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As filed with the Securities and Exchange Commission on February 27, 2019
Registration No. 333-        ​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CLARIVATE ANALYTICS PLC
(Exact Name of Each Registrant as Specified in its Charter)
Jersey, Channel Islands
7374
Not Applicable
(State or other jurisdiction of
Incorporation or organization)
(Primary standard industrial
classification code number)
(I.R.S. Employer
Identification Number)
4th Floor, St. Paul’s Gate, 22-24 New Street
St. Helier, Jersey JE1 4TR
Telephone: +44 153 450 4700 (ext. 4531)
(Address, including zip code, and telephone number, including area code, of each registrant’s principal executive offices)
Vistra USA (IES), LLC
888 Seventh Avenue, 5 th Floor
New York, NY 10106
Telephone: (212) 500-6259
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
Rachel W. Sheridan, Esq.
Shagufa R. Hossain, Esq.
Latham & Watkins LLP
555 Eleventh Street, NW
Washington, D.C. 20004
Telephone: (202) 637-2200
Fax: (202) 637-2201
Raphael M. Russo, Esq.
Paul, Weiss, Rifkind, Wharton &
Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 373-3000
Fax: (212) 757-3990
Robert J. Mittman, Esq.
Brad L. Shiffman, Esq.
Kathleen A. Cunningham, Esq.
Blank Rome LLP
405 Lexington Avenue
New York, NY 10174
Telephone: (212) 885-5000
Fax: (212) 885-5001
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the transactions contemplated by the Agreement and Plan of Merger described in the included proxy statement/prospectus have been satisfied or waived.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Security To Be Registered
Amount To Be
Registered (1)
Proposed Maximum
Offering Price
Per Security (2)
Proposed Maximum
Aggregate
Offering Price (2)
Amount of
Registration
Fee
Ordinary Shares (3)
69,200,000 $ 11.08 $ 766,736,000.00 $ 92,928.40
Ordinary Shares (4)
34,712,174 $ 11.08 $ 384,610,887.92 $ 46,614.84
Total
$ 1,151,346,887.92 $ 139,543.24
(1)
All securities being registered will be issued by Clarivate Analytics Plc, a public limited company newly incorporated under the laws of Jersey, Channel Islands (“Clarivate”). In connection with the business combination described in the included proxy statement/​prospectus: (a) Camelot Merger Sub (Jersey) Limited, a newly formed private limited company incorporated under the laws of Jersey, Channel Islands, and a wholly owned subsidiary of Clarivate (“Jersey Merger Sub”), shall be merged with and into Camelot Holdings (Jersey) Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (the “Company”), with the Company surviving the merger and (b) CCC Merger Sub, Inc., a newly formed Delaware corporation and wholly owned subsidiary of Clarivate (“Delaware Merger Sub”), shall be merged with and into Churchill Capital Corp, a Delaware corporation (“Churchill”), with Churchill surviving the merger. As a result of the foregoing transactions, Clarivate will become the public company, and the current security holders of Churchill and the current security holders of the Company will become security holders of Clarivate.
(2)
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the shares of common stock of Churchill on the New York Stock Exchange on February 22, 2019 ($11.08 per share). This calculation is in accordance with Rule 457(f)(1) of the Securities Act of 1933, as amended.
(3)
Includes ordinary shares issuable in exchange for outstanding shares of common stock (including the common stock underlying units) of Churchill.
(4)
Represents ordinary shares issuable in exchange for shares of common stock issuable upon exercise of outstanding Churchill warrants (including warrants underlying units of Churchill), each whole warrant entitling the holder to purchase one share of Churchill common stock at a price of  $11.50 per share commencing upon the later of  (i) 30 days after Churchill’s completion of a business combination and (ii) September 11, 2019. Pursuant to the terms of the warrants, each such warrant will automatically entitle the holder to purchase one ordinary share of Clarivate in lieu of one share of Churchill common stock upon consummation of the business combination.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION, DATED FEBRUARY 27, 2019
CHURCHILL CAPITAL CORP
640 Fifth Avenue, 12 th Floor
New York, NY 10019
NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON            , 2019
TO THE STOCKHOLDERS OF CHURCHILL CAPITAL CORP
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Churchill Capital Corp (“Churchill”), a Delaware corporation, will be held at             a.m. eastern time, on            , 2019, at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to Churchill, at 1285 Avenue of the Americas, New York, New York 10019. You are cordially invited to attend the special meeting, which will be held for the following purposes:
(1)
to consider and vote upon a proposal to approve the business combination described in this proxy statement/prospectus, including (a) the Agreement and Plan of Merger, dated as of January 14, 2019 (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated February 26, 2019, the “Merger Agreement”), by and among Churchill, Clarivate Analytics Plc (“Clarivate”), a public limited company newly incorporated under the laws of Jersey, Channel Islands, and currently owned 50% by Onex Partners IV LP and 50% by Onex Partners IV GP LP, CCC Merger Sub, Inc., a newly formed Delaware corporation and wholly owned subsidiary of Clarivate (“Delaware Merger Sub”), Camelot Merger Sub (Jersey) Limited, a newly formed private limited company organized under the laws of Jersey, Channel Islands and wholly owned subsidiary of Clarivate (“Jersey Merger Sub”), and Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of Jersey, Channel Islands (“Company”), which, among other things, provides for (i) Jersey Merger Sub to be merged with and into the Company with the Company being the surviving company in the merger (the “Jersey Merger”) and (ii) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in the merger (the “Delaware Merger”, and together with the Jersey Merger the “Mergers” and the Mergers, together with the other transactions contemplated by the Merger Agreement, the “Transactions”) and (b) the other transactions contemplated by the Merger Agreement and related Sponsor Agreement described in this proxy statement/prospectus — we refer to this proposal as the “business combination proposal”;
(2)
to consider and vote upon separate proposals to approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation: (i) the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”; (ii) Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and (iii) Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time) — we refer to these proposals collectively as the “charter proposals”; and
(3)
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 Churchill is unable to consummate the business combination contemplated by the Merger Agreement — we refer to this proposal as the “adjournment proposal.”
These items of business are described in the attached proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of Churchill common stock at the close of business on            , 2019 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

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After careful consideration, Churchill’s board of directors has determined that the business combination proposal, the charter proposals and the adjournment proposal are fair to and in the best interests of Churchill and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” each of the charter proposals and “FOR” the adjournment proposal, if presented.
Consummation of the Transactions is conditional on approval of each of the business combination proposal and the charter proposals. If any of the proposals is not approved, the other proposals will not be presented to stockholders for a vote.
All Churchill stockholders are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record of Churchill common stock, you may also cast your vote in person at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker or bank.
A complete list of Churchill stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of Churchill for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors
   
/s/ Michael Klein
Michael Klein
Chairman of the Board and Director
           , 2019
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE CHURCHILL REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO CHURCHILL’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANKS OR BROKERS TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “ SPECIAL MEETING OF CHURCHILL STOCKHOLDERS — REDEMPTION RIGHTS ” FOR MORE SPECIFIC INSTRUCTIONS.
This proxy statement/prospectus is dated            , 2019 and is first being mailed to Churchill stockholders, on or about            , 2019.

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The information in this proxy statement/prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commissions is effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 27, 2019
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS OF
CHURCHILL CAPITAL CORP
PROSPECTUS FOR UP TO 69,200,000 ORDINARY SHARES
AND 34,712,174 ORDINARY SHARES UNDERLYING WARRANTS
OF
CLARIVATE ANALYTICS PLC
The board of directors of Churchill Capital Corp, a Delaware corporation (“Churchill”), has unanimously approved the Agreement and Plan of Merger, dated as of January 14, 2019 (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated February 26, 2019, the “Merger Agreement”), by and among Churchill, Clarivate, Delaware Merger Sub, Jersey Merger Sub and the Company which, among other things, provides for (a) Jersey Merger Sub to be merged with and into the Company with the Company being the surviving company in such merger (the “Jersey Merger”) and (b) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in such merger (the “Delaware Merger”, together with the Jersey Merger the “Mergers” and the Mergers, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). As a result of and upon consummation of the Transactions, Churchill and the Company will become wholly owned subsidiaries of Clarivate, with the security holders of the Company and security holders of Churchill becoming security holders of Clarivate.
Pursuant to the Merger Agreement, each outstanding share of common stock of Churchill shall be converted into one ordinary share of Clarivate. The outstanding warrants of Churchill shall, by their terms, automatically entitle the holders to purchase ordinary shares of Clarivate upon consummation of the business combination. Accordingly, this proxy statement/prospectus covers an aggregate of 69,200,000 ordinary shares of Clarivate and the 34,712,174 ordinary shares underlying such warrants of Clarivate issuable to the stockholders of Churchill following consummation of the Transactions.
Proposals to approve the Merger Agreement and the other matters discussed in this proxy statement/​prospectus will be presented at the special meeting of stockholders of Churchill scheduled to be held on            , 2019.
Churchill’s units, common stock and warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols CCC.U, CCC and CCC WS, respectively. Clarivate intends to apply for listing, to be effective at the time of the business combination, of its ordinary shares and warrants on the NYSE under the symbols CCC and CCC WS, respectively. Clarivate will not have units traded following consummation of the business combination. It is a condition of the consummation of the business combination that Clarivate’s ordinary shares are approved for listing on the NYSE, but there can be no assurance such listing condition will be met. If such listing condition is not met, the Transactions will not be consummated unless the listing condition set forth in the Merger Agreement is waived by the parties.
Each of Churchill and Clarivate is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to comply with certain reduced public company reporting requirements.
This proxy statement/prospectus provides you with detailed information about the Transactions and other matters to be considered at the special meeting of Churchill’s stockholders. We encourage you to carefully read this entire document. You should also carefully consider the risk factors described in “ Risk Factors ” beginning on page 32 .
These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.
This proxy statement/prospectus is dated            , 2019, and is first being mailed to Churchill stockholders on or about            , 2019.

