Entity”); |
(c) | the terms and conditions of the proposed merger or consolidation; |
(d) | the manner and basis of exchanging or converting the rights or securities of, or interests in, each constituent entity for, or into, cash, property, rights, or securities of or interests in, the Surviving Entity; and if
any rights or securities of, or interests in, any constituent entity are not to be exchanged or converted solely for, or into, cash, property, rights, or securities of or interests in, the Surviving Entity, the cash, property, rights, or securities of or interests in, any company or other business entity which the holders of such rights, securities or interests are to receive, if any; |
(e) | a statement of any changes in the constituent documents or the adoption of new constituent documents of the Surviving Entity to be effected by such merger or consolidation; |
(f) | the effective time of the merger, which may be the date of the merger filings or a later date specified
in or determinable in accordance with the Merger Agreement (provided, that if the effective time of the merger is to be later than the date of the merger filings, the effective time shall be fixed no later than the time of the merger filings or the time stated therein); and |
(g) | such other provisions with respect to the proposed merger or consolidation that the Directors determine to be necessary or appropriate. |
44.3 | Approval by Members. |
(a) | The Directors, upon their approval of the Merger Agreement shall
convene and hold a general meeting of the Common Members in accordance with these Articles to seek their approval, by Special Resolution, of the Merger Agreement. A copy or a summary of the Merger Agreement shall be included in or enclosed with the notice of meeting. |
(b) | The Merger Agreement shall be approved by the Members by Special Resolution unless the Merger Agreement contains any provision that, if contained in an amendment to these Articles, the provisions of these Articles or the Act would require for its approval (i) the vote or consent of a greater percentage of the Outstanding Voting Shares or (ii) of any holders of any series of Preferred Shares, in which case such greater percentage vote or consent (or such vote or consent of such holders of Preferred Shares, in accordance with the terms of the applicable
Share Designations and the Act) shall additionally be required for approval of the Merger Agreement. |
(c) | After such approval of the Members as provided by Article 44.3(b), and at any time prior to the merger filings, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement. |
(d) | Members are not entitled to dissenters’ rights of appraisal in the event of a sale of all or substantially all of the assets of the Company or the Company’s
Subsidiaries, or any other similar transaction or event. |
(e) | The Directors may not cause the Company to sell, exchange or otherwise dispose of all or substantially all of its assets, in one transaction or a series of related transactions, or approve on behalf of the |
(f) | Each merger or consolidation approved pursuant to this Article 44 shall provide that all holders of Common Shares shall be entitled to receive the same consideration pursuant to such transaction with respect to each of their Common Shares. |
44.4 | Corporate Treatment. |
44.5 | Preferred Shares. |
(a) | the provisions of Article 44.3 are not applicable to the Issued Preferred Shares or the Issued Preferred Holders
except as otherwise expressly provided in Article 44.3(b)(ii); |
(b) | voting, approval and consent rights of the Issued Preferred Holders shall be solely as provided for and set forth in the applicable Issued Preferred Shares Designation; |
(c) | the Issued Preferred Holders shall have no voting, approval or consent rights under this Article 44 except as otherwise expressly provided in Article 44.3(b)(ii); and |
(d) | any rights of the Issued Preferred Holders in the event of a merger, consolidation or sale of assets of the
Company shall be solely as set forth in the applicable Issued Preferred Shares Designation or as otherwise required by applicable law. |
45 | Outside Activities |
45.1 | Definitions. |
(a) | “Affiliate” means, with respect to a given person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with, such person; provided, however, that for purposes of this definition and this Article 45, none of (i) the FTAI Entities and any entities (including corporations, partnerships, limited liability companies or other persons) in which such FTAI Entities hold, directly or indirectly, an ownership interest, on the one hand, or (ii) the Fortress Members and their Affiliates (excluding any FTAI Entities or other entities described in clause (i)), on the other hand, shall be deemed to be “Affiliates” of one another. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as applied to any person, means the possession, directly or indirectly, of beneficial ownership of, or the power to vote, 10% or more of
the securities having voting power for the election of directors (or other persons acting in similar capacities) of such Person or the power otherwise to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise. |
(b) | “beneficially own” and “beneficial ownership” and similar terms used herein shall be determined in accordance with Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934. |
(c) | “Corporate Opportunity”
shall include, but not be limited to, business opportunities that the Company is financially able to undertake, which are, from their nature, in the line of the Company’s business, are of practical advantage to it and are ones in which the Company has an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of the Fortress Members or any of their Affiliates or their officers or directors will be brought into conflict with that of any of the FTAI Entities or their Affiliates. |
(d) | “FTAI Entities”
means the Company and its Subsidiaries, and “FTAI Entity” shall mean any of the FTAI Entities. |
(e) | “Fortress Affiliate Members” shall mean (A) any Director who may be deemed an Affiliate of Fortress Investment Group LLC (“FIG”) or the Manager, (B) any director or officer of FIG or its Affiliates or the Manager or its Affiliates and (C) any investment funds (including any managed accounts) managed directly or indirectly by FIG or its Affiliates or the Manager or its Affiliates. |
(f) | “Fortress
Members” shall mean (i) each Fortress Affiliate Member, (ii) each Permitted Transferee and (iii) the Manager. |
(g) | “Governmental Entity” shall mean any national, state, provincial, municipal, local or foreign government, any court, arbitral tribunal, administrative agency or commission, or other governmental or regulatory authority, commission, or agency, or any non-governmental, self-regulatory authority, commission, or agency. |
(h) | “Judgment” shall mean any order, writ, injunction, award, judgment, ruling, or decree of any Governmental Entity. |
(i) | “Law”
shall mean any statute, law, code, ordinance, rule, or regulation of any Governmental Entity. |
(j) | “Lien” shall mean any pledge, claim, equity, option, lien, charge, mortgage, easement, right-of-way, call right, right of first refusal, “tag”- or “drag”- along right, encumbrance, security interest, or other similar restriction of any kind or nature whatsoever. |
(k) | “Permitted Transferee” shall mean, with respect to each Fortress Member, (i) any other Fortress Member, (ii) such Fortress Member’s Affiliates and (iii) in the case of any Fortress Member, (A) any member or general or limited partner of such Fortress
Member (including any member of the Initial Members), (B) any corporation, partnership, limited liability company, or other entity that is an Affiliate of such Fortress Member or any member, general or limited partner of such Fortress Member (collectively, “Fortress Member Affiliates”), (C) any investment funds managed directly or indirectly by such Fortress Member or any Fortress Member Affiliate (a “Fortress Member Fund”), (D) any general or limited partner of any Fortress Member Fund, (E) any managing director, general partner, director, limited partner, officer, or employee of any Fortress Member Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee, or beneficiary of any of the foregoing persons described in this clause (E) (collectively, “Fortress Member Associates”), or (F) any trust, the beneficiaries of which, or any corporation, limited
liability company or partnership, the stockholders, members or general or limited partners of which, consist solely of any one or more of such Fortress Members, any general or limited partner of such Fortress Members, any Fortress Member Affiliates, any Fortress Member Funds, any Fortress Member Associates, their spouses or their lineal descendants. |
(l) | “Restriction” with respect to any share, capital stock, partnership interest, membership interest in a limited liability company, or other equity interest or security, shall mean any voting or other trust or agreement, option, warrant, preemptive right, right of first offer, right of first refusal, escrow arrangement, proxy, buy-sell agreement, power of attorney
or other contract, any Law, license, permit, or Judgment that, conditionally or unconditionally, (i) grants to any Person the right to purchase or otherwise acquire, or obligates any Person to sell or otherwise dispose of or issue, or otherwise results or, whether upon the occurrence of any event or with notice or lapse of time or both or otherwise, may result in any Person acquiring, (A) any of such capital stock, partnership interest, membership interest in a limited liability company, or other equity interest or security, (B) any of the proceeds of, or any distributions paid or that are or may become payable with respect to, any of such capital stock, partnership interest, membership interest in a limited liability company, or other equity interest or security, or (C) any interest in such capital stock, partnership interest, membership interest in a limited liability company,
or other equity interest or security or any such proceeds or distributions, (ii) restricts or, whether upon the occurrence of any event or with notice or lapse of time or both or otherwise, is reasonably likely to restrict the transfer or voting of, or the exercise of any rights or the enjoyment of any benefits arising by reason of ownership of, any such capital stock, partnership interest, membership interest in a limited liability company, or other equity interest or security or any such proceeds or distributions or (iii) creates or, whether upon the occurrence of any event or with notice |
(m) | “Subsidiary” with respect to any Person means: (i) a company or corporation, a majority
of whose shares or capital stock with voting power, under ordinary circumstances, to elect Directors is at the time, directly or indirectly owned by such person, by a Subsidiary of such person, or by such Person and one or more Subsidiaries of such person, without regard to whether the voting of such shares or capital stock is subject to a voting agreement or similar Restriction, (ii) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (A) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (B) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability
company or (iii) any other Person (other than a company or corporation) in which such Person, a Subsidiary of such Person or such Person and one or more Subsidiaries of such person, directly or indirectly, at the date of determination thereof, has (A) the power to elect or direct the election of a majority of the members of the governing body of such Person (whether or not such power is subject to a voting agreement or similar restriction) or (B) in the absence of such a governing body, a majority ownership interest. |
45.2 | Related Business Activities. |
45.3 | Corporate Opportunity. |
45.4 | Directors, Officers and Employees. |
45.5 | Agreements with Fortress Members. |
45.6 | Ambiguity. |
45.7 | Application of Article. |
45.8 | No reduction. |
46 | Exclusive Jurisdiction and Forum |
46.1 | Unless
the Company consents in writing to the selection of an alternative forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with the Memorandum, these Articles or otherwise related in any way to each Member's shareholding in the Company, including but not limited to: |
(a) | any derivative action or proceeding brought on behalf of the Company; |
(b) | any
action asserting a claim of breach of any fiduciary or other duty owed by any current or former Director, Officer or other employee of the Company to the Company or the Members; |
(c) | any action asserting a claim arising pursuant to any provision of the Act, the Memorandum or these Articles; or |
(d) | any action asserting a claim against the Company governed by the “Internal Affairs Doctrine” (as such concept
is recognised under the laws of the United States of America). |
46.2 | Each Member irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or disputes. |
46.3 | Without prejudice to any other rights or remedies that the Company may have, each Member acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum and that accordingly the Company shall be entitled, without
proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum. |