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FREQUENTLY USED TERMS
Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:
2016 Transaction ” are to separation of the Company’s business from Thomson Reuters pursuant to the Carve-out Acquisition Agreement;
A&R Shareholders Agreement ” are to the Amended and Restated Shareholders Agreement of Clarivate, dated January 14, 2019, entered into among the Company, Clarivate and the Company Owners;
ACV ” or “ annualized contr act value ” are to the annualized value for a 12 -month period following a given date of all subscription-based client license agreements, assuming that all license agreements that come up for renewal during that period are renewed;
amended and restated certificate of incorporation ” are to Churchill’s certificate of incorporation currently in effect;
annual revenue renewal rates ” are to the metric used to determine renewal levels by existing customers across all of the Company’s product lines, and is a leading indicator of subscription renewal trends, which impact the Company’s ACV and results of operations and is calculated for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements;
APAC ” are to Australia, Brunei Darussalam, Cambodia, China, East Timor, Fiji, French Polynesia, Guam, Hong Kong, Indonesia, Japan, Kiribati, Macau, Malaysia, Maldives, Micronesia, Mongolia, Myanmar (Burma), New Caledonia, New Zealand, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Islands, South Korea, Taiwan, Thailand, Thailand — BOI, Thailand — Non BOI, Tonga, Vanuatu and Vietnam;
Articles ” or “ articles of association ” are to Clarivate’s amended and restated memorandum of association and amended and restated articles of association to be adopted in connection with the consummation of the Transactions;
Available Cash ” are to, as of immediately prior to the consummation of the Transactions, the aggregate amount equal to (i) the cash available to be released from Churchill’s trust account, plus (ii) the cash held by Churchill outside of the trust account, minus (iii) the sum of all payments to be made as a result of the completion of the redemption offer for shares of Churchill common stock and any redemptions or conversions of Churchill common stock by any redeeming stockholders, minus (iv) certain fees and expenses described in the Merger Agreement (which Churchill currently estimates will be approximately $45.9 million in the aggregate), plus (v) the aggregate amount of cash received by Churchill from JMJS Group — II, LP (an affiliate of Jerre Stead) and Michael Klein pursuant to the Sponsor Agreement (which is expected to be $15 million from the purchase of 1,500,000 shares of common stock of Churchill immediately prior to the consummation of the Transactions);
business combination ” are to the transactions contemplated by the Merger Agreement and related agreements;
Baring ” are to the affiliated funds of Baring Private Equity Asia Pte Ltd that from time to time hold ordinary shares of the Company prior to the closing of the transactions or hold ordinary shares of Clarivate following the closing of the Transactions;
Carve-out Acquisition Agreement ” are to certain stock and asset purchase agreement, including all exhibits and schedules thereto, dated as of July 10, 2016, by and among Thomson Reuters Global Resources, Thomson Reuters U.S. LLC, Thomson Reuters Corporation and Camelot UK Bidco Limited, and all side letters and other agreements related thereto, in each case, as amended;
Churchill IPO ” are to the initial public offering by Churchill which closed on September 11, 2018;
Clarivate warrants ” are to the warrants exercisable to purchase ordinary shares of Clarivate following the conversion of Churchill’s existing warrants in the Mergers;
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common stock ” are to Churchill’s Class A common stock and Class B common stock;
Company Owners ” are to the shareholders of the Company prior to the closing of the Transactions;
completion window ” are to the period following the completion of Churchill’s IPO at the end of which, if Churchill has not completed the business combination, it will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to Churchill to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions and as further described herein. The completion window ends on September 11, 2020;
Credit Agreement ” are to the Company’s credit agreement, dated as of October 3, 2016, governing the Term Loan Facility and the Revolving Credit Facility, as amended and/or supplemented from time to time;
Credit Facilities ” are to the Revolving Credit Facility and the Term Loan Facility;
Designated Stock Exchange ” are to the NYSE or any other stock exchange or automated quotation system on which Clarivate’s securities are then traded;
DGCL ” are to the Delaware General Corporation Law, as amended;
Director Nomination Agreement ” are to the Director Nomination Agreement to be entered into between Clarivate and Jerre Stead at the closing of the Transactions;
Emerging Markets ” are to Afghanistan, Algeria, Angola, Anguilla, Antigua and Barbuda, Argentina, Armenia, Aruba, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bermuda, Bhutan, Bolivia, Botswana, Brazil, British Virgin Islands, Burundi, Cameroon, Cape Verde, Cayman Islands, Central African Republic, Chile, Colombia, Comoros Costa Rica, Cuba, Curacao, Cyprus, Democratic Republic of Congo, Djibouti, Dominica, Dominican Republic, Dutch Antilles, Ecuador, Egypt, El Salvador, Equatorial Guinea, Ethiopia, Gabon, Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Guyana, Haiti, Honduras, India, Iran, Iraq, Jamaica, Jordan, Kazakhstan, Kenya, Kuwait, Kyrgyzstan, Lebanon, Lesotho, Liberia, Libya, Madagascar, Malawi, Malta, Mauritius, Mexico, Middle East, Montserrat, Morocco, Mozambique, Namibia, Nepal, Nicaragua, Niger, Nigeria, Oman, Other Africa, Pakistan, Panama, Paraguay, Peru, Puerto Rico, Qatar, Russia, Rwanda, Saint Kitts & Nevis, Saint Lucia, Saudi Arabia, Senegal, Seychelles, South Africa, Sri Lanka, St. Vincent & Grenadines, Suriname, Syria, Tanzania, Trinidad & Tobago, Tunisia, Turkey, Turkmenistan, Turks and Caicos Islands, Uganda, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Venezuela, Yemen, Zambia and Zimbabwe;
Europe ” are to Albania, Andorra, Austria, Belgium, Bosnia And Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, England, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Israel, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Scotland, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and Wales;
founders ” are to Jerre Stead, Michael S. Klein, Sheryl von Blucher, Martin Broughton, Karen G. Mills, Balakrishnan S. Iyer, M. Klein Associates, Inc., The Iyer Family Trust dated 1/25/2001, Mills Family I, LLC and K&BM LP;
founder shares ” are to shares of Churchill’s Class B common stock and Churchill’s Class A common stock issued upon the automatic conversion thereof at the time of Churchill’s initial business combination as provided herein. The founder shares are held of record by the sponsor as of the record date. The 17,250,000 founder shares are distributable to the founders and Garden State, subject to the right of certain third party investors to purchase up to 200,000 of such founder shares upon the closing of the Transactions;
Garden State ” are to Garden State Capital Partners LLC, a Delaware limited liability company, in which Michael Klein holds an equity interest and is the managing member;
initial stockholders ” are to Churchill’s sponsor and any other holders of Churchill’s founder shares immediately prior to this offering;
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Klein Group ” are to The Klein Group, LLC, an affiliate and wholly owned subsidiary of M. Klein and Company;
letter agreement ” are to the letter agreement, dated September 6, 2018, from the sponsor to Churchill and the founders;
M. Klein and Company ” are to M. Klein and Company, LLC, a Delaware limited liability company, and its affiliates;
North America ” are to Canada and the United States;
Onex ” are to the affiliates of Onex Partners Advisor LP that from time to time hold ordinary shares of the Company prior to the closing of the Transactions or hold ordinary shares of Clarivate following the closing of the Transactions;
private placement warrants ” are to Churchill’s warrants issued to the sponsor in a private placement simultaneously with the closing of the Churchill IPO. Of the 18,300,000 private placement warrants, 212,174 are held by certain third party investors and the remainder are held by the sponsor and are distributable to the founders and Garden State;
public shares ” are to shares of Churchill’s Class A common stock sold as part of the units in the Churchill IPO (whether they were purchased in the Churchill IPO or thereafter in the open market);
public stockholders ” are to the holders of Churchill’s public shares, including the sponsor and Churchill’s officers and directors to the extent the sponsor and Churchill’s officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;
public warrants ” are to Churchill’s warrants sold as part of the units in the Churchill IPO (whether they were purchased in the Churchill IPO or thereafter in the open market);
Registration Rights Agreement ” are to the Amended and Restated Registration Rights Agreement to be entered into at the closing of the Transactions among Clarivate, Churchill, sponsor, the founders, Garden State and the Company Owners;
Revolving Credit Facility ” are to the Company’s $175 million revolving credit facility, which expires on October 3, 2021 and is governed by the Credit Agreement;
SEC ” are to the Securities and Exchange Commission;
sponsor ” are to Churchill Sponsor LLC, a Delaware limited liability company and an affiliate of M. Klein and Company in which certain of Churchill’s directors and officers hold membership interests;
Sponsor Agreement ” are to the letter agreement, dated January 14, 2019, among Churchill, the Company, Clarivate, sponsor, the founders and Garden State, which amended and restated the letter agreement;
TRA Parties ” are to the Company Owners along with their assigns, as parties to the Tax Receivable Agreement;
Tax Receivable Agreement ” are to the tax receivable agreement to be entered by the Company with the Company Owners prior to the consummation of the business combination;
Term Loan Facility ” are to the Company’s $1.55 billion term loan facility, which matures on October 3, 2023 and is governed by the Credit Agreement;
Thomson Reuters ” are to Thomson Reuters Corporation and its controlled entities;
Transactions ” are to the Mergers, together with the other transactions contemplated by the Merger Agreement;
Transition ” are to the Company’s transition to a standalone company following the closing of the 2016 Transaction;
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Transition Services Agreement ” are to the Transition Services Agreement, dated July 10, 2016, between Thomson Reuters U.S. LLC and Camelot UK Bidco Limited, an indirect wholly owned subsidiary of the Company, as amended; and
warrants ” are to the public warrants and the private placement warrants.
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TRADEMARKS, TRADE NAMES AND SERVICE MARKS
Clarivate, the Company, Churchill and their respective subsidiaries own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this proxy statement/prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this proxy statement/prospectus are listed without the applicable ® , ™ and SM symbols, but they will assert, to the fullest extent under applicable law, their rights to these trademarks, trade names and service marks.
SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS
The parties to the Transactions are Churchill, Clarivate, Delaware Merger Sub, Jersey Merger Sub and the Company. Pursuant to the Merger Agreement, (a) Jersey Merger Sub will be merged with and into the Company with the Company being the surviving company in the Jersey Merger and (b) Delaware Merger Sub will be merged with and into Churchill with Churchill being the surviving corporation in the Delaware Merger. See the section entitled “ The Merger Agreement .”
The Company is the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets. Corporations, government agencies, universities, law firms and other professional services organizations around the world depend on the Company’s high-value, curated content, analytics and services. Unstructured data has grown exponentially over the last decade. This trend has resulted in a critical need for unstructured data to be meaningfully filtered, analyzed and curated into relevant information that facilitates key operational and strategic decisions made by businesses, academic institutions and governments worldwide. The Company has benefitted from this trend, and Churchill believes it will continue to benefit from this trend.
Under the Merger Agreement, Company Owners will receive an aggregate of 217.5 million ordinary shares of Clarivate (subject to certain adjustments). See the section entitled “ The Business Combination Proposal — Structure of the Transactions.
Each outstanding share of common stock of Churchill shall be converted into one ordinary share of Clarivate. The outstanding warrants of Churchill shall, by their terms, automatically entitle the holders to purchase ordinary shares of Clarivate upon consummation of the business combination. Accordingly, at the closing of the Transactions, the Company Owners will hold approximately 74% of the issued and outstanding ordinary shares of Clarivate and current stockholders of Churchill will hold approximately 26% of the issued and outstanding shares of Clarivate (assuming no holder of Churchill’s public shares exercises redemption rights as described in this proxy statement/prospectus and excluding the impact of (i) 52.8 million warrants, (ii) approximately 24.5 million compensatory options issued to the Company’s management (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018) and (iii) 10.6 million ordinary shares of Clarivate owned of record by the sponsor and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher following the expiration of applicable lock-up and vesting restrictions). After giving effect to the satisfaction of the vesting restrictions, the Company Owners will hold approximately 71% of the issued and outstanding ordinary shares of Clarivate. See the section entitled “ The Business Combination Proposal — Pro Forma Ownership of the Company Owners and Churchill Holders.
The sponsor, the founders and Garden State entered into the Sponsor Agreement pursuant to which they have agreed to comply with the provisions of the Merger Agreement applicable to such persons as well as the covenants set forth in the Sponsor Agreement, including voting all shares of common stock of Churchill beneficially owned by such persons in favor of the Transactions. The Sponsor Agreement provides that the ordinary shares of Clarivate and Clarivate warrants to be issued to such persons in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two years, under certain circumstances). The Sponsor Agreement also provides that the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and
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available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher, and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State, in each case, will be subject to certain time and performance-based vesting provisions as described under “ The Business Combination Proposal — Sponsor Agreement.
The Merger Agreement provides that either Churchill or the Company may terminate the Merger Agreement if the Transactions are not consummated by July 31, 2019. Additionally, the Merger Agreement may be terminated, among other reasons, by either Churchill or the Company upon a material breach of the other party if not cured within thirty days of delivery to such party of a notice of an intent to terminate. See the section entitled “ The Merger Agreement — Conditions to Closing of the Transactions.
In addition to voting on the Transactions, the stockholders of Churchill will vote on separate proposals to approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation: (i) the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”; (ii) Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and (iii) Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time). This vote, however, will not actually result in stockholders of Churchill approving Clarivate’s constitutional documents or amendments to Churchill’s corporate governing documents but instead will simply approve the aforementioned material differences in the two sets of documents. The stockholders of Churchill will also vote on a proposal to approve, if necessary, an adjournment of the special meeting. See the sections entitled “ The Charter Proposals ” and “ The Adjournment Proposal .”
The parties expect that upon consummation of the Transactions, the board will consist of fourteen (14) directors, which will be reduced to thirteen (13) directors at the end of 2020. Upon completion of the Transactions, the executive officers of Clarivate will include Jerre Stead (Executive Chairman of the Board of Directors), Jay Nadler (Chief Executive Officer), Richard Hanks (Chief Financial Officer) and Stephen Hartman (General Counsel and Global Head of Corporate Development), as well as those persons described under “ Information about Executive Officers, Directors and Nominees .” These individuals, other than Jerre Stead, currently hold the same positions with the Company. See the section entitled “ Information about Executive Officers, Directors and Nominees .”
Pursuant to the Registration Rights Agreement, the sponsor, the founders, Garden State and the Company Owners will be granted certain rights to have registered, in certain circumstances, the resale under the Securities Act of 1933, as amended (the “Securities Act”) of the ordinary shares of Clarivate received by them in the Transactions and the Clarivate warrants held by them following the consummation of the Transactions, subject to certain conditions set forth therein. See the section entitled “ The Business Combination Proposal — Related Agreements — Registration Rights Agreement .” Pursuant to the A&R Shareholders Agreement, Onex and Baring will be granted certain rights to nominate members of the board of Clarivate following the closing of the Transactions, subject to certain conditions set forth therein. Pursuant to the Director Nomination Agreement, Jerre Stead or his successor pursuant to the terms of the Director Nomination Agreement will be granted certain rights to nominate members of the board of Clarivate following the closing the Transactions, subject to certain conditions set forth therein. See the sections entitled “ The Business Combination Proposal — Related Agreements — Amended and Restated Shareholders Agreement ” and “ The Business Combination Proposal — Related Agreements — Director Nomination Agreement .”