46.4 | This Article 46 shall not apply to any action or suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any claim for which the federal district courts of the United States of America are, as a matter of the laws of the United States, the sole and exclusive forum for determination of such a claim. |
47 | Conflicts |
Number | | | Common
Shares |
[Certificate Number] | | | [Number of Shares] |
| | ||
Chief
Financial Officer | | | Chief Executive Officer |
Duly authorised officers of the Company. | | |
Number [Certificate
Number] | | | 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares [Number of Shares] |
| | ||
Chief
Financial Officer | | | Chief Executive Officer |
Duly authorised officers of the Company. | | |
Number [Certificate
Number] | | | 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares [Number of Shares] |
| | ||
Chief
Financial Officer | | | Chief Executive Officer |
Duly authorised officers of the Company. | | |
Number [Certificate
Number] | | | 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares [Number of Shares] |
| | ||
Chief
Financial Officer | | | Chief Executive Officer |
Duly authorised officers of the Company. | | |
1 | Definitions |
1.1 | Definitions. |
(a) | “Articles” has the meaning assigned to such term in the introduction to this Series A Preferred Share Designation. |
(b) | “Calculation
Agent” means the calculation agent for the Series A Preferred Shares, which shall be appointed by the Company prior to the commencement of the Floating Rate Period and shall be a third party independent financial institution of national standing with experience providing services as a calculation agent. |
(c) | “Change of Control” means the occurrence of the following: |
(i) | any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares representing more than 50.0% of the voting power of the Company’s Voting Equity Interests; or |
(ii) | (A) all or substantially all the assets of the Company and the Restricted Subsidiaries, taken as a whole, are sold or otherwise transferred to any person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (B) the Company consolidates, amalgamates
or merges with or into another person or any person consolidates, amalgamates or merges with or into the Company, in either case under this clause (ii), in one transaction or a series of related transactions in which immediately after the consummation thereof persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing in the aggregate a majority of the total voting power of the Voting Equity Interests of the Company immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing a majority of the total voting power of the Voting Equity Interests of the Company,
or the applicable surviving or transferee person; provided that this clause shall not apply (I) in the case where immediately after the consummation of the transactions Permitted Holders, directly or indirectly, beneficially own Voting Equity Interests representing in the aggregate a majority of the total voting power of the Company, or the applicable surviving or transferee person, or (II) to any consolidation, amalgamation or merger of the Company with or into (1) a corporation, limited liability company or partnership or (2) a wholly-owned subsidiary of a corporation, limited liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no person or group (other than Permitted Holders), which beneficially owns Voting Equity Interests
representing 50.0% or more of the voting power of the total outstanding Voting Equity Interests of such entity. |
(d) | “Company” has the meaning assigned to such term in the introduction to this Series A Preferred Share Designation. |
(e) | “Distribution Determination Date” has
the meaning assigned to such term in Section 2.3(a) of this Series A Preferred Share Designation. |
(f) | “Distribution Payment Date” means March 15, June 15, September 15 and December 15 of each year, beginning on [ ]1, 2022, as may be adjusted during the Floating Rate Period pursuant to Section 2.3(b) of this Series A Preferred Share Designation. |
(g) | “Distribution Period” means the period from, and including, each Distribution Payment Date to, but excluding, the next succeeding Distribution Payment Date, except for the initial Distribution Period, which will be the period from, and including, [ ]2,
2022, to, but excluding, [ ]3, 2022. |
(h) | “Equity Interests” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership, limited liability company or business trust, partnership, membership or beneficial interests (whether general or limited) or shares in the capital of a company; (d) in the case of an exempted company, shares in the capital of the company; and (e) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing person (but excluding from the foregoing any debt securities convertible into Equity Interests, whether or not such debt securities include any right of participation with Equity Interests). |
(i) | “Fixed Rate Period” has the meaning set forth in Section 2.3(a) of this Series A Preferred Share Designation. |
(j) | “Floating Rate Period” has the meaning set forth in Section 2.3(a) of this Series A Preferred Share Designation. |
(k) | “IFA”
has the meaning assigned to such term in the definition of “Three-Month LIBOR.” |
(l) | “Junior Securities” means the Common Shares and any other class or series of the Company’s Equity Interests over which the Series A Preferred Shares have preference or priority in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(m) | “LIBOR Event” has the meaning assigned to such term in the
definition of “Three-Month LIBOR.” |
(n) | “Liquidation” has the meaning assigned to such term in Section 2.8(a) of this Series A Preferred Share Designation. |
(o) | “London Banking Day” means any day on which commercial banks are open for dealings in deposits in U.S. dollars in the London interbank market. |
(p) | “Nonpayment” has the meaning set forth in Section 2.7(b)(i) of this Series A Preferred Share Designation. |
(q) | “Other
Voting Preferred Shares” has the meaning assigned to such term in Section 2.7(b)(i) of this Series A Preferred Share Designation. |
1 | NTD: to be the first distribution payment date following adoption of Articles. |
2 | NTD:
to be the last distribution payment date prior to adoption of Articles. |
3 | NTD: to be the first distribution payment date following adoption of Articles. |
(r) | “Parity Securities” means any class or series of the Company’s Equity Interests that ranks equally with the Series A Preferred Shares in the payment of distributions and in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(s) | “Rating
Event” means a change by any rating agency to the criteria employed by such rating agency as of September 12, 2019 for purposes of assigning ratings to securities with features similar to the Series A Preferred Shares, which change results in (i) any shortening of the length of time for which the criteria in effect as of September 12, 2019 are scheduled to be in effect with respect to the Series A Preferred Shares, or (ii) a lower equity credit being given to the Series A Preferred Shares than the equity credit that would have been assigned to the Series A Preferred Shares by such rating agency pursuant to the criteria in effect as of September 12, 2019. |
(t) | “Senior
Securities” means any class or series of the Company’s Equity Interests that has preference or priority over the Series A Preferred Shares in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(u) | “Series A Holder” means, with respect to any Series A Preferred Shares, the Record Holder of such Series A Preferred Shares. |
(v) | “Series A Liquidation Preference” means US$25.00 per
Series A Preferred Share. |
(w) | “Series A Nonpayment Board Expansion” has the meaning assigned to such term in Section 2.7(b)(i) of this Series A Preferred Share Designation. |
(x) | “Series A Nonpayment Directors” has the meaning assigned to such term in Section 2.7(b)(i) of this Series A Preferred Share Designation. |
(y) | “Series A Nonpayment Meeting” has the meaning assigned to such term in Section 2.7(b)(i) of this Series A Preferred Share Designation. |
(z) | “Series
A Preferred Share” means a 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Share of a par value of US$0.01 in the capital of the Company having the designations, preferences, rights, powers and duties set forth in this Series A Preferred Share Designation and the Articles to which this Series A Preferred Share Designation forms a part. |
(aa) | “Series A Record Date” means, with respect to any Distribution Payment Date, the 1st calendar day of the month of such Distribution Payment Date or such other record date fixed by the Directors as the Record Date for such Distribution Payment Date that is not more than 60 nor less than 10 days prior to such Distribution Payment Date. |
(bb) | “Tax
Redemption Event” means, after September 12, 2019, due to (a) an amendment to, or a change in official interpretation of, the Code, Treasury Regulations promulgated thereunder, or administrative guidance or (b) an administrative or judicial determination, (i) the Company is advised by nationally recognized counsel or a “Big Four” accounting firm that the Company will be treated as an association taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax (other than any tax imposed pursuant to Section 6225 of the Code, as amended by the Bipartisan Budget Act of 2015), or (ii) the Company files an IRS
Form 8832 (or successor form) electing that the Company be treated as an association taxable as a corporation for U.S. Federal income tax purposes. |
(cc) | “Three-Month LIBOR” means the London interbank offered rate for deposits in U.S. dollars for a three month period (the “Three-Month LIBOR Rate”), as that rate is displayed on Bloomberg on page BBAM1 (or any successor or replacement page) at approximately 11:00 a.m., London time, on the relevant Distribution Determination Date, provided that: |
(i) | If no offered rate is displayed on Bloomberg
on page BBAM1 (or any successor or replacement page) on the relevant Distribution Determination Date at approximately 11:00 a.m., London time, then the Calculation Agent, in consultation with the Company, will select four major banks in the London interbank market and will request each of their principal London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least |
(ii) | If at least two quotations are not provided pursuant to paragraph (i) of this definition, the
Calculation Agent, in consultation with the Company, will select three major banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the Distribution Determination Date for loans in U.S. dollars to leading European banks for a three month period for the applicable Distribution Period in an amount of at least US$1,000,000. If three quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(iii) | If at least three quotations are not provided pursuant to paragraph (ii) of this definition, Three-Month LIBOR for the next Distribution Period
will be equal to Three-Month LIBOR in effect for the then-current Distribution Period or, in the case of the first Distribution Period in the Floating Rate Period, the most recent Three-Month LIBOR Rate on which Three-Month LIBOR could have been determined in accordance with the first sentence of this paragraph had the distribution rate been a floating rate during the Fixed Rate Period. |
(A) | If
the Calculation Agent determines on the relevant Distribution Determination Date that LIBOR has been discontinued or is no longer viewed as an acceptable benchmark for securities like the Series A Preferred Shares (a “LIBOR Event”), then the Calculation Agent will use a substitute or successor base rate that it has determined, in consultation with the Company, is the most comparable to LIBOR; provided that if the Calculation Agent determines there is an industry-accepted substitute or successor base rate, then the Calculation Agent shall use such substitute or successor base rate; and |
(B) | If the Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing, the Calculation
Agent, in consultation with the Company, may determine what business day convention to use, the definition of business day, the Distribution Determination Date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to LIBOR, or any adjustment to the applicable spread thereon, in a manner that is consistent with industry-accepted practices for such substitute or successor base rate. |
(dd) | “Three-Month LIBOR Rate” has the meaning assigned to such term in the definition of “Three-Month LIBOR.” |
2 | Terms, Rights, Powers, Preferences and Duties of Series A Preferred Shares |
2.1 | Designation. |
2.2 | Initial Issuance; Additional Shares. |
2.3 | Distributions. |
(a) | Distribution Rate. |
(i) | Each Series A Holder will be entitled to receive, with respect to each Series A Preferred Share held by such Series A Holder, only when, as, and if declared by the Directors, out of funds legally available for such purpose, cumulative cash distributions based on the Series A Liquidation Preference, at a rate equal to (i) from, and including, [ ]6,