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the proposed business combination. The following questions and answers do not include all the information that is important to Churchill stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed business combination and the voting procedures for the special meeting.
Q.
Why am I receiving this proxy statement/prospectus?
A.
Churchill and the Company have agreed to a business combination under the terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A-1 , as amended by Annex A-2 (together, “Annex A”), and Churchill encourages its stockholders to read it in its entirety. Churchill’s stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement, which, among other things, provides for (a) Jersey Merger Sub to be merged with and into the Company with the Company being the surviving corporation in the Jersey Merger and (b) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in the Delaware Merger See the section entitled “ The Business Combination Proposal .”
Q.
Are there any other matters being presented to stockholders at the meeting?
A.
In addition to voting on the business combination, the stockholders of Churchill will vote on the following:
1.
Separate proposals to approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation: (i) the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”; (ii) Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and (iii) Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time). This vote, however, will not actually result in stockholders of Churchill approving Clarivate’s constitutional documents or amendments to Churchill’s corporate governing documents but instead will simply approve the aforementioned material differences in the two sets of documents. See the section entitled “ The Charter Proposals .”
2.
To adjourn the meeting to a later date or dates to permit further solicitation and vote of proxies if Churchill would not have been able to consummate the business combination. See the section entitled “ The Adjournment Proposal .”
Churchill will hold the special meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed business combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.
Consummation of the Transactions is conditional on approval of each of the business combination proposal and the charter proposals. If any of the proposals is not approved, the other proposals will not be presented to stockholders for a vote.
The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.
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Q.
I am a Churchill warrant holder. Why am I receiving this proxy statement/prospectus?
A.
Upon consummation of the Transactions, the Churchill warrants shall, by their terms, entitle the holders to purchase ordinary shares of Clarivate in lieu of shares of Churchill common stock at a purchase price of  $11.50 per share. This proxy statement/prospectus includes important information about Clarivate and the business of Clarivate and its subsidiaries following consummation of the Transactions. As holders of Churchill warrants will be entitled to purchase ordinary shares of Clarivate upon consummation of the Transactions, Churchill urges you to read the information contained in this proxy statement/prospectus carefully.
Q.
Why is Churchill proposing the business combination?
A.
Churchill was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.
On September 11, 2018, Churchill completed its initial public offering of units, with each unit consisting of one share of its common stock and one-half of one warrant, each whole warrant to purchase one share of common stock at a price of  $11.50, raising total gross proceeds of approximately $690,000,000. Since the Churchill IPO, Churchill’s activity has been limited to the evaluation of business combination candidates.
The Company is the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets. Corporations, government agencies, universities, law firms and other professional services organizations around the world depend on the Company’s high-value, curated content, analytics and services. Unstructured data has grown exponentially over the last decade. This trend has resulted in a critical need for unstructured data to be meaningfully filtered, analyzed and curated into relevant information that facilitates key operational and strategic decisions made by businesses, academic institutions and governments worldwide. The Company has benefitted from this trend, and Churchill believes it will continue to benefit from this trend.
Based on its due diligence investigations of the Company and the industry in which it operates, including the financial and other information provided by the Company in the course of their negotiations in connection with the Merger Agreement, Churchill believes that the Company has a leading position in global markets, diversified product lines, longstanding customer relationships and a management team with skills that are complementary to those of Churchill’s co-founder Jerre Stead, who will become Executive Chairman of the combined company. As a result, Churchill believes that a business combination with the Company will provide Churchill stockholders with an opportunity to participate in the ownership of a company with significant growth potential. See the section entitled “ The Business Combination Proposal — Churchill’s Board of Directors’ Reasons for Approval of the Transactions.
Q.
Did the Churchill board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination?
A.
Churchill’s board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the business combination with the Company. The officers and directors of Churchill and Churchill’s advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Churchill’s financial advisors, enabled them to make the necessary analyses and determinations regarding the business combination with the Company. In addition, Churchill’s officers and directors and Churchill’s advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of Churchill’s board of directors and Churchill’s advisors in valuing the Company’s business.
Q.
Do I have redemption rights?
A.
If you are a holder of public shares, you have the right to demand that Churchill redeem such shares for a pro rata portion of the cash held in Churchill’s trust account provided that you vote either for or
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against the business combination proposal. Churchill sometimes refers to these rights to demand redemption of the public shares as “redemption rights.”
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) will be restricted from seeking redemption with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed.
Under Churchill’s amended and restated certificate of incorporation, the business combination may be consummated only if Churchill has at least $5,000,001 of net tangible assets after giving effect to all holders of public shares that properly demand redemption of their shares for cash. However, the Company is not required to consummate the Transactions if there is not at least $550,000,000 of Available Cash.
Q.
How do I exercise my redemption rights?
A.
If you are a holder of public shares and wish to exercise your redemption rights, you must (i) demand that Churchill redeem your shares into cash no later than the second business day preceding the vote on the business combination proposal by delivering your stock to Churchill’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the special meeting. Any holder of public shares will be entitled to demand that such holder’s shares be redeemed for a full pro rata portion of the amount then in the trust account (which, for illustrative purposes, was $           , or $            per share, as of            , 2019, the record date). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the business combination. However, under Delaware law, the proceeds held in the trust account could be subject to claims which could take priority over those of Churchill’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the business combination proposal. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the business combination proposal will have no impact on the amount you will receive upon exercise of your redemption rights.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the business combination proposal at the special meeting. If you deliver your shares for redemption to Churchill’s transfer agent and later decide prior to the special meeting not to elect redemption, you may request that Churchill’s transfer agent return the shares (physically or electronically). You may make such request by contacting Churchill’s transfer agent at the address listed at the end of this section.
Any corrected or changed proxy card or written demand of redemption rights must be received by Churchill’s transfer agent prior to the vote taken on the business combination proposal at the special meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent prior to the vote at the special meeting.
If a holder of public shares votes for or against the business combination proposal and demand is properly made as described above, then, if the business combination is consummated, Churchill will redeem these shares for a pro rata portion of funds deposited in the trust account. If you exercise your redemption rights, then you will be exchanging your shares of Churchill common stock for cash and will not be entitled to ordinary shares of Clarivate upon consummation of the Transactions.
If you are a holder of public shares and you exercise your redemption rights, it will not result in the loss of any Churchill warrants that you may hold. Your whole warrants will become exercisable to purchase one ordinary share of Clarivate in lieu of one share of Churchill common stock for a purchase price of  $11.50 upon consummation of the business combination.
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Q.
Do I have appraisal rights if I object to the proposed business combination?
A.
No. Neither Churchill stockholders nor its unit or warrant holders have appraisal rights in connection with the business combination under the DGCL. See the section entitled “ Special Meeting of Churchill Stockholders — Appraisal Rights.
Q.
What happens to the funds deposited in the trust account after consummation of the business combination?
A.
Of the net proceeds of the Churchill IPO, $676,200,000, together with $18,300,000 of the amount raised from the private sale of warrants simultaneously with the consummation of the Churchill IPO, for a total of  $690,000,000, was placed in the trust account immediately following the Churchill IPO. After consummation of the business combination, the funds in the trust account will be used to pay holders of the public shares who exercise redemption rights, to pay fees and expenses incurred in connection with the business combination (including aggregate fees of approximately $24,150,000 to the underwriters of the Churchill IPO as deferred underwriting commissions) and for Clarivate’s working capital and general corporate purposes, including to pay down a portion of the Company’s debt.
Q.
What happens if a substantial number of public stockholders vote in favor of the business combination proposal and exercise their redemption rights?
A.
Churchill’s public stockholders may vote in favor of the business combination and still exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the trust account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders. However, the Company is not required to consummate the Transactions if there is not at least $550,000,000 of Available Cash. Also, with fewer public shares and public stockholders, the trading market for Clarivate’s ordinary shares may be less liquid than the market for Churchill’s shares of common stock were prior to the Transactions and Clarivate may not be able to meet the listing standards of a national securities exchange. In addition, with fewer funds available from the trust account, the capital infusion from the trust account into the Company’s business will be reduced and the Company may not be able to achieve its plan of reducing its outstanding indebtedness.
Q.
What happens if the business combination is not consummated?
A.
If Churchill does not complete the business combination with the Company for whatever reason, Churchill would search for another target business with which to complete a business combination. If Churchill does not complete the business combination with the Company or another target business by September 11, 2020, Churchill must redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the amount then held in the trust account divided by the number of outstanding public shares. The sponsor, founders and Garden State have no redemption rights in the event a business combination is not effected in the required time period, and, accordingly, their founder shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to Churchill’s outstanding warrants. Accordingly, the warrant will expire worthless.
Q.
How does the sponsor intend to vote on the proposals?
A.
The sponsor owns of record and is entitled to vote an aggregate of 20% of the outstanding shares of Churchill’s common stock. The sponsor, the founders and Garden State have agreed to vote any founder shares and any public shares held by them as of the record date, in favor of the Transactions.
Q.
When do you expect the business combination to be completed?
A.
It is currently anticipated that the business combination will be consummated promptly following the Churchill special meeting which is set for            , 2019; however, such meeting could be adjourned, as described above. For a description of the conditions to the completion of the business combination, see the section entitled “ The Merger Agreement — Conditions to the Closing of the Transactions.
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Q.
What do I need to do now?
A.
Churchill urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the business combination will affect you as a stockholder and/or warrant holder of Churchill. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.
Q.
How do I vote?
A.
If you are a holder of record of Churchill common stock on the record date, you may vote in person at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker, bank or nominee.
Q.
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A.
No. Your broker, bank or nominee cannot vote your shares unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.
Q.
May I change my vote after I have mailed my signed proxy card?
A.
Yes. Stockholders may send a later-dated, signed proxy card to Churchill’s transfer agent at the address set forth at the end of this section so that it is received prior to the vote at the special meeting or attend the special meeting in person and vote. Stockholders also may revoke their proxy by sending a notice of revocation to Churchill’s transfer agent, which must be received prior to the vote at the special meeting.
Q.
What happens if I fail to take any action with respect to the special meeting?
A.
If you fail to take any action with respect to the special meeting and the business combination is approved by stockholders and consummated, you will become a shareholder of Clarivate and/or your warrants will entitle you to purchase ordinary shares of Clarivate. As a corollary, failure to vote either for or against the business combination proposal means you will not have any redemption rights in connection with the business combination to exchange your shares of common stock for a pro rata share of the funds held in Churchill’s trust account. If you fail to take any action with respect to the special meeting and the business combination is not approved, you will continue to be a stockholder and/or warrant holder of Churchill.
Q.
What should I do with my stock and/or warrants certificates?
A.
Those stockholders who do not elect to have their Churchill shares redeemed for the pro rata share of the trust account should not submit their stock certificates now. After the consummation of the business combination, Clarivate will send instructions to Churchill stockholders regarding the exchange of their Churchill common stock for ordinary shares of Clarivate. Churchill stockholders who exercise their redemption rights must deliver their stock certificates to Churchill’s transfer agent (either physically or electronically) prior to the vote at the special meeting as described above.
Upon consummation of the Transactions, Churchill’s warrants, by their terms, will entitle holders to purchase ordinary shares of Clarivate. Therefore, warrant holders need not deliver their warrants to Churchill or Clarivate at that time.
Q.
What should I do if I receive more than one set of voting materials?
A.
Stockholders 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
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your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered 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 that you receive in order to cast a vote with respect to all of your Churchill shares.
Q.
Who can help answer my questions?
A.
If you have questions about the Transactions or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:
Churchill Capital Corp
640 Fifth Avenue, 12 th Floor
New York, NY 10019
Tel: (212) 380-7500
Email: info@churchillcapitalcorp.com
or:
Robert Marese
MacKenzie Partners, Inc.
1407 Broadway
New York, NY 10018
Tel: (212) 929-5500
Email: proxy@mackenziepartners.com
You may also obtain additional information about Churchill from documents filed with the SEC by following the instructions in the section entitled “ Where You Can Find More Information. ” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your stock (either physically or electronically) to Churchill’s transfer agent at the address below prior to the vote at the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:
Mr. Isaac Kagan
Continental Stock Transfer & Trust Company
1 State Street 30 th Floor
New York, New York 10004
E-mail: ikagan@continentalstock.com