2022 to, but excluding, September 15, 2024 (the “Fixed Rate Period”), 8.25% per annum, and (ii) beginning September 15, 2024 (the “Floating Rate Period”), Three-Month LIBOR plus a spread of 688.6 basis points per annum. |
(ii) | The distribution rate for each Distribution Period in the Floating Rate Period will be determined by the Calculation Agent using Three-Month LIBOR as in effect on the second London Banking Day prior to the beginning of the Distribution Period, which date is referred to as the “Distribution Determination Date” for the relevant Distribution Period. The Calculation Agent then will add Three-Month LIBOR as determined on the Distribution Determination
Date and the spread of 688.6 basis points and that sum will be the distribution rate for the applicable Distribution Period. Once the distribution rate for the Series A Preferred Shares is determined, the Calculation Agent will deliver that information to the Company and the Transfer Agent for the Series A Preferred Shares. Absent manifest error, the Calculation Agent’s determination of the distribution rate for a Distribution Period for the Series A Preferred Shares will be final. |
(b) | Distribution Payments. |
4 | NTD: to be the date of adoption of Articles. |
5 | NTD: to be the date
of adoption of Articles. |
6 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(c) | Conventions. |
(d) | Terms of Accrual. |
(e) | Limitations following Non-Payment of Distributions. |
(i) | no distribution
will be declared and paid or set aside for payment on any Junior Securities (other than a distribution payable solely in Junior Securities); |
(ii) | no Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company, or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities pursuant
to a binding agreement existing prior to September 12, 2019), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(iii) | no Parity Securities will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or exchange
all, or a pro rata portion of Series A Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
7 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(f) | Shorter Distribution Periods for Junior Securities or Parity Securities. |
(g) | Distribution in Arrears. |
(i) | Accumulated distributions in arrears on Series A Preferred Shares for any past Distribution Period may be declared by the Directors and paid on any date fixed by the Directors, whether or not a Distribution Payment Date, to Series A Holders
on the Record Date for such payment, which may not be less than 10 days before such distribution. Any such payment shall be made in accordance with Section 2.3(b) of this Series A Preferred Share Designation. |
(ii) | Subject to the next succeeding sentence, if all accumulated distributions in arrears on all Series A Preferred Shares and any Parity Securities have not been declared and paid, or sufficient funds for the payment thereof have not been set apart, payment of accumulated distributions in arrears will be made in order of their respective Distribution Payment Dates, commencing with the earliest Distribution Payment Date. If less than all distributions payable with respect to all Series A Preferred Shares and any Parity Securities are paid, any partial payment will be made pro rata with respect to the Series A
Preferred Shares and any Parity Securities entitled to a distribution payment at such time in proportion to the aggregate amounts remaining due in respect of such Series A Preferred Shares and Parity Securities at such time. |
(h) | Distribution on Junior Securities. |
2.4 | Rank. |
(a) | senior and prior to the Common Shares and any class or series of Preferred Shares that by its terms is designated as ranking junior to the Series A Preferred Shares; |
(b) | pari
passu with any class or series of Preferred Shares that by its terms is designated as ranking equal to the Series A Preferred Shares or does not state that it is junior or senior to the Series A Preferred Shares; and |
(c) | junior to any class or series of Preferred Shares that is expressly designated as ranking senior to the Series A Preferred Shares (subject to receipt of any requisite consents prior to issuance). |
2.5 | Optional Redemption; Distribution Rate Step-Up following a Change of Control. |
(a) | Optional Redemption on or after September 15, 2024. |
(b) | Optional Redemption Following a Rating Event. |
(c) | Optional Redemption following a Tax Redemption Event. |
(d) | Optional Redemption following a Change of Control; Distribution Rate Step-Up following a Change of Control. |
2.6 | Redemption
Procedures. |
(a) | If the Company elects to redeem any Series A Preferred Shares, the Company will provide notice to the Series A Holders of the Series A Preferred Shares to be redeemed, not less than 30 days and not more than 60 days before the date fixed for redemption thereof (provided, however, that if the Series A Preferred Shares are held in book-entry form through the Depositary, the Company may give this notice in any manner permitted by the Depositary). Any notice given as provided in this Section 2.6 will be conclusively presumed to have been duly given,
whether or not the Series A Holder receives such notice, and any defect in such notice or in the provision of such notice to any Series A Holder of Series A Preferred Shares designated for redemption will not affect the redemption of any other Series A Preferred Shares. Each notice of redemption shall state: |
(i) | the redemption date; |
(ii) | the redemption price; |
(iii) | if fewer than all Series A Preferred Shares are to be redeemed, the number of Series A Preferred Shares to be redeemed; and |
(iv) | the
manner in which the Series A Holders of Series A Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
(b) | If notice of redemption of any Series A Preferred Shares has been given and if the funds necessary for such redemption have been deposited by the Company in trust with a bank or the Depositary for the benefit of the Series A Holders of any Series A Preferred Shares so called for redemption, then from |
(c) | In
the case of any redemption of only part of the Series A Preferred Shares at the time Outstanding, the Series A Preferred Shares to be redeemed will be selected either pro rata or by lot. Subject to the provisions of this Series A Preferred Share Designation and applicable law, the Directors will have the full power and authority to prescribe the terms and conditions upon which Series A Preferred Shares may be redeemed from time to time. |
(d) | Any redemption of the Series A Preferred Shares pursuant to Section 2.5 shall be effected only out of funds legally available for such purpose. |
2.7 | Voting Rights. |
(a) | Generally
No Voting Rights; Votes Per Share. |
(b) | Voting
Rights Upon Nonpayment of Distributions. |
(i) | Whenever distributions on any Series A Preferred Shares are in arrears for six or more quarterly Distribution Periods, whether or not consecutive (a “Nonpayment”), the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically increased by two (any such increase, a “Series A Nonpayment Board Expansion”) if not already increased by two by reason of the appointment of Directors by the holders of any Other Voting Preferred Shares (as defined below) and the holders of Series A Preferred Shares, voting together as a single class. The Series A Holders, voting together as a single class with the holders of any series of Parity Securities then Outstanding upon which like voting
rights have been conferred and are exercisable (any such series, “Other Voting Preferred Shares”), will be entitled to vote, by the affirmative vote of a majority of the votes entitled to be cast, for the appointment of two additional Directors (“Series A Nonpayment Directors”) at a special meeting of the Series A Holders (any such meeting, a “Series A Nonpayment Meeting”) and the holders of such Other Voting Preferred Shares and at each subsequent annual meeting of Common Members at which such Series A Nonpayment Directors are up for re-appointment; provided that when all distributions accumulated on the Series A Preferred Shares for all past Distribution Periods and the then current Distribution Period shall have been fully paid, the right of Series A Holders to appoint any Directors will cease and, unless there are any Other Voting Preferred Shares that are then entitled to vote for the election
of Directors, the term of office of the Series A Nonpayment Directors will forthwith terminate, the office of such Series A Nonpayment Directors appointed by Series A Holders shall automatically be vacated and the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically reduced by two. However, the right of the Series A Holders and holders of any Other Voting Preferred Shares to appoint two additional Directors will again vest if and whenever six additional quarterly distributions have not been declared and paid, as set forth in this Section 2.7(b)(i). In no event shall the Series A Holders be entitled pursuant to these voting rights to elect a Director that would cause the Company to fail to satisfy a requirement relating to director independence of any national securities exchange or quotation system on which any class or
series of the Company’s Equity Interests is listed or quoted. For the avoidance of doubt, in no event shall the total number of Directors elected by Series A Holders and holders of any Other Voting Preferred Shares exceed two. |
(ii) | Following a Nonpayment, the Company may, and upon the written request of any Series A Holders (addressed to the Company) shall, call a Series A Nonpayment Meeting for the appointment of the Series A Nonpayment Directors by the Series A Holders and the Other Voting Preferred Shares. The
Company shall, in its sole discretion, determine a date and a Record Date for such Series A Nonpayment Meeting, provide notice of such Series A Nonpayment Meeting and conduct such Series A Nonpayment Meeting, in each case applying procedures for general meetings set out in the Articles. Any subsequent annual general meeting of Common Members at which such Series A Nonpayment Directors are up for re-appointment shall be called and held applying procedures for annual general meetings set out in the Articles as if references to (A) Members and Common Members and (B) Outstanding Voting Shares were, solely with respect to the Series A Nonpayment Directors, references to Series A Holders and to Series A Preferred Shares, mutatis mutandis. |
(iii) | If, at any time when the voting rights conferred upon
the Series A Preferred Shares are exercisable, any vacancy in the office of a Director appointed pursuant to the procedures described in this Section 2.7(b) shall occur, then such vacancy may be filled only by the remaining Director or by the affirmative vote of a majority of the votes entitled to be cast by the Series A Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series A Holders and holders of any such Other Voting Preferred Shares. Any Director appointed pursuant to the procedures described in this Section 2.7(b) may be removed at any time, with or without cause, only by the affirmative vote of Series A Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series A Holders and holders of any such Other Voting Preferred Shares, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the Series A Holders and
holders of Other Voting Preferred Shares that are then entitled to vote for the election of Directors, and may not be removed by the holders of the Common Shares |
(c) | Additional Voting Rights. |
(d) | Creation and Issuance of Parity Securities and Junior Securities. |
(e) | No Voting Rights Following Certain Redemption Events. |
(f) | Limitations. |
(i) | any increase in the amount of authorized Common Shares or authorized Preferred Shares, or any increase or decrease in the number of shares of any series of Preferred Shares, or the authorization, creation and issuance of other
classes or series of Equity Interests, in each case ranking on parity with or junior to the Series A Preferred Shares as to distributions or distribution of assets upon the Company’s liquidation, dissolution or winding up; |
(ii) | a merger or consolidation of the Company with or into another entity in which the Series A Preferred Shares remain Outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
(iii) | a merger or consolidation of the
Company with or into another entity in which the Series A Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Series A Preferred Shares. |
2.8 | Liquidation Rights. |
(a) | Upon the Company’s voluntary or involuntary liquidation, dissolution or winding up (“Liquidation”), the Series A Holders shall be entitled to be paid
out of the Company’s assets legally available for distribution to the Members, before any distribution of assets is made to holders of the Common Shares or any other Junior Securities, a liquidating distribution in the amount of the Series A Liquidation Preference per Series A Preferred Share, plus an amount equal to accumulated and unpaid distributions thereon, if any, to, but excluding, the date of such liquidation distribution, whether or not declared, plus the sum of any declared and unpaid distributions for Distribution Periods prior to the Distribution Period in which the liquidation distribution is made and any declared and unpaid distributions for the then current Distribution Period in which the liquidation distribution is made to the date of such liquidation distribution. After payment to the Series A Holder of the full amount of the liquidating distributions to which the