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the special meeting, including the business combination, you should read this entire document carefully, including the Merger Agreement attached as Annex A to this proxy statement/prospectus. The Merger Agreement is the legal document that governs the Transactions that will be undertaken in connection with the business combination. It is also described in detail in this proxy statement/prospectus in the section entitled “The Merger Agreement.”
The Parties
Churchill
Churchill Capital Corp is a blank check company formed in order to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities. Churchill was incorporated under the laws of Delaware on June 20, 2018.
On September 11, 2018, Churchill closed its initial public offering of 69,000,000 units, including the exercise of the over-allotment option to the extent of 9,000,000 units, with each unit consisting of one share of its common stock and one-half of one warrant, each whole warrant to purchase one share of its common stock at a purchase price of  $11.50 commencing upon the later of  (i) 30 days after Churchill’s completion of a business combination and (ii) September 11, 2019. The units from the Churchill IPO were sold at an offering price of  $10.00 per unit, generating total gross proceeds of  $690,000,000. Simultaneously with the consummation of the Churchill IPO and the exercise of the underwriters’ over-allotment option, Churchill consummated the private sale of 18,300,000 warrants at $1.00 per warrant for an aggregate purchase price of  $18,300,000. A total of  $690,000,000, was deposited into the trust account and the remaining net proceeds became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The Churchill IPO was conducted pursuant to a registration statement on Form S-1 (Reg. No. 333-226928) that became effective on September 6, 2018. As of            , 2019, the record date, there was approximately $            held in the trust account.
Churchill’s units, common stock and warrants are listed on the NYSE under the symbols CCC.U, CCC and CCC WS, respectively.
The mailing address of Churchill’s principal executive office is 640 Fifth Avenue, 12 th Floor, New York, NY 10019. Its telephone number is (212) 380-7500. After the consummation of the business combination, its principal executive office will be that of the Company.
Clarivate
Clarivate Analytics Plc is a subsidiary owned 50% by Onex Partners IV LP and 50% by Onex Partners IV GP LP and was formed solely for the purpose of effectuating the Transactions described herein. Clarivate was incorporated under the laws of Jersey, Channel Islands, as a public limited company on January 7, 2019. Clarivate owns no material assets and does not operate any business.
Onex Partners IV LP and Onex Partners IV GP LP each holds one ordinary share in Clarivate, being the only shares currently in issue. The mailing address of Clarivate’s principal executive office is 4th Floor, St. Paul’s Gate, 22-24 New Street, St. Helier, Jersey JE1 4TR. Its telephone number is +44 153 450 4700 (ext. 4531). After the consummation of the business combination, its principal executive office will be located at Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK, which is the Company’s corporate headquarters. Its telephone number is +44 207 433 4000.
Delaware Merger Sub
CCC Merger Sub, Inc. is a wholly owned subsidiary of Clarivate formed solely for the purpose of effectuating the Delaware Merger described herein. Delaware Merger Sub was incorporated under the laws of Delaware as a corporation on January 7, 2019. Delaware Merger Sub owns no material assets and does not operate any business.
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The mailing address of Delaware Merger Sub’s principal executive office is 1500 Spring Garden, Philadelphia, PA 19130, USA and its telephone number is (215) 386-0100. After the consummation of the business combination, Delaware Merger Sub will cease to exist as a separate legal entity.
Jersey Merger Sub
Camelot Merger Sub (Jersey) Limited is a wholly owned subsidiary of Clarivate formed solely for the purpose of effectuating the Jersey Merger described herein. Jersey Merger Sub was formed under the laws of Jersey, Channel Islands, as a private limited company on January 7, 2019. Jersey Merger Sub owns no material assets and does not operate any business.
The mailing address of Jersey Merger Sub’s principal executive office is Clarivate Merger Sub (Jersey) Limited, 4th Floor, St. Paul’s Gate, 22-24 New Street, St. Helier, Jersey JE1 4TR. After the consummation of the business combination, Jersey Merger Sub will cease to exist as a separate legal entity.
Company Owners
Onex
Founded in 1984, Onex Corporation is one of North America’s oldest and most successful private equity firms. Onex is focused on acquiring and building market-leading businesses and currently owns interests in a broad range of companies aggregating $32 billion in annual revenues and $52 billion in assets, and employing approximately 218,000 people worldwide.
Over Onex’s 35-year history, Onex has built more than 100 operating businesses and completed approximately 615 acquisitions with a total value of over $76 billion. Today, Onex has approximately $33 billion of assets under management, operates from offices in Toronto, New York, London and New Jersey and is listed on the Toronto Stock Exchange (TSX:OCX). Onex’s large-cap private equity investing activity is conducted through the Onex Partners funds, including Onex Partners V LP, an investment vehicle with approximately $7.15 billion of funding commitments. Onex has extensive experience investing in operational restructurings, platforms for add-on acquisitions, and carve-outs of subsidiaries from multinational corporations.
Baring Private Equity Asia
Baring Private Equity Asia Group Limited (“BPEA”) is one of the largest and most established independent alternative asset management platforms in Asia, with a total committed capital of over $17 billion. BPEA comprises a pan-Asian private equity investment program, sponsoring buyouts and providing growth capital to companies for expansion or acquisitions with a particular focus on the Asia Pacific region, as well as investing into companies globally that can benefit from further expansion into the Asia Pacific region. BPEA also advises dedicated funds focused on private real estate and private credit. BPEA affiliated funds have been investing in Asia since 1997 and has over 170 employees located across eight Asian offices in Hong Kong, Shanghai, Beijing, Mumbai, Delhi, Singapore, Jakarta and Tokyo. BPEA affiliated funds currently have over 30 portfolio companies active across Asia with a total of 158,000 employees and sales of approximately $31 billion.
The Company
The Company is the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets. Corporations, government agencies, universities, law firms and other professional services organizations around the world depend on the Company’s high-value, curated content, analytics and services. Unstructured data has grown exponentially over the last decade. This trend has resulted in a critical need for unstructured data to be meaningfully filtered, analyzed and curated into relevant information that facilitates key operational and strategic decisions made by businesses, academic institutions and governments worldwide. The Company has benefitted from this trend, and Churchill believes it will continue to benefit from this trend.
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The Company is a private limited company incorporated under the laws of Jersey, Channel Islands and commenced operations in October 2016.
The mailing address of the Company’s principal executive office is Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK , and its telephone number is +44 207 433 4000.
Emerging Growth Company
Each of Churchill and Clarivate is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, they are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find Clarivate’s securities less attractive as a result, there may be a less active trading market for Clarivate’s securities and the prices of Clarivate’s securities may be more volatile.
Clarivate will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the date on which Clarivate ordinary shares were offered in connection with the Transactions, (b) in which it has total annual gross revenues of at least $1.07 billion, or (c) in which it is deemed to be a large accelerated filer, which means the market value of its common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which it has issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
The Business Combination Proposal
Structure of the Transactions
Pursuant to the Merger Agreement, a business combination between Churchill and the Company will be effected through the Jersey Merger, whereby Jersey Merger Sub will merge with and into the Company with the Company surviving such merger, followed by the Delaware Merger, whereby Delaware Merger Sub will merge with and into Churchill, with Churchill surviving such merger.
Consideration to the Company Owners
As consideration for all of the outstanding shares of the Company, the Company Owners will receive 217.5 million ordinary shares of Clarivate (subject to certain adjustments).
Consideration to Churchill Holders
Each outstanding share of common stock of Churchill shall be converted into one ordinary share of Clarivate. The outstanding warrants of Churchill shall, by their terms, automatically entitle the holders to purchase ordinary shares of Clarivate upon consummation of the business combination.
Consideration to Holders of the Company’s Share Options
Outstanding options to purchase ordinary shares in the Company will be converted upon the effective time of the business combination into options to purchase ordinary shares in Clarivate based upon an exchange ratio that is intended to preserve the intrinsic value and economics of such options. For additional information, please read the discussion under the heading “ Director and Executive Officer Compensation — Employee Share Plans .”
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Transfer and Vesting Restrictions on Sponsor, Founders’ and Garden State’s Equity
In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement, which provides, among other things, for (i) the ordinary shares of Clarivate and Clarivate warrants to be issued to such persons in connection with the Mergers to be subject to a three-year lock-up restriction (partially reduced to two-years, under certain circumstances) and (ii) the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher, and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State, in each case, to be subject to certain time and performance-based vesting provisions.
Pro Forma Ownership of the Company Owners and Churchill Holders
At the closing of the Transactions, the Company Owners will hold approximately 74% of the issued and outstanding ordinary shares of Clarivate and the current stockholders of Churchill will hold approximately 26% of the issued and outstanding shares of Clarivate (assuming no holder of public shares exercises redemption rights and excluding the impact of (i) 52.8 million warrants, (ii) approximately 24.5 million compensatory options issued to Company management (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018) and (iii) 10.6 million ordinary shares of Clarivate owned of record by the sponsor and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher following the expiration of applicable lock-up and vesting restrictions. After giving effect to the satisfaction of the vesting restrictions, the Company Owners will hold approximately 71% of the issued and outstanding ordinary shares of Clarivate.
After consideration of the factors identified and discussed in the section entitled “ The Business Combination Proposal — Churchill’s Board of Directors’ Reasons for Approval of the Transactions ,” Churchill’s board of directors concluded that the Transactions met all of the requirements disclosed in the prospectus for the Churchill IPO, including that such business had a fair market value of at least 80% of the balance of the funds in the trust account at the time of execution of the Merger Agreement (excluding the deferred underwriting commissions and amounts disbursed to Churchill’s management for working capital purposes). See the section entitled “ The Business Combination Proposal — Structure of the Transactions ” for more information.
Additional Matters Being Voted On
The Charter Proposals
In addition to voting on the business combination proposal, the stockholders of Churchill will vote on separate proposals to approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation: (i) the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”; (ii) Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and (iii) Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time). This vote, however, will not actually result in stockholders of Churchill approving Clarivate’s constitutional documents or amendments to Churchill’s corporate governing documents but instead will simply approve the aforementioned material differences in the two sets of documents. See the section entitled “ The Charter Proposals .”
The Adjournment Proposal
If Churchill is unable to consummate the business combination, Churchill’s board of directors may submit a proposal to adjourn the special meeting to a later date or dates, if necessary. See the section entitled “ The Adjournment Proposal .”
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Sponsor, Founders and Garden State
As of            , 2019, the record date for the Churchill special meeting, the sponsor held of record and was entitled to vote an aggregate of 17,250,000 founder shares. The sponsor, and through the sponsor, the founders and Garden State also purchased an aggregate of 18,300,000 private placement warrants simultaneously with the consummation of Churchill IPO. The founder shares currently constitute 20% of the outstanding shares of Churchill’s common stock. Pursuant to the Sponsor Agreement, Jerre Stead (either personally or through his designee, JMJS Group-II, LP) and Michael Klein have agreed to purchase from Churchill an aggregate of 1,500,000 shares of Class B common stock of Churchill immediately prior to the closing of the Transactions for an aggregate purchase price of  $15,000,000.
The sponsor, the founders and Garden State have agreed to vote any founder shares and any public shares held by them as of the record date in favor of the Transactions.
The sponsor, the founders and Garden State have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of the Transactions. Additionally, the sponsor, the founders and Garden State have agreed to waive their redemption rights with respect to any founder shares held by them if Churchill fails to consummate its initial business combination within the completion window. However, if the sponsor, the founders or Garden State have acquired or will acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if Churchill fails to consummate Churchill’s initial business combination within the completion window. If Churchill does not complete its initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of Churchill’s public shares, and the private placement warrants will expire worthless.
If the Transactions are consummated, under the Sponsor Agreement (i) the ordinary shares of Clarivate and Clarivate warrants to be issued to the sponsor, the founders and Garden State in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two-years, under certain circumstances) and (ii) the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State, in each case, will be subject to certain time and performance-based vesting provisions.
If the Transactions are not consummated, the founder shares will not be transferable, assignable or salable by the sponsor, the founders or Garden State until the earlier of: (1) one year after the completion of Churchill’s initial business combination; and (2) the date on which Churchill consummates a liquidation, merger, stock exchange, reorganization or other similar transaction after Churchill’s initial business combination that results in all of Churchill’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the Transactions are not consummated and if the last reported sale price of Churchill’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after Churchill’s initial business combination, the founder shares will be released from the lock-up. Since Churchill’s sponsor, officers and directors directly or indirectly own common stock and warrants following the Churchill IPO, Churchill’s officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate Churchill’s initial business combination.
Date, Time and Place of Special Meeting of Churchill’s Stockholders
The special meeting of stockholders of Churchill will be held at            :00 a.m., Eastern time, on            , 2019, at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to Churchill, at 1285 Avenue of the Americas, New York, New York 10019, to consider and vote upon the business combination proposal, the charter proposals and if necessary, the adjournment proposal to permit further solicitation and vote of proxies if Churchill is not able to consummate the Transactions.
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Voting Power; Record Date
Stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of Churchill common stock at the close of business on            , 2019, which is the record date for the special meeting. Stockholders will have one vote for each share of Churchill common stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Churchill warrants do not have voting rights. On the record date, there were 86,250,000 shares of Churchill common stock outstanding, of which 69,000,000 were public shares with the rest being held by the sponsor, and through the sponsor, the founders and Garden State.
Quorum and Vote of Churchill Stockholders
A quorum of Churchill stockholders is necessary to hold a valid meeting. A quorum will be present at the Churchill special meeting if a majority of the outstanding shares entitled to vote at the meeting are represented in person or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The sponsor owns of record and is entitled to vote 20% of the outstanding shares of Churchill common stock. Such shares, as well as any shares of common stock acquired in the aftermarket by the sponsor, the founders or Garden State, will be voted in favor of the proposals presented at the special meeting. The proposals presented at the special meeting will require the following votes:

The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the outstanding shares of common stock on the record date. There are currently 86,250,000 shares of Churchill common stock outstanding so at least 43,125,001 shares must be voted in favor to pass the proposal. The sponsor owns of record and is entitled to vote an aggregate of 17,250,000 founder shares and has agreed to vote in favor of the proposal so only 25,875,001 public shares are required to be voted in favor of the proposal for it to be approved.

The approval of each of the charter proposals will require the affirmative vote of the holders of a majority of the outstanding shares of Churchill common stock on the record date.

The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of common stock present and entitled to vote at the meeting.
Abstentions and broker non-votes will have the same effect as a vote “against” the business combination proposal and the charter proposals. With respect to the adjournment proposal, if presented, abstentions will have the same effect as a vote “against” such proposal while broker non-votes will have no effect on such proposal. Please note that holders of the public shares cannot seek redemption of their shares for cash unless they affirmatively vote for or against the business combination proposal.
Consummation of the Transactions is conditional on approval of each of the business combination proposal and the charter proposals. If any proposal is not approved, the other proposals will not be presented to the stockholders for a vote.
Redemption Rights
Pursuant to Churchill’s amended and restated certificate of incorporation, a holder of public shares may demand that Churchill redeem such shares for cash if the business combination is consummated. Holders of public shares will be entitled to receive cash for these shares only if they (i) demand that Churchill redeem their shares for cash no later than the second business day prior to the vote on the business combination proposal by delivering their stock to Churchill’s transfer agent prior to the vote at the meeting and (ii) affirmatively vote for or against the business combination proposal. If the business combination is not completed, these shares will not be redeemed. If a holder of public shares properly demands redemption and votes for or against the business combination proposal, Churchill will redeem each public share for a full pro rata portion of the trust account, calculated as of two business days prior to the consummation of the business combination. As of            , 2019, the record date, this would amount to approximately $            per share. If a holder of public shares exercises its redemption
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rights, then it will be exchanging its shares of Churchill common stock for cash and will no longer own the shares. See the section entitled “ Special Meeting of Churchill Stockholders — Redemption Rights ” for a detailed description of the procedures to be followed if you wish to redeem your shares for cash.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or was a “group,” will not be redeemed for cash.
The business combination will not be consummated if Churchill has net tangible assets of less than $5,000,001 after taking into account holders of public shares that have properly demanded redemption of their shares for cash. Further, the Merger Agreement provides that the Company is not required to consummate the Transactions if immediately prior to the consummation of the Transactions, Churchill does not have at least $550,000,000 of Available Cash. If the Company does not waive its termination right and Churchill has less than the required amount in trust, the Transactions will not be consummated.
Holders of Churchill warrants will not have redemption rights with respect to such securities.
Appraisal Rights
Churchill stockholders (including the initial stockholders), Churchill unitholders and Churchill warrant holders do not have appraisal rights in connection with the Transactions under the DGCL.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. Churchill has engaged MacKenzie Partners, Inc. to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “ Special Meeting of Churchill Stockholders — Revoking Your Proxy .”
Interests of Churchill’s Directors and Officers in the Business Combination
In considering the recommendation of the board of directors of Churchill to vote in favor of approval of the business combination proposal, the charter amendments proposal and the adjournment proposal, stockholders should keep in mind that the sponsor and the founders, including Churchill’s directors and executive officers, have interests in such proposals that are different from, or in addition to, those of Churchill stockholders generally. In particular:

If the business combination with the Company or another business combination is not consummated by September 11, 2020, Churchill will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 17,250,000 founder shares held by the sponsor which were acquired for an aggregate purchase price of  $25,000 prior to Churchill’s initial public offering, would be worthless because the sponsor is not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of  $            based upon the closing price of  $            per share on the NYSE on            , 2019 the record date.

The sponsor, and through the sponsor, the founders and Garden State purchased an aggregate of 18,300,000 private placement warrants from Churchill for an aggregate purchase price of $18,300,000 (or $1.00 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of the Churchill IPO. A portion of the proceeds Churchill received from these purchases were placed in the trust account. Such warrants had an aggregate market value of  $            based upon the closing price of  $            per warrant on the NYSE on            , 2019, the record date. The private placement warrants will become worthless if Churchill does not consummate a business combination by September 11, 2020.
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Jerre Stead will become Executive Chairman of Clarivate and Michael Klein, Sheryl von Blucher, Martin Broughton, Karen G. Mills and Balakrishnan S. Iyer will become directors of Clarivate after the closing of the Transactions. As such, in the future each will receive any cash fees, stock options or stock awards that the Clarivate board of directors determines to pay to its executive and non-executive directors.

If Churchill is unable to complete a business combination within the required time period, its executive officers will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Churchill for services rendered or contracted for or products sold to Churchill. If Churchill consummates a business combination, on the other hand, Churchill will be liable for all such claims.

The founders, including Churchill’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Churchill’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Churchill fails to consummate a business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Churchill may not be able to reimburse these expenses if the Transactions or another business combination are not completed by September 11, 2020. As of            , 2019, the record date, the founders and their affiliates had not incurred any unpaid reimbursable expenses.

The continued indemnification of current directors and officers and the continuation of directors’ and officers’ liability insurance.

Pursuant to the Sponsor Agreement, if the last sale price of Clarivate’s ordinary shares is at least $20.00 per share for at least 40 trading days over a 60 consecutive trading day period ending prior to the six-year anniversary of the consummation of the business combination, such persons designated by Jerre Stead and Michael Klein (or, in the event of death or incapacity of either, by his respective successor) will be issued an aggregate of 5,000,000 ordinary shares of Clarivate. Such 60 consecutive trading day period will not commence until the earlier of  (i) the date on which Onex or Baring sell any of their respective ordinary shares of Clarivate to a third party that is not an affiliate of Onex, Baring, any founder, the sponsor or Garden State or (ii) the first anniversary of the consummation of the Transactions. If the business combination is not consummated then this performance incentive will not be available.