Series A Holders are entitled, the Series A Holders shall have no right or claim to any of the Company’s remaining assets. |
(b) | Distributions to Series A Holders will be made only to the extent that the Company’s assets are available after satisfaction of all liabilities to creditors and subject to the rights of holders of any securities ranking senior to the Series A Preferred Shares. If, in the event of a Liquidation, the Company is unable to pay full liquidating distributions to the Series A Holders in accordance with the foregoing provisions of this Section
2.8 and to all Parity Securities in accordance with the terms thereof, then the Company shall distribute its assets to those holders ratably in proportion to the liquidating distributions which they would otherwise have received. |
(c) | Nothing in this Section 2.8 shall entitle the Series A Holders to be paid any amount upon the occurrence of a Liquidation until holders of any classes or series of Senior Securities ranking, as to the distribution of assets upon a Liquidation, senior to the Series A Preferred Shares have been paid all amounts to which such classes or series of Senior Securities are entitled. |
(d) | For
the purposes of this Series A Preferred Share Designation, the Company’s merger or consolidation with or into any other entity or by another entity with or into the Company or the sale, lease, exchange or other transfer of all or substantially all of the Company’s assets (for cash, securities or other consideration) shall not be deemed to be a Liquidation. If the Company enters into any merger or consolidation transaction with or into any other entity and the Company is not the surviving entity in |
2.9 | Reports. |
2.10 | No Mandatory Redemption, Conversion, Exchange or Preemptive Rights. |
2.11 | No Other Rights. |
2.12 | Forum Selection. |
2.13 | Percentage Interest. |
2.14 | Book-Entry System. |
1 | Definitions |
1.1 | Definitions. |
(a) | “Articles” has the meaning assigned to such term in the introduction to this Series B Preferred Share Designation. |
(b) | “Calculation
Agent” means the calculation agent for the Series B Preferred Shares, which shall be appointed by the Company prior to the commencement of the Floating Rate Period and shall be a third party independent financial institution of national standing with experience providing services as a calculation agent. |
(c) | “Change of Control” means the occurrence of the following: |
(i) | any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares representing more than 50.0% of the voting power of the Company’s Voting Equity Interests; or |
(ii) | (A) all or substantially all the assets of the Company and the Restricted Subsidiaries, taken as a whole, are sold or otherwise transferred to any person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (B) the Company consolidates, amalgamates
or merges with or into another person or any person consolidates, amalgamates or merges with or into the Company, in either case under this clause (ii), in one transaction or a series of related transactions in which immediately after the consummation thereof persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing in the aggregate a majority of the total voting power of the Voting Equity Interests of the Company immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing a majority of the total voting power of the Voting Equity Interests of the Company,
or the applicable surviving or transferee person; provided that this clause shall not apply (I) in the case where immediately after the consummation of the transactions Permitted Holders, directly or indirectly, beneficially own Voting Equity Interests representing in the aggregate a majority of the total voting power of the Company, or the applicable surviving or transferee person, or (II) to any consolidation, amalgamation or merger of the Company with or into (1) a corporation, limited liability company or partnership or (2) a wholly-owned subsidiary of a corporation, limited liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no person or group (other than Permitted Holders), which beneficially owns Voting Equity Interests
representing 50.0% or more of the voting power of the total outstanding Voting Equity Interests of such entity. |
(d) | “Company” has the meaning assigned to such term in the introduction to this Series B Preferred Share Designation. |
(e) | “Distribution Determination Date” has the meaning assigned to such term in Section 2.3(a) of this Series B Preferred Share Designation. |
(f) | “Distribution
Payment Date” means March 15, June 15, September 15 and December 15 of each year, beginning on [ ]8, 2022, as may be adjusted during the Floating Rate Period pursuant to Section 2.3(b) of this Series B Preferred Share Designation. |
(g) | “Distribution Period” means the period from, and including, each Distribution Payment Date to, but excluding, the next succeeding Distribution Payment Date, except for the initial Distribution Period, which will be the period from, and including, [ ]9, 2022, to, but excluding, [ ]10, 2022. |
(h) | “Equity
Interests” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership, limited liability company or business trust, partnership, membership or beneficial interests (whether general or limited) or shares in the capital of a company; (d) in the case of an exempted company, shares in the capital of the company; and (e) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person (but excluding from the foregoing any debt securities convertible into Equity Interests, whether or not such debt securities include any right of participation with Equity Interests). |
(i) | “Fixed
Rate Period” has the meaning set forth in Section 2.3(a) of this Series B Preferred Share Designation. |
(j) | “Floating Rate Period” has the meaning set forth in Section 2.3(a) of this Series B Preferred Share Designation. |
(k) | “IFA” has the meaning assigned to such term in the definition of “Three-Month LIBOR.” |
(l) | “Junior Securities” means the Common Shares and any other class or series of the
Company’s Equity Interests over which the Series B Preferred Shares have preference or priority in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(m) | “LIBOR Event” has the meaning assigned to such term in the definition of “Three-Month LIBOR.” |
(n) | “Liquidation” has the meaning assigned to such term in Section 2.8(a) of this Series B Preferred Share Designation. |
(o) | “London
Banking Day” means any day on which commercial banks are open for dealings in deposits in U.S. dollars in the London interbank market. |
(p) | “Nonpayment” has the meaning set forth in Section 2.7(b)(i) of this Series B Preferred Share Designation. |
(q) | “Other Voting Preferred Shares” has the meaning assigned to such term in Section 2.7(b)(i) of this Series B Preferred Share Designation. |
(r) | “Parity Securities” means any class or series of the
Company’s Equity Interests that ranks equally with the Series B Preferred Shares in the payment of distributions and in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
8 | NTD: to be the first distribution payment date following adoption of Articles. |
9 | NTD:
to be the last distribution payment date prior to adoption of Articles. |
10 | NTD: to be the first distribution payment date following adoption of Articles. |
(s) | “Rating Event” means a change by any rating agency to the criteria employed by such rating agency as of November 27, 2019 for purposes of assigning ratings to securities with features similar to the Series B Preferred Shares, which change results in (i) any shortening of the length of time for which the criteria in effect as of November 27, 2019 are scheduled to be in effect with respect to the Series B Preferred
Shares, or (ii) a lower equity credit being given to the Series B Preferred Shares than the equity credit that would have been assigned to the Series B Preferred Shares by such rating agency pursuant to the criteria in effect as of November 27, 2019. |
(t) | “Senior Securities” means any class or series of the Company’s Equity Interests that has preference or priority over the Series B Preferred Shares in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(u) | “Series
B Holder” means, with respect to any Series B Preferred Shares, the Record Holder of such Series B Preferred Shares. |
(v) | “Series B Liquidation Preference” means US$25.00 per Series B Preferred Share. |
(w) | “Series B Nonpayment Board Expansion” has the meaning assigned to such term in Section 2.7(b)(i) of this Series B Preferred Share Designation. |
(x) | “Series B Nonpayment Directors” has the meaning assigned to such term in Section 2.7(b)(i) of
this Series B Preferred Share Designation. |
(y) | “Series B Nonpayment Meeting” has the meaning assigned to such term in Section 2.7(b)(i) of this Series B Preferred Share Designation. |
(z) | “Series B Preferred Share” means a 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Share of a par value of US$0.01 in the capital of the Company having the designations, preferences, rights, powers and duties set forth in this Series B Preferred Share Designation and the Articles to which this Series B Preferred Share Designation
forms a part. |
(aa) | “Series B Record Date” means, with respect to any Distribution Payment Date, the 1st calendar day of the month of such Distribution Payment Date or such other record date fixed by the Directors as the Record Date for such Distribution Payment Date that is not more than 60 nor less than 10 days prior to such Distribution Payment Date. |
(bb) | “Tax Redemption Event” means, after November 27, 2019, due to (a) an amendment to, or a change in official interpretation of, the Code, Treasury Regulations promulgated thereunder, or administrative guidance or (b) an
administrative or judicial determination, (i) the Company is advised by nationally recognized counsel or a “Big Four” accounting firm that the Company will be treated as an association taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax (other than any tax imposed pursuant to Section 6225 of the Code, as amended by the Bipartisan Budget Act of 2015), or (ii) the Company files an IRS Form 8832 (or successor form) electing that the Company be treated as an association taxable as a corporation for U.S. Federal income tax purposes. |
(cc) | “Three-Month
LIBOR” means the London interbank offered rate for deposits in U.S. dollars for a three month period (the “Three-Month LIBOR Rate”), as that rate is displayed on Bloomberg on page BBAM1 (or any successor or replacement page) at approximately 11:00 a.m., London time, on the relevant Distribution Determination Date, provided that: |
(i) | If no offered rate is displayed on Bloomberg on page BBAM1 (or any successor or replacement page) on the relevant Distribution Determination Date at approximately 11:00 a.m., London time, then the Calculation Agent, in consultation with the Company, will select four major banks in the London interbank market and will request each of their principal London offices to provide
a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least US$1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time. If at least two quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(ii) | If at least two quotations are not provided pursuant to paragraph (i) of this definition, the Calculation Agent, in consultation with the Company, will select three major banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the Distribution Determination Date for loans in U.S. dollars to leading European banks for a three month period for the
applicable Distribution Period in an amount of at least US$1,000,000. If three quotations are provided, Three-Month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest 0.00001 of 1%) of the quotations provided. |
(iii) | If at least three quotations are not provided pursuant to paragraph (ii) of this definition, Three-Month LIBOR for the next Distribution Period will be equal to Three-Month LIBOR in effect for the then-current Distribution Period or, in the case of the first Distribution Period in the Floating Rate Period, the most recent Three-Month LIBOR Rate on which Three-Month LIBOR could have been determined in accordance with the first sentence of this paragraph had the distribution rate been a floating rate during the Fixed Rate Period. |
(A) | If the Calculation Agent determines on the relevant Distribution Determination Date that LIBOR has been discontinued or is no longer viewed as an acceptable benchmark for securities like the Series B Preferred Shares (a “LIBOR Event”), then the Calculation Agent will use a substitute or successor base rate that it has determined, in consultation with the Company, is the most comparable to LIBOR; provided that if the Calculation
Agent determines there is an industry-accepted substitute or successor base rate, then the Calculation Agent shall use such substitute or successor base rate; and |
(B) | If the Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent, in consultation with the Company, may determine what business day convention to use, the definition of business day, the Distribution Determination Date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to LIBOR, or any adjustment to the applicable spread thereon, in a manner that is consistent
with industry-accepted practices for such substitute or successor base rate. |
(dd) | “Three-Month LIBOR Rate” has the meaning assigned to such term in the definition of “Three-Month LIBOR.” |
2 | Terms, Rights, Powers, Preferences and Duties of Series B Preferred Shares |
2.1 | Designation. |
2.2 | Initial Issuance; Additional Shares. |
2.3 | Distributions. |
(a) | Distribution Rate. |
(i) | Each Series B Holder will be entitled to receive, with respect to each Series B Preferred Share held by such Series B Holder, only when, as, and if declared by the Directors, out of funds legally available for such purpose, cumulative cash distributions based on the Series B Liquidation Preference, at a rate equal to (i) from, and including, [ ]13,
2022 to, but excluding, December 15, 2024 (the “Fixed Rate Period”), 8.00% per annum, and (ii) beginning December 15, 2024 (the “Floating Rate Period”), Three-Month LIBOR plus a spread of 644.7 basis points per annum. |
(ii) | The distribution rate for each Distribution Period in the Floating Rate Period will be determined by the Calculation Agent using Three-Month LIBOR as in effect on the second London Banking Day prior to the beginning of the Distribution Period, which date is referred to as the “Distribution Determination Date” for the relevant Distribution Period. The Calculation Agent then will add Three-Month LIBOR as determined on the Distribution Determination
Date and the spread of 644.7 basis points and that sum will be the distribution rate for the applicable Distribution Period. Once the distribution rate for the Series B Preferred Shares is determined, the Calculation Agent will deliver that information to the Company and the Transfer Agent for the Series B Preferred Shares. Absent manifest error, the Calculation Agent’s determination of the distribution rate for a Distribution Period for the Series B Preferred Shares will be final. |
(b) | Distribution Payments. |
11 | NTD: to be the date of adoption of Articles. |
12 | NTD: to be the date
of adoption of Articles. |
13 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(c) | Conventions. |
(d) | Terms of Accrual. |
(e) | Limitations following Non-Payment of Distributions. |
(i) | no distribution
will be declared and paid or set aside for payment on any Junior Securities (other than a distribution payable solely in Junior Securities); |
(ii) | no Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company, or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities pursuant
to a binding agreement existing prior to November 27, 2019), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(iii) | no Parity Securities will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or exchange
all, or a pro rata portion of Series B Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
14 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(f) | Shorter Distribution Periods for Junior Securities or Parity Securities. |
(g) | Distribution in Arrears. |
(i) | Accumulated distributions in arrears on Series B Preferred Shares for any past Distribution Period may be declared by the Directors and paid on any date fixed by the Directors, whether or not a Distribution Payment Date, to Series B Holders
on the Record Date for such payment, which may not be less than 10 days before such distribution. Any such payment shall be made in accordance with Section 2.3(b) of this Series B Preferred Share Designation. |
(ii) | Subject to the next succeeding sentence, if all accumulated distributions in arrears on all Series B Preferred Shares and any Parity Securities have not been declared and paid, or sufficient funds for the payment thereof have not been set apart, payment of accumulated distributions in arrears will be made in order of their respective Distribution Payment Dates, commencing with the earliest Distribution Payment Date. If less than all distributions payable with respect to all Series B Preferred Shares and any Parity Securities are paid, any partial payment will be made pro rata with respect to the Series B
Preferred Shares and any Parity Securities entitled to a distribution payment at such time in proportion to the aggregate amounts remaining due in respect of such Series B Preferred Shares and Parity Securities at such time. |
(h) | Distribution on Junior Securities. |
2.4 | Rank. |
(a) | senior and prior to the Common Shares and any class or series of Preferred Shares that by its terms is designated as ranking junior to the Series B Preferred Shares; |
(b) | pari
passu with any class or series of Preferred Shares that by its terms is designated as ranking equal to the Series B Preferred Shares or does not state that it is junior or senior to the Series B Preferred Shares; and |
(c) | junior to any class or series of Preferred Shares that is expressly designated as ranking senior to the Series B Preferred Shares (subject to receipt of any requisite consents prior to issuance). |
2.5 | Optional Redemption; Distribution Rate Step-Up following a Change of Control. |
(a) | Optional Redemption on or after December 15, 2024. |
(b) | Optional Redemption Following a Rating Event. |
(c) | Optional Redemption following a Tax Redemption Event. |
(d) | Optional Redemption following a Change of Control; Distribution Rate Step-Up following a Change of Control. |
2.6 | Redemption
Procedures. |
(a) | If the Company elects to redeem any Series B Preferred Shares, the Company will provide notice to the Series B Holders of the Series B Preferred Shares to be redeemed, not less than 30 days and not more than 60 days before the date fixed for redemption thereof (provided, however, that if the Series B Preferred Shares are held in book-entry form through the Depositary, the Company may give this notice in any manner permitted by the Depositary). Any notice given as provided in this Section 2.6 will be conclusively presumed to have been duly given,
whether or not the Series B Holder receives such notice, and any defect in such notice or in the provision of such notice to any Series B Holder of Series B Preferred Shares designated for redemption will not affect the redemption of any other Series B Preferred Shares. Each notice of redemption shall state: |
(i) | the redemption date; |
(ii) | the redemption price; |
(iii) | if fewer than all Series B Preferred Shares are to be redeemed, the number of Series B Preferred Shares to be redeemed; and |
(iv) | the
manner in which the Series B Holders of Series B Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
(b) | If notice of redemption of any Series B Preferred Shares has been given and if the funds necessary for such redemption have been deposited by the Company in trust with a bank or the Depositary for the benefit of the Series B Holders of any Series B Preferred Shares so called for redemption, then from |
(c) | In
the case of any redemption of only part of the Series B Preferred Shares at the time Outstanding, the Series B Preferred Shares to be redeemed will be selected either pro rata or by lot. Subject to the provisions of this Series B Preferred Share Designation and applicable law, the Directors will have the full power and authority to prescribe the terms and conditions upon which Series B Preferred Shares may be redeemed from time to time. |
(d) | Any redemption of the Series B Preferred Shares pursuant to Section 2.5 shall be effected only out of funds legally available for such purpose. |
2.7 | Voting Rights. |
(a) | Generally
No Voting Rights; Votes Per Share. |
(b) | Voting
Rights Upon Nonpayment of Distributions. |
(i) | Whenever distributions on any Series B Preferred Shares are in arrears for six or more quarterly Distribution Periods, whether or not consecutive (a “Nonpayment”), the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically increased by two (any such increase, a “Series B Nonpayment Board Expansion”) if not already increased by two by reason of the appointment of Directors by the holders of any Other Voting Preferred Shares (as defined below) and the holders of Series B Preferred Shares, voting together as a single class. The Series B Holders, voting together as a single class with the holders of any series of Parity Securities then Outstanding upon which like voting
rights have been conferred and are exercisable (any such series, “Other Voting Preferred Shares”), will be entitled to vote, by the affirmative vote of a majority of the votes entitled to be cast, for the appointment of two additional Directors (“Series B Nonpayment Directors”) at a special meeting of the Series B Holders (any such meeting, a “Series B Nonpayment Meeting”) and the holders of such Other Voting Preferred Shares and at each subsequent annual meeting of Common Members at which such Series B Nonpayment Directors are up for re-appointment; provided that when all distributions accumulated on the Series B Preferred Shares for all past Distribution Periods and the then current Distribution Period shall have been fully paid, the right of Series B Holders to appoint any Directors will cease and, unless there are any Other Voting Preferred Shares that are then entitled to vote for the election
of Directors, the term of office of the Series B Nonpayment Directors will forthwith terminate, the office of such Series B Nonpayment Directors appointed by Series B Holders shall automatically be vacated and the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically reduced by two. However, the right of the Series B Holders and holders of any Other Voting Preferred Shares to appoint two additional Directors will again vest if and whenever six additional quarterly distributions have not been declared and paid, as set forth in this Section 2.7(b)(i). In no event shall the Series B Holders be entitled pursuant to these voting rights to elect a Director that would cause the Company to fail to satisfy a requirement relating to director independence of any national securities exchange or quotation system on which any class or
series of the Company’s Equity Interests is listed or quoted. For the avoidance of doubt, in no event shall the total number of Directors elected by Series B Holders and holders of any Other Voting Preferred Shares exceed two. |
(ii) | Following a Nonpayment, the Company may, and upon the written request of any Series B Holders (addressed to the Company) shall, call a Series B Nonpayment Meeting for the appointment of the Series B Nonpayment Directors by the Series B Holders and the Other Voting Preferred Shares. The
Company shall, in its sole discretion, determine a date and a Record Date for such Series B Nonpayment Meeting, provide notice of such Series B Nonpayment Meeting and conduct such Series B Nonpayment Meeting, in each case applying procedures for general meetings set out in the Articles. Any subsequent annual general meeting of Common Members at which such Series B Nonpayment Directors are up for re-appointment shall be called and held applying procedures for annual general meetings set out in the Articles as if references to (A) Members and Common Members and (B) Outstanding Voting Shares were, solely with respect to the Series A Nonpayment Directors, references to Series B Holders and to Series B Preferred Shares, mutatis mutandis. |
(iii) | If, at any time when the voting rights conferred upon
the Series B Preferred Shares are exercisable, any vacancy in the office of a Director appointed pursuant to the procedures described in this Section 2.7(b) shall occur, then such vacancy may be filled only by the remaining Director or by the affirmative vote of a majority of the votes entitled to be cast by the Series B Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series B Holders and holders of any such Other Voting Preferred Shares. Any Director appointed pursuant to the procedures described in this Section 2.7(b) may be removed at any time, with or without cause, only by the affirmative vote of Series B Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series B Holders and holders of any such Other Voting Preferred Shares, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the Series B Holders and
holders of Other Voting Preferred Shares that are then entitled to vote for the election of Directors, and may not be removed by the holders of the Common Shares |
(c) | Additional Voting Rights. |
(d) | Creation and Issuance of Parity Securities and Junior Securities. |
(e) | No Voting Rights Following Certain Redemption Events. |
(f) | Limitations. |
(i) | any increase in the amount of authorized Common Shares or authorized Preferred Shares, or any increase or decrease in the number of shares of any series of Preferred Shares, or the authorization, creation and issuance of other
classes or series of Equity Interests, in each case ranking on parity with or junior to the Series B Preferred Shares as to distributions or distribution of assets upon the Company’s liquidation, dissolution or winding up; |
(ii) | a merger or consolidation of the Company with or into another entity in which the Series B Preferred Shares remain Outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
(iii) | a merger or consolidation of the
Company with or into another entity in which the Series B Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Series B Preferred Shares. |
2.8 | Liquidation Rights. |
(a) | Upon the Company’s voluntary or involuntary liquidation, dissolution or winding up (“Liquidation”), the Series B Holders shall be entitled to be paid
out of the Company’s assets legally available for distribution to the Members, before any distribution of assets is made to holders of the Common Shares or any other Junior Securities, a liquidating distribution in the amount of the Series B Liquidation Preference per Series B Preferred Share, plus an amount equal to accumulated and unpaid distributions thereon, if any, to, but excluding, the date of such liquidation distribution, whether or not declared, plus the sum of any declared and unpaid distributions for Distribution Periods prior to the Distribution Period in which the liquidation distribution is made and any declared and unpaid distributions for the then current Distribution Period in which the liquidation distribution is made to the date of such liquidation distribution. After payment to the Series B Holder of the full amount of the liquidating distributions to which the
Series B Holders are entitled, the Series B Holders shall have no right or claim to any of the Company’s remaining assets. |
(b) | Distributions to Series B Holders will be made only to the extent that the Company’s assets are available after satisfaction of all liabilities to creditors and subject to the rights of holders of any securities ranking senior to the Series B Preferred Shares. If, in the event of a Liquidation, the Company is unable to pay full liquidating distributions to the Series B Holders in accordance with the foregoing provisions of this Section
2.8 and to all Parity Securities in accordance with the terms thereof, then the Company shall distribute its assets to those holders ratably in proportion to the liquidating distributions which they would otherwise have received. |
(c) | Nothing in this Section 2.8 shall entitle the Series B Holders to be paid any amount upon the occurrence of a Liquidation until holders of any classes or series of Senior Securities ranking, as to the distribution of assets upon a Liquidation, senior to the Series B Preferred Shares have been paid all amounts to which such classes or series of Senior Securities are entitled. |
(d) | For
the purposes of this Series B Preferred Share Designation, the Company’s merger or consolidation with or into any other entity or by another entity with or into the Company or the sale, lease, exchange or other transfer of all or substantially all of the Company’s assets (for cash, securities or other consideration) shall not be deemed to be a Liquidation. If the Company enters into any merger or consolidation transaction with or into any other entity and the Company is not the surviving entity in |
2.9 | Reports. |
2.10 | No Mandatory Redemption, Conversion, Exchange or Preemptive Rights. |
2.11 | No Other Rights. |
2.12 | Forum Selection. |
2.13 | Percentage Interest. |
2.14 | Book-Entry System. |
1 | Definitions |
1.1 | Definitions. |
(a) | “Articles” has the meaning assigned to such term in the introduction to this Series C Preferred Share Designation. |
(b) | “Business
Day” means any weekday in New York, New York that is not a day on which banking institutions in that city are authorized or required by law, regulation, or executive order to be closed. |
(c) | “Calculation Agent” means the calculation agent for the Series C Preferred Shares, which shall be appointed by the Company prior to the First Reset Date and shall be a third party independent financial institution of national standing with experience providing services as a calculation agent. |
(d) | “Change of Control” means the occurrence of
the following: |
(i) | any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares representing more than 50.0% of the voting power of the Company’s Voting Equity Interests; or |
(ii) | (A) all or substantially all the assets of the Company and the Restricted Subsidiaries,
taken as a whole, are sold or otherwise transferred to any person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (B) the Company consolidates, amalgamates or merges with or into another person or any person consolidates, amalgamates or merges with or into the Company, in either case under this clause (ii), in one transaction or a series of related transactions in which immediately after the consummation thereof persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing in the aggregate a majority of the total voting power of the Voting Equity Interests of the Company immediately prior to such consummation do
not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Equity Interests representing a majority of the total voting power of the Voting Equity Interests of the Company, or the applicable surviving or transferee person; provided that this clause shall not apply (I) in the case where immediately after the consummation of the transactions Permitted Holders, directly or indirectly, beneficially own Voting Equity Interests representing in the aggregate a majority of the total voting power of the Company, or the applicable surviving or transferee person, or (II) to any consolidation, amalgamation or merger of the Company with or into (1) a corporation, limited liability company or partnership
or (2) a wholly-owned subsidiary of a corporation, limited liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no person or group (other than Permitted Holders), which beneficially owns Voting Equity Interests representing 50.0% or more of the voting power of the total outstanding Voting Equity Interests of such entity. |
(e) | “Company” has the meaning assigned to such term in the introduction to this Series C Preferred Share Designation. |
(f) | “Distribution
Payment Date” means March 15, June 15, September 15 and December 15 of each year, beginning on [ ]15, 2022. |
(g) | “Distribution Period” means the period from, and including, each Distribution Payment Date to, but excluding, the next succeeding Distribution Payment Date, except for the initial Distribution Period, which will be the period from, and including, [ ]16, 2022, to, but excluding, [ ]17, 2022. |
(h) | “Distribution Rate” has the meaning assigned to such term in Section 2.3 of this Series C Preferred
Share Designation. |
(i) | “Equity Interests” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership, limited liability company or business trust, partnership, membership or beneficial interests (whether general or limited) or shares in the capital of a company; (d) in the case of an exempted company, shares in the capital of the company; and (e) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person
(but excluding from the foregoing any debt securities convertible into Equity Interests, whether or not such debt securities include any right of participation with Equity Interests). |
(j) | “First Reset Date” means June 15, 2026. |
(k) | “Five-Year Treasury Rate” means, for any Reset Period commencing on or after the First Reset Date, the rate determined by the Calculation Agent on the Reset Distribution Determination Date and equal to: |
(i) | The
average of the yields to maturity on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release designated H.15 Daily Update or any successor publication which is published by the Federal Reserve Board, as determined by the Calculation Agent in its sole discretion; or |
(ii) | If no calculation is provided as described in clause (i), then the Calculation Agent, after consulting such sources as it deems comparable to any of the foregoing calculations, or any such source as it deems reasonable from which to estimate the Five-Year Treasury Rate, shall determine the Five-Year Treasury Rate in its sole discretion, provided that if the Calculation
Agent determines there is an industry-accepted successor Five-Year Treasury Rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent has determined a substitute or successor rate in accordance with the foregoing, the Calculation Agent, in its sole discretion, may determine the “business day” convention, the definition of “business day” and the Reset Distribution Determination Date to be used and any other relevant methodology for calculating such substitute or successor rate, including any adjustment factor needed to make |
15 | NTD:
to be the first distribution payment date following adoption of Articles. |
16 | NTD: to be the last distribution payment date prior to adoption of Articles. |
17 | NTD: to be the first distribution payment date following adoption of Articles. |
(l) | “Junior Securities” means the Common Shares and any other class or series of the Company’s
Equity Interests over which the Series C Preferred Shares have preference or priority in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(m) | “Liquidation” has the meaning assigned to such term in Section 2.8(a) of this Series C Preferred Share Designation. |
(n) | “Nonpayment” has the meaning set forth in Section 2.7(b)(i) of this Series C Preferred Share Designation. |
(o) | “Other
Voting Preferred Shares” has the meaning assigned to such term in Section 2.7(b)(i) of this Series C Preferred Share Designation. |
(p) | “Parity Securities” means any class or series of the Company’s Equity Interests that ranks equally with the Series C Preferred Shares in the payment of distributions and in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(q) | “Rating Event” means a change by any rating agency
to the criteria employed by such rating agency as of March 25, 2021 for purposes of assigning ratings to securities with features similar to the Series C Preferred Shares, which change results in (i) any shortening of the length of time for which the criteria in effect as of March 25, 2021 are scheduled to be in effect with respect to the Series C Preferred Shares, or (ii) a lower equity credit being given to the Series C Preferred Shares than the equity credit that would have been assigned to the Series C Preferred Shares by such rating agency pursuant to the criteria in effect as of March 25, 2021. |
(r) | “Reset Date” means the First Reset Date and
each date falling on the fifth anniversary of the preceding Reset Date, whether or not a Business Day. |
(s) | “Reset Distribution Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginning of such Reset Period. |
(t) | “Reset Period” means the period from, and including, the First Reset Date to, but excluding, the next following Reset Date and thereafter each period from, and including, each Reset Date to, but excluding, the next following Reset Date. |
(u) | “Senior
Securities” means any class or series of the Company’s Equity Interests that has preference or priority over the Series C Preferred Shares in the payment of distributions or in the distribution of assets on the Company’s liquidation, dissolution or winding up. |
(v) | “Series C Holder” means, with respect to any Series C Preferred Shares, the Record Holder of such Series C Preferred Shares. |
(w) | “Series C Liquidation Preference” means US$25.00 per
Series C Preferred Share. |
(x) | “Series C Nonpayment Board Expansion” has the meaning assigned to such term in Section 2.7(b)(i) of this Series C Preferred Share Designation. |
(y) | “Series C Nonpayment Directors” has the meaning assigned to such term in Section 2.7(b)(i) of this Series C Preferred Share Designation. |
(z) | “Series C Nonpayment Meeting” has the meaning assigned to such term in Section 2.7(b)(i) of this Series C Preferred Share Designation. |
(aa) | “Series
C Preferred Share” means a 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Share of a par value of US$0.01 in the capital of the Company having the designations, preferences, rights, powers and duties set forth in this Series C Preferred Share Designation and the Articles to which this Series C Preferred Share Designation forms a part. |
(bb) | “Series C Record Date” means, with respect to any Distribution Payment Date, the 1st calendar day of the month of such Distribution Payment Date or such other record date fixed by the Directors as the Record Date for such Distribution Payment Date that is not more than 60 nor less than 10 days prior to such Distribution Payment Date. |
(cc) | “Tax
Redemption Event” means, after March 25, 2021, due to (a) an amendment to, or a change in official interpretation of, the Code, Treasury Regulations promulgated thereunder, or administrative guidance or (b) an administrative or judicial determination, (i) the Company is advised by nationally recognized counsel or a “Big Four” accounting firm that the Company will be treated as an association taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax (other than any tax imposed pursuant to Section 6225 of the Code, as amended by the Bipartisan Budget Act of 2015), or (ii) the Company files an IRS Form
8832 (or successor form) electing that the Company be treated as an association taxable as a corporation for U.S. Federal income tax purposes. |
2 | Terms, Rights, Powers, Preferences and Duties of Series C Preferred Shares |
2.1 | Designation. |
2.2 | Initial Issuance; Additional Shares. |
2.3 | Distributions. |
(a) | Distribution Rate. |
18 | NTD:
to be the date of adoption of Articles. |
19 | NTD: to be the date of adoption of Articles. |
20 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(b) | Distribution Payments. |
(c) | Conventions. |
(d) | Terms of Accrual. |
(e) | Limitations following Non-Payment of Distributions. |
(i) | no
distribution will be declared and paid or set aside for payment on any Junior Securities (other than a distribution payable solely in Junior Securities); |
(ii) | no Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by the Company, or any of its subsidiaries, directly or indirectly (other than as a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange for or conversion into Junior Securities, through the use of the proceeds of a substantially contemporaneous sale of other Junior Securities or pursuant to a contractually binding requirement to buy Junior Securities
pursuant to a binding agreement existing prior to March 25, 2021), nor will any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Company or any of its subsidiaries; and |
(iii) | no Parity Securities will be repurchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries (other than pursuant to pro rata offers to purchase or
exchange all, or a pro rata portion of Series C Preferred Shares and such Parity Securities or as a result of a reclassification of Parity Securities for or into other Parity Securities, or by conversion into or exchange for other Parity Securities or Junior Securities). |
21 | NTD: to be the last distribution payment date prior to adoption of Articles. |
(f) | Shorter Distribution Periods for Junior Securities or Parity Securities. |
(g) | Distribution in Arrears. |
(i) | Accumulated distributions in arrears on Series C Preferred Shares for any past Distribution Period may be declared by the Directors and paid on any date fixed by the Directors, whether or not a Distribution Payment Date, to Series C Holders
on the Record Date for such payment, which may not be less than 10 days before such distribution. Any such payment shall be made in accordance with Section 2.3(b). |
(ii) | Subject to the next succeeding sentence, if all accumulated distributions in arrears on all Series C Preferred Shares and any Parity Securities have not been declared and paid, or sufficient funds for the payment thereof have not been set apart, payment of accumulated distributions in arrears will be made in order of their respective Distribution Payment Dates, commencing with the earliest Distribution Payment Date. If less than all distributions payable with respect to all Series C Preferred Shares and any Parity Securities are paid, any partial payment will be made pro rata with respect to the Series C Preferred Shares and any Parity Securities entitled
to a distribution payment at such time in proportion to the aggregate amounts remaining due in respect of such Series C Preferred Shares and Parity Securities at such time. |
(h) | Distribution on Junior Securities. |
2.4 | Rank. |
(a) | senior and prior to the Common Shares and any class or series of Preferred Shares that by its terms is designated as ranking junior to the Series C Preferred Shares; |
(b) | pari passu with any class or series of Preferred Shares that by its terms is designated as ranking equal to the Series C Preferred Shares or does not state that it is junior or senior to the Series C Preferred Shares; and |
(c) | junior
to any class or series of Preferred Shares that is expressly designated as ranking senior to the Series C Preferred Shares (subject to receipt of any requisite consents prior to issuance). |
2.5 | Optional Redemption; Distribution Rate Step-Up following a Change of Control. |
(a) | Optional Redemption on or after June 15, 2026. |
(b) | Optional Redemption Following a Rating Event. |
(c) | Optional Redemption following a Tax Redemption Event. |
(d) | Optional Redemption following a Change of Control; Distribution Rate Step-Up following a Change of Control. |
2.6 | Redemption
Procedures. |
(a) | If the Company elects to redeem any Series C Preferred Shares, the Company will provide notice to the Series C Holders of the Series C Preferred Shares to be redeemed, not less than 30 days and not more than 60 days before the date fixed for redemption thereof (provided, however, that if the Series C Preferred Shares are held in book-entry form through the Depositary, the Company may give this notice in any manner permitted by the Depositary). Any notice given as provided in this Section 2.6 will be conclusively presumed to have been duly given,
whether or not the Series C Holder receives such notice, and any defect in such notice or in the provision of such notice to any Series C Holder of Series C Preferred Shares designated for redemption will not affect the redemption of any other Series C Preferred Shares. Each notice of redemption shall state: |
(i) | the redemption date; |
(ii) | the redemption price; |
(iii) | if fewer than all Series C Preferred Shares are to be redeemed, the number of Series C Preferred Shares to be redeemed; and |
(iv) | the
manner in which the Series C Holders of Series C Preferred Shares called for redemption may obtain payment of the redemption price in respect of those shares. |
(b) | If notice of redemption of any Series C Preferred Shares has been given and if the funds necessary for such redemption have been deposited by the Company in trust with a bank or the Depositary for the benefit of the Series C Holders of any Series C Preferred Shares so called for redemption, then from |
(c) | In
the case of any redemption of only part of the Series C Preferred Shares at the time Outstanding, the Series C Preferred Shares to be redeemed will be selected either pro rata or by lot. Subject to the provisions of this Series C Preferred Share Designation and applicable law, the Directors will have the full power and authority to prescribe the terms and conditions upon which Series C Preferred Shares may be redeemed from time to time. |
(d) | Any redemption of the Series C Preferred Shares pursuant to Section 2.5 shall be effected only out of funds legally available for such purpose. |
2.7 | Voting Rights. |
(a) | Generally
No Voting Rights; Votes Per Share. |
(b) | Voting
Rights Upon Nonpayment of Distributions. |
(i) | Whenever distributions on any Series C Preferred Shares are in arrears for six or more quarterly Distribution Periods, whether or not consecutive (a “Nonpayment”), the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically increased by two (any such increase, a “Series C Nonpayment Board Expansion”) if not already increased by two by reason of the appointment of Directors by the holders of any Other Voting Preferred Shares (as defined below) and the holders of Series C Preferred Shares, voting together as a single class. The Series C Holders, voting together as a single class with the holders of any series of Parity Securities then Outstanding upon which like voting
rights have been conferred and are exercisable (any such series, “Other Voting Preferred Shares”), will be entitled to vote, by the affirmative vote of a majority of the votes entitled to be cast, for the appointment of two additional Directors (“Series C Nonpayment Directors”) at a special meeting of the Series C Holders (any such meeting, a “Series C Nonpayment Meeting”) and the holders of such Other Voting Preferred Shares and at each subsequent annual meeting of Common Members at which such Series C Nonpayment Directors are up for re-appointment; provided that when all distributions accumulated on the Series C Preferred Shares for all past Distribution Periods and the then current Distribution Period shall have been fully paid, the right of Series C Holders to appoint any Directors will cease and, unless there are any Other Voting Preferred Shares that are then entitled to vote for the election
of Directors, the term of office of the Series C Nonpayment Directors will forthwith terminate, the office of such Series C Nonpayment Directors appointed by Series C Holders shall automatically be vacated and the upper limit of the number of Directors comprising the board of Directors under Article 23.1 shall be automatically reduced by two. However, the right of the Series C Holders and holders of any Other Voting Preferred Shares to appoint two additional Directors will again vest if and whenever six additional quarterly distributions have not been declared and paid, as set forth in this Section 2.7(b)(i). In no event shall the Series C Holders be entitled pursuant to these voting rights to elect a Director that would cause the Company to fail to satisfy a requirement relating to director independence of any national securities exchange or quotation system on which any class or
series of the Company’s Equity Interests is listed or quoted. For the avoidance of doubt, in no event shall the total number of Directors elected by Series C Holders and holders of any Other Voting Preferred Shares exceed two. |
(ii) | Following a Nonpayment, the Company may, and upon the written request of any Series C Holders (addressed to the Company) shall, call a Series C Nonpayment Meeting for the appointment of the Series C Nonpayment Directors by the Series C Holders and the Other Voting Preferred Shares. The
Company shall, in its sole discretion, determine a date and a Record Date for such Series C Nonpayment Meeting, provide notice of such Series C Nonpayment Meeting and conduct such Series C Nonpayment Meeting, in each case applying procedures for general meetings set out in the Articles. Any subsequent annual general meeting of Common Members at which such Series C Nonpayment Directors are up for re-appointment shall be called and held applying procedures for annual general meetings set out in the Articles as if references to (A) Members and Common Members and (B) Outstanding Voting Shares were, solely with respect to the Series C Nonpayment Directors, references to Series C Holders and to Series C Preferred Shares, mutatis mutandis. |
(iii) | If, at any time when the voting rights conferred upon
the Series C Preferred Shares are exercisable, any vacancy in the office of a Director appointed pursuant to the procedures described in this Section 2.7(b) shall occur, then such vacancy may be filled only by the remaining Director or by the affirmative vote of a majority of the votes entitled to be cast by the Series C Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series C Holders and holders of any such Other Voting Preferred Shares. Any Director appointed pursuant to the procedures described in this Section 2.7(b) may be removed at any time, with or without cause, only by the affirmative vote of Series C Holders and holders of all Other Voting Preferred Shares, acting as a single class at a special meeting of Series C Holders and holders of any such Other Voting Preferred Shares, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the Series C Holders and
holders of Other Voting Preferred Shares that are then entitled to vote for the election of Directors, and may not be removed by the holders of the Common Shares |
(c) | Additional Voting Rights. |
(d) | Creation and Issuance of Parity Securities and Junior Securities. |
(e) | No Voting Rights Following Certain Redemption Events. |
(f) | Limitations. |
(i) | any increase in the amount of authorized Common Shares or authorized Preferred Shares, or any increase or decrease in the number of shares of any series of Preferred Shares, or the authorization, creation and issuance of other
classes or series of Equity Interests, in each case ranking on parity with or junior to the Series C Preferred Shares as to distributions or distribution of assets upon the Company’s liquidation, dissolution or winding up; |
(ii) | a merger or consolidation of the Company with or into another entity in which the Series C Preferred Shares remain Outstanding with identical terms as existing immediately prior to such merger or consolidation; and |
(iii) | a merger or consolidation of the
Company with or into another entity in which the Series C Preferred Shares are converted into or exchanged for preference securities of the surviving entity or any entity, directly or indirectly, controlling such surviving entity and such new preference securities have terms identical (other than the identity of the issuer) to the terms of the Series C Preferred Shares. |
2.8 | Liquidation Rights. |
(a) | Upon the Company’s voluntary or involuntary liquidation, dissolution or winding up (“Liquidation”), the Series C Holders shall be entitled to be paid
out of the Company’s assets legally available for distribution to the Members, before any distribution of assets is made to holders of the Common Shares or any other Junior Securities, a liquidating distribution in the amount of the Series C Liquidation Preference per Series C Preferred Share, plus an amount equal to accumulated and unpaid distributions thereon, if any, to, but excluding, the date of such liquidation distribution, whether or not declared, plus the sum of any declared and unpaid distributions for Distribution Periods prior to the Distribution Period in which the liquidation distribution is made and any declared and unpaid distributions for the then current Distribution Period in which the liquidation distribution is made to the date of such liquidation distribution. After payment to the Series C Holder of the full amount of the liquidating distributions to which the
Series C Holders are entitled, the Series C Holders shall have no right or claim to any of the Company’s remaining assets. |
(b) | Distributions to Series C Holders will be made only to the extent that the Company’s assets are available after satisfaction of all liabilities to creditors and subject to the rights of holders of any securities ranking senior to the Series C Preferred Shares. If, in the event of a Liquidation, the Company is unable to pay full liquidating distributions to the Series C Holders in accordance with the foregoing provisions of this Section
2.8 and to all Parity Securities in accordance with the terms thereof, then the Company shall distribute its assets to those holders ratably in proportion to the liquidating distributions which they would otherwise have received. |
(c) | Nothing in this Section 2.8 shall entitle the Series C Holders to be paid any amount upon the occurrence of a Liquidation until holders of any classes or series of Senior Securities ranking, as to the distribution of assets upon a Liquidation, senior to the Series C Preferred Shares have been paid all amounts to which such classes or series of Senior Securities are entitled. |
(d) | For
the purposes of this Series C Preferred Share Designation, the Company’s merger or consolidation with or into any other entity or by another entity with or into the Company or the sale, lease, exchange or other transfer of all or substantially all of the Company’s assets (for cash, securities or other consideration) shall not be deemed to be a Liquidation. If the Company enters into any merger or consolidation transaction with or into any other entity and the Company is not the surviving entity in |
2.9 | Reports. |
2.10 | No Mandatory Redemption, Conversion, Exchange or Preemptive Rights. |
2.11 | No Other Rights. |
2.12 | Forum Selection. |
2.13 | Percentage Interest. |
2.14 | Book-Entry System. |
Item 20. | Indemnification of Officers
and Directors. |
Item 21. | Exhibits and Financial
Statements Schedules. |
Exhibit No. | | | Description |
| | Agreement
and Plan of Merger, dated as of August 12, 2022, by and among, FTAI, the Company and FTAI Aviation Merger Sub LLC (incorporated from Annex A of the proxy statement/prospectus that forms a part of this registration statement). | |
| | Separation
and Distribution Agreement, dated as of August 1, 2022, between FTAI Infrastructure Inc. and Fortress Transportation and Infrastructure Investors LLC (incorporated by reference to Exhibit 2.1 of FTAI’s Current Report on Form 8-K, filed on August 1, 2022). | |
| | Amended
and Restated Memorandum and Articles of Association of the Company (incorporated from Annex B of the proxy statement/prospectus that forms a part of this registration statement). | |
| | Form
of Share Designation with respect to the 8.25% Fixed-to-Floating Series A Cumulative Perpetual Redeemable Preferred Shares (included as part of Exhibit 3.1 hereto). | |
| | Form of Share Designation with respect to the 8.00% Fixed-to-Floating Series B Cumulative Perpetual Redeemable Preferred Shares (included
as part of Exhibit 3.1 hereto). | |
| | Form of Share Designation with respect to the 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (included as part of Exhibit 3.1 hereto). | |
| | Form
of Certificate representing the 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares of FTAI Aviation Ltd. (included as part of Exhibit 3.1 hereto). | |
| | Form of Certificate representing the 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares of FTAI Aviation Ltd. (included as part
of Exhibit 3.1 hereto). | |
| | Form of Certificate representing the 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares of FTAI Aviation Ltd. (included as part of Exhibit 3.1 hereto). | |
| | Form
of Certificate of Designations (included as part of Exhibit 3.1 hereto). | |
| | Indenture, dated September
18, 2018, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC’s 6.50% Senior Unsecured Notes due 2025 (incorporated by reference to Exhibit 4.1 of Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed on September 18, 2018). | |
| | Form
of Global Note representing Fortress Transportation and Infrastructure Investors LLC’s 6.50% Senior Unsecured Notes due 2025 (incorporated by reference to Exhibit 4.1 of Fortress Transportation and Infrastructure Investors LLC's Current Report on Form 8-K, filed on September 18, 2018). |
Exhibit No. | | | Description |
| | First
Supplemental Indenture, dated May 21, 2019, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC’s 6.50% Senior Unsecured Notes due 2025 (incorporated by reference to Exhibit 4.1 of Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed on May 21, 2019). | |
| | Second
Supplemental Indenture, dated December 23, 2020, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC’s 6.50% Senior Unsecured Notes due 2025 (incorporated by reference to Exhibit 4.1 of Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed on December 23, 2020). | |
| | Indenture,
dated July 28, 2020, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC's 9.75% Senior Unsecured Notes due 2027 (incorporated by reference to Exhibit 4.1 to Fortress Transportation and Infrastructure Investors LLC's Current Report on Form 8-K, filed July 28, 2020). | |
| | Indenture,
dated April 12, 2021, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC's 5.50% Senior Unsecured Notes due 2028 (incorporated by reference to Exhibit 4.1 to Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed April 12, 2021). | |
| | Form
of Global Note representing the Fortress Transportation and Infrastructure Investors LLC’s 5.50% senior unsecured notes due 2028 (incorporated by reference to Exhibit 4.1 to Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed April 12, 2021). | |
| | First
Supplemental Indenture, dated as of September 24, 2021, between Fortress Transportation and Infrastructure Investors LLC and U.S. Bank National Association, as trustee, relating to Fortress Transportation and Infrastructure Investors LLC’s 5.50% Senior Unsecured Notes due 2028 (incorporated by reference to Exhibit 4.1 of Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed on September 24, 2021). | |
| | Opinion
of Maples and Calder (Cayman) LLP as to the validity of the securities being registered. | |
| | Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to certain tax matters. | |
| | Form
of Services and Profit Sharing Agreement (incorporated by reference to Exhibit 10.2 of FTAI’s Current Report on Form 8-K, filed on August 1, 2022). | |
| | Management
and Advisory Agreement, dated as of July 31, 2022, between FTAI, FTAI Finance Holdco Ltd., the Subsidiaries of FTAI party thereto and FIG LLC (incorporated by reference to Exhibit 10.1 of FTAI’s Current Report on Form 8-K, filed on August 1, 2022). | |
| | Registration
Rights Agreement, dated as of May 20, 2015, among Fortress Transportation and Infrastructure Investors LLC, FIG LLC and Fortress Worldwide Transportation and Infrastructure Master GP LLC (incorporated by reference to Exhibit 10.3 of FTAI’s Current Report on Form 8-K, filed on May 21, 2015). | |
| | Form
of Amended and Restated Registration Rights Agreement. | |
| | FTAI Aviation Ltd. Nonqualified Stock Option and Incentive Award Plan.
| |
| | Form of FTAI Aviation Ltd. Director and Officer Indemnification Agreement. | |
| | Form
of Director Award Agreement pursuant to the FTAI Aviation Ltd. Nonqualified Stock Option and Incentive Plan. | |
| | Form of Award Agreement under the FTAI Aviation Ltd. Nonqualified Stock Option and Incentive Award Plan. | |
| | Amended
and Restated Credit Agreement, dated as of December 2, 2021, between Fortress Transportation and Infrastructure Investors LLC, the lenders and issuing banks from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of Fortress Transportation and Infrastructure Investors LLC’s Current Report on Form 8-K, filed December 8, 2021). | |
| | Second
Amended and Restated Credit Agreement, dated as of September 20, 2022, between Fortress Transportation and Infrastructure Investors LLC, the lenders and issuing banks from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of Fortress Transportation and Infrastructure Investors LLC's Current Report on Form 8-K, filed September 21, 2022. |
Exhibit No. | | | Description |
| | Trademark License Agreement, dated as of August 1, 2022, between Fortress Transportation and Infrastructure Investors LLC and FTAI Infrastructure Inc. (incorporated by reference to Exhibit 10.3 of FTAI’s Current Report on Form 8-K, filed on August 1, 2022). | |
| | List
of Subsidiaries | |
| | Consent of Independent Registered Public Accounting Firm. | |
| | Consent
of Maples and Calder (Cayman) LLP (included in the opinion filed as Exhibit 5.1 to this registration statement). | |
| | Consent of Skadden, Arps, Slate, Meagher & Flom LLP as to certain tax matters (included in Exhibit 8.1). | |
| | Form
of Proxy Card for the Special Meeting of Shareholders of FTAI. | |
| | Consent of Paul R. Goodwin to be named as a director. | |
| | Consent
of Judith A. Hannaway to be named as a director. | |
| | Consent of A. Andrew Levison to be named as a director. | |
| | Consent
of Kenneth J. Nicholson to be named as a director. | |
| | Consent of Ray M. Robinson to be named as a director. | |
| | Consent
of Martin Tuchman to be named as a director. | |
| | Calculation of Filing Fee Tables |
* |
† | Management contracts and compensatory plans or arrangements. |
Item 22. | Undertakings. |
(a) | The undersigned registrant hereby undertakes: |
1) | To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by section 10(a)(3) of the Securities Act; |
(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 SEC 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 Registration Fee” table in the effective registration statement; and |
(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) | That, for the purpose of determining
any liability under the Securities Act, 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) | 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) | That, for the purpose of determining liability under the Securities Act to any purchaser, if the registrant is subject to Rule 430C, 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 |
5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the 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, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(b) | Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(c) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(d) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(e) | Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
1) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form. |
2) | That
every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, 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) | 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. |
4) | To respond to requests for information that is incorporated by reference into the proxy statement/prospectus pursuant to Items 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 the documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(f) | Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the 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, the 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. |
(g) | That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement will be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
| | FTAI
Finance Holdco Ltd. | |||||||
| | | | | | ||||
| | By: | | | |||||
| | | | Name: | | | |||
| | | | Title: | | | Chairman
and Chief Executive Officer |
Name | | | Position | | | Date
|
| | | | |||
* | | | Chairman
and Chief Executive Officer | | | |
| | | | |||
| | | | |||
* | | | Chief
Financial Officer and Chief Accounting Officer | | | |
| | | |
By: | | | | | ||
| | Attorney-in-fact | | |
This ‘S-4/A’ Filing | Date | Other Filings | ||
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7/31/28 | ||||
12/26/26 | ||||
6/15/26 | ||||
12/15/24 | ||||
9/15/24 | ||||
6/30/23 | ||||
2/25/23 | ||||
1/26/23 | ||||
12/31/22 | ||||
11/9/22 | ||||
11/2/22 | ||||
10/6/22 | ||||
Filed on: | 10/4/22 | |||
9/21/22 | ||||
9/20/22 | ||||
9/1/22 | ||||
8/29/22 | ||||
8/15/22 | ||||
8/12/22 | S-4 | |||
8/11/22 | ||||
8/5/22 | ||||
8/1/22 | ||||
7/31/22 | ||||
7/26/22 | ||||
7/21/22 | ||||
7/12/22 | ||||
6/30/22 | ||||
4/28/22 | ||||
3/31/22 | ||||
3/13/22 | ||||
2/10/22 | ||||
2/4/22 | ||||
1/30/22 | ||||
1/28/22 | ||||
1/1/22 | ||||
12/31/21 | ||||
12/20/21 | ||||
12/15/21 | ||||
12/14/21 | ||||
12/8/21 | ||||
12/2/21 | ||||
10/8/21 | ||||
9/24/21 | ||||
6/30/21 | ||||
4/12/21 | ||||
3/25/21 | ||||
1/1/21 | ||||
12/31/20 | ||||
12/23/20 | ||||
12/15/20 | ||||
11/30/20 | ||||
7/28/20 | ||||
4/29/20 | ||||
12/31/19 | ||||
11/27/19 | ||||
9/12/19 | ||||
5/21/19 | ||||
1/1/19 | ||||
12/31/18 | ||||
9/18/18 | ||||
12/27/17 | ||||
12/8/17 | ||||
7/27/17 | ||||
12/28/16 | ||||
5/21/15 | ||||
5/20/15 | ||||
5/15/15 | ||||
5/11/15 | ||||
2/19/14 | ||||
List all Filings |