In connection with the business combination, Churchill has engaged The Klein Group, LLC, an affiliate of M. Klein and Company, LLC and of the sponsor, to act as Churchill’s financial advisor in connection with the Mergers. Pursuant to this engagement, Churchill will pay The Klein Group, LLC an advisory fee of  $12.5 million, which shall be earned upon the closing of the Mergers. $7.5 million of such fee shall be payable upon the closing of the Mergers, $2.5 million of such fee shall be payable on January 31, 2020 and the final $2.5 million of such fee shall be payable on January 29, 2021. The payment of such fee is conditioned upon the completion of the Mergers. The engagement of The Klein Group, LLC and the payment of the advisory fee has been approved by Churchill’s audit committee and board of directors in accordance with Churchill’s related persons transaction policy.
At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Churchill or its securities, the sponsor, the founders, Garden State, the Company, the Company Owners and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Churchill’s common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the shares outstanding vote in favor of the business combination and that Churchill has in excess of the required amount of Available Cash to consummate the business combination
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under the Merger Agreement, where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/​prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with the Company’s consent, the transfer to such investors or holders of shares or warrants owned by the sponsor, the founders and/or Garden State for nominal value.
Entering into any such arrangements may have a depressive effect on Churchill’s common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.
If such transactions are effected, the consequence could be to cause the business combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the business combination proposal and other proposals to be presented at the special meeting and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it more likely that Churchill will have in excess of the required amount of Available Cash to consummate the business combination as described above.
As of the date of this proxy statement/prospectus, no agreements dealing with the above have been entered into by the sponsor, the founders, Garden State, the Company, the Company Owners, or any of their respective affiliates. Churchill will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
Recommendation to Stockholders
Churchill’s board of directors believes that the business combination proposal and the other proposals to be presented at the special meeting are fair to and in the best interest of Churchill’s stockholders and unanimously recommends that its stockholders vote “FOR” the business combination proposal, “FOR” each of the charter proposals and “FOR” the adjournment proposal, if presented.
Conditions to the Closing of the Business Combination
General Conditions
Consummation of the Transactions is conditioned on the approval of the business combination proposal and the charter proposals as described in this proxy statement/prospectus.
In addition, the consummation of the Transactions contemplated by the Merger Agreement is conditioned upon, among other things:

the early termination or expiration of the waiting period under the Hart-Scott-Rodino Act (which has already been obtained);

no order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority or statute, rule or regulation that is in effect and prohibits or enjoins the consummation of the Transactions;

the redemption offer for shares of Churchill common stock shall have been completed;

Churchill having at least $5,000,001 of net tangible assets remaining after the closing;

the memorandum of association and articles of association of Clarivate shall have been amended and restated in their entirety in the form attached to the Merger Agreement;
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this proxy statement/prospectus shall have become effective, no stop order shall have been issued that remains in effect and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC which remains pending;

the delivery by each party to the other party of a certificate with respect to the truth and accuracy of such party’s representations and warranties as of execution of the Merger Agreement and as of the closing as well as the performance by such party of covenants contained in the Merger Agreement required to by complied with by such party prior to the closing; and

the approval for listing by the NYSE of the shares to be issued in connection with the business combination.
Churchill’s Conditions to Closing
The obligations of Churchill to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of the Company, Clarivate, Jersey Merger Sub and Delaware Merger sub (subject to customary bring-down standards);

the covenants of the Company, Clarivate, Jersey Merger Sub and Delaware Merger Sub have been performed in all material respects;

the delivery by Clarivate of an executed Director Nomination Agreement; and

the delivery by Clarivate of an executed Registrations Rights Agreement.
The Company’s Conditions to Closing
The obligations of the Company, Clarivate, Delaware Merger Sub and Jersey Merger Sub to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of Churchill (subject to customary bring-down standards);

the covenants of Churchill have been performed in all material respects;

there is at least $550,000,000 of Available Cash; and

the covenants of the sponsor, the founders and Garden State under the Sponsor Agreement shall have been performed in all material respects, and no such person shall have threatened (i) that the Sponsor Agreement is not valid, binding and in full force and effect, (ii) that Clarivate or the Company is in breach of or default under the Sponsor Agreement or (iii) to terminate the Sponsor Agreement.
Tax Consequences of the Business Combination
For a description of certain United States federal income tax consequences of the Transactions and the exercise of redemption rights, please see the information set forth in “ The Business Combination Proposal — Material United States Federal Income Tax Consequences of the Business Combination to Churchill Security Holders .”
Anticipated Accounting Treatment
The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill will be treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of Clarivate issuing ordinary shares for the net assets of Churchill, accompanied by a recapitalization.
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Regulatory Matters
The Transactions are not subject to any additional federal or state regulatory requirement or approval, except for the filings with the State of Delaware and Jersey, Channel Islands necessary to effectuate the Transactions.
Risk Factors
In evaluating the proposals to be presented at the special meeting, a stockholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “ Risk Factors .”
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SUMMARY HISTORICAL FINANCIAL INFORMATION
Churchill is providing the following summary historical financial information to assist you in your analysis of the financial aspects of the Transactions.
Churchill’s balance sheet data as of December 31, 2018 and statement of operations data for the period from June 20, 2018 (inception) through December 31, 2018 are derived from Churchill’s audited financial statements, included elsewhere in this proxy statement/prospectus.
The Company’s consolidated balance sheet data as of December 31, 2018 and 2017 and consolidated statements of operations data for the fiscal years ended December 31, 2018 and 2017 are derived from the Company’s audited financial statements, included elsewhere in this proxy statement/prospectus.
The information is only a summary and should be read in conjunction with each of the Company’s and Churchill’s consolidated financial statements and related notes and “ Other Information Related to Churchill — Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of the Company or Churchill. All amounts are in US dollars. Certain amounts that appear in this section may not sum due to rounding.
Summary Historical Financial Information — Churchill
Period from
June 20, 2018
(inception)
through
December 31,
2018
Income Statement Data:
Revenues $ 0
Loss from operations
(2,525,364 )
Interest income
4,512,532
Net income
1,241,506
Basic and diluted net loss per share
(0.13 )
Weighted average shares outstanding excluding shares subject to possible redemption – basic and diluted
17,706,822
As of
December 31,
2018
Other Financial Data:
Total assets
$ 698,437,748
(1)
Net loss per share — basic and diluted — excludes income attributable to common stock subject to possible redemption of  $3,529,452 for the period presented.
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Summary Historical Financial Information — Company
Income Statement Data:
Year Ended December 31
($ in millions, except per share data)
2018
2017
Revenues, net
$ 968.5 $ 917.6
Loss from operations
(105.7 ) (147.0 )
Net loss
(242.2 ) (263.9 )
Basic and diluted net loss per share
(147.14 ) (160.83 )
Other Financial Data:
As of or for the Year Ended
December 31
($ in millions)
2018
2017
Adjusted revenues (1)
$ 951.2 $ 935.4
Standalone Adjusted EBITDA (2)
310.9 304.8
Standalone Adjusted EBITDA margin (3)
32.7 % 32.6 %
Capital expenditures
45.4 37.8
Total assets
3,709.7 4,005.1
(1)
Adjusted revenues normalizes for the impact of purchase accounting adjustments to deferred revenues and the impact of divestments. The following table reconciles net revenues to adjusted net revenues for the periods presented:
Year Ended December 31
($ in millions)
2018
2017
Revenues, net
$ 968.5 $ 917.6
Deferred revenues purchase accounting adjustment (a)
3.2 49.7
Revenues attributable to Intellectual Property Management Product Line (b)
(20.5 ) (31.9 )
Adjusted revenues
$ 951.2 $ 935.4
(a)
Reflects deferred revenues fair value accounting adjustment arising from purchase price allocation in connection with the 2016 Transaction.
(b)
Reflects revenues from the Company’s Intellectual Property Management (“IPM”) Product Line, which was divested in October 2018.
(2)
Standalone Adjusted EBITDA represents net (loss) income before provision for income taxes, depreciation and amortization and interest income and expense adjusted to exclude acquisition or disposal-related transaction costs (such costs include net income from continuing operations before provision for income taxes, depreciation and amortization and interest income and expense from the IPM Product Line which was divested in October 2018), losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses), Transition Services Agreement costs, separation and integration costs, transformational and restructuring expenses, acquisition-related adjustments to deferred revenues, non-cash income/(loss) on equity and cost method investments, non-operating income or expense, the impact of certain non-cash and other items that are included in net income for the period that the Company does not consider indicative of its ongoing operating performance, certain unusual items impacting results in a particular period to more accurately reflect management’s view of the recurring profitability of the business, the difference between annualized run-rate savings and savings realized during that same fiscal year as well as the difference in the Company’s actual standalone costs incurred relative to the steady state standalone cost estimate that the Company expects to achieve after completion of the Transition and optimization of the standalone
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functions by 2021. The adjustments reflected in the Company’s Standalone Adjusted EBITDA have not been prepared with a view towards complying with Article 11 of Regulation S-X. These standalone measures are intended to provide additional information on a more comparable basis than would be provided without such standalone adjustments.
In future periods, the Company will need to make additional capital expenditures in order to replicate capital expenditures associated with previously shared services on a stand-alone basis. You are encouraged to evaluate these adjustments and the reasons the Company considers them appropriate for supplemental analysis. These measures are not measurements of the Company’s financial performance under GAAP and should not be considered in isolation or as alternatives to net income, net cash flows provided by operating activities, total net cash flows or any other performance measures derived in accordance with GAAP or as alternatives to net cash flows from operating activities or total net cash flows as measures of the Company’s liquidity.
Reduction of ongoing standalone and Transition Services Agreement costs have been, and are expected to continue to be, a component of the Company’s strategy as it finalizes the Transition.
Certain of the adjustments included to arrive at Standalone Adjusted EBITDA are based on a historical and projected basis of expected costs related to the Company’s transition to an independent company. In evaluating Standalone Adjusted EBITDA you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the included adjustments. The Company’s presentation of Standalone Adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by any of the adjusted items, or that the Company’s projections and estimates will be realized in their entirety or at all. See “ Risk Factors —  Risks Related to Our Business and Operations Following the Business Combination — We may not achieve all of the expected benefits from the items reflected in the adjustments included in Standalone Adjusted EBITDA .”
The Company also monitors Standalone Adjusted EBITDA because the Company’s Credit Agreement and its indenture governing its senior unsecured notes contain certain covenants (including debt incurrence and the making of restricted payments) based on a leverage ratio, which utilizes Standalone Adjusted EBITDA. Standalone Adjusted EBITDA performance, along with the quantitative and qualitative information, may also be utilized by management and the Company’s compensation committee, as an input for determining incentive payments to employees.
The use of Standalone Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Standalone Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows as reported under GAAP. For example, Standalone Adjusted EBITDA does not reflect:

the Company’s cash expenditures or future requirements for capital expenditures;

changes in, or cash requirements for, the Company’s working capital needs;

interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt;

any cash income taxes that the Company may be required to pay;

any cash requirements for replacements of assets that are depreciated or amortized over their estimated useful lives and may have to be replaced in the future; or

all non-cash income or expense items that are reflected in the Company’s statements of cash flows.
The Company’s definition of and method of calculating Standalone Adjusted EBITDA may vary from the definitions and methods used by other companies when calculating adjusted EBITDA, which may limit their usefulness as comparative measures.
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The Company prepared the information included in this presentation based upon available information and assumptions and estimates that it believes are reasonable. The Company cannot assure you that its estimates and assumptions will prove to be accurate.
Because the Company incurred transaction, transition, integration, transformation, restructuring, and Transition Services Agreement costs in connection with the 2016 Transaction and the transition, borrowed money in order to finance its operations, and used capital and intangible assets in its business, and because the payment of income taxes is necessary if the Company generates taxable income after the utilization of its net operating loss carryforwards, any measure that excludes these items has material limitations. As a result of these limitations, these measures should not be considered as a measure of discretionary cash available to the Company to invest in the growth of its business or as a measure of its liquidity.
The following table reconciles net (loss) income to Standalone Adjusted EBITDA for the periods presented:
For the Years Ended
December 31
($ in millions)
2018
2017
Net loss
$ (242.2 ) $ (263.9 )
(Benefit) provision for income taxes
5.7 (21.3 )
Depreciation and amortization
237.2 228.5
Interest expense, net
130.8 138.2
Transition Service Agreement costs ( a )
55.8 89.9
Transition, transformation and integration expense ( b )
69.2 86.8
Excess standalone costs (c)
25.4 (24.6 )
Deferred revenues adjustment ( d )
3.2 49.7
Transaction related costs ( e )
2.5 2.2
Share-based compensation expense
13.7 17.7
Gain on sale of IPM Product Line
(36.1 )
Tax indemnity asset ( f )
33.8
IPM adjusted operating margin ( g )
(5.9 ) (6.8 )
Cost savings ( h )
12.7 9.7
Other ( i )
5.1 (1.3 )
Standalone Adjusted EBITDA
$ 310.9 $ 304.8
(a)
Includes accruals for payments to Thomson Reuters under the Transition Services Agreement. These costs are expected to decrease substantially in 2019, as we are in the final stages of implementing our standalone company infrastructure.
(b)
Includes costs incurred in connection with and after the 2016 Transaction relating to the implementation of our standalone company infrastructure and related cost-savings initiatives. These costs primarily include transition consulting, technology infrastructure, personnel and severance expenses relating to our standalone company infrastructure, which are recorded in Transition, transformation and integration expenses, and other line-items of our income statement, as well as expenses related to the Transition following the 2016 Transaction, mainly related to the integration of separate business units into one functional organization and enhancements in our technology.
(c)
Reflects the difference between our actual standalone company infrastructure costs (including the additional costs associated with the migration of our technology systems to Amazon Web Services or our own systems), and our estimated steady state standalone operating costs, which were as follows:
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Years Ended December 31,
($ in millions)
2018
2017
Actual standalone company infrastructure costs
$ 153.6 $ 97.1
Steady state standalone cost estimate
(128.2 ) (121.7 )
Excess standalone costs
$ 25.4 $ (24.6 )
( d)
Reflects deferred revenues fair value accounting adjustment arising from purchase price allocation in connection with the 2016 Transaction. See “ Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting the Comparability of Our Results of Operations — 2016 Transaction and Transition to Operations as a Standalone Business —  Purchase Accounting Impact of the 2016 Transaction .”
(e)
Includes consulting and accounting costs associated with (i) various acquisitions and (ii) the sale of the IPM Product Line.
(f)
Reflects the write down of a tax indemnity asset.
(g)
Reflects the IPM Product Line’s operating margin, excluding amortization and depreciation, prior to its divestiture in October 2018.
(h)
Reflects the estimated annualized run-rate cost savings, net of actual cost savings realized, related to restructuring and other cost savings initiatives undertaken during the period (exclusive of any cost reductions in our estimated standalone operating costs).
(i)
Includes primarily the net impact of foreign exchange gains and losses related to the re-measurement of balances and other one-time adjustments.
(3)
Standalone Adjusted EBITDA Margin is defined as Standalone Adjusted EBITDA divided by Adjusted revenues.
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SUMMARY UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following summary unaudited pro forma condensed combined financial data (the “selected pro forma data”) gives effect to the business combination and the other transactions contemplated by the Transactions and described in the section entitled “ Unaudited Pro Forma Condensed Combined Financial Statements .” Operations prior to the Transactions will be those of the Company. The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill will be treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of Clarivate issuing ordinary shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be stated at historical cost, with no goodwill or other intangible assets recorded. The summary unaudited pro forma condensed combined balance sheet data as of December 31, 2018 gives effect to the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, as if they had occurred on December 31, 2018. The summary unaudited pro forma condensed combined statement of operations data for the year ended December 31, 2018 gives effect to the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, as if they had occurred on January 1, 2018.
The selected pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the combined company appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the pro forma financial statements. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the audited consolidated financial statements and related notes of Churchill and the Company for the applicable periods included elsewhere in this proxy statement/prospectus. The selected pro forma data has been presented for informational purposes only and are not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the Transactions been completed as of the dates indicated. In addition, the selected pro forma data does not purport to project the future financial position or operating results of the combined company.
The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of cash redemptions of Churchill’s common stock:

Assuming No Redemptions:   This presentation assumes that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account. Under the no redemptions scenario, $649.5 million will be used to pay down the Term Loan Facility (with principal payments payable in $0.5 million increments).

Assuming Maximum Redemptions:   This presentation assumes that Churchill public stockholders holding 11,553,523 of Churchill’s public shares exercise their redemption rights and that such shares are redeemed for their pro rata share ($10.07 per share) of the funds in its trust account for aggregate redemption proceeds of  $116.3 million. See “ Unaudited Pro Forma Condensed Combined Financial Statements ” for further information on this calculation. Under the Merger Agreement, the consummation of the Transactions is conditioned upon, among other things, the amount of Available Cash not being less than $550.0 million. This scenario gives effect to the maximum number of redemptions that meet all of the conditions to permit consummation of the Transactions. Under the maximum redemptions scenario, the amount available for the paydown of the Term Loan Facility is reduced by the cash used for redemptions, resulting in a $533.0 million pay down of the Term Loan Facility (with principal payments payable in $0.5 million increments).
(in thousands, except share and per share information)
Assuming No
Redemptions
Assuming
Maximum
Redemptions
Summary Unaudited Pro Forma Condensed Combined Statement of Operations
Data Year Ended December 31, 2018
Revenues, net
$ 968,468 $ 968,468
Operating expenses
1,073,812 1,073,812
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(in thousands, except share and per share information)
Assuming No
Redemptions
Assuming
Maximum
Redemptions
Operating loss
(105,344 ) (105,344 )
Net loss
(204,626 ) (211,325 )
Basic and diluted net loss per common share
$ (0.67 ) $ (0.72 )
Weighted average shares outstanding, basic and diluted
305,250,000 293,696,477
Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data
As of December 31, 2018
Total current assets
$ 410,168 $ 410,367
Total assets
3,711,230 3,711,429
Total current liabilities
643,394 643,394
Total liabilities
[•] [•]
Total shareholders’ equity
[•] [•]
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COMPARATIVE PER SHARE DATA
The following table sets forth selected historical comparative share information for Churchill and the Company, respectively, and unaudited pro forma condensed combined per share information of Churchill after giving effect to the Transactions, assuming two redemption scenarios as follows:

Assuming No Redemptions:   This presentation assumes that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account. Under the no redemptions scenario, $649.5 million will be used to pay down the Term Loan Facility (with principal payments payable in $0.5 million increments).

Assuming Maximum Redemptions:   This presentation assumes that Churchill public stockholders holding 11,553,523 of Churchill’s public shares exercise their redemption rights and that such shares are redeemed for their pro rata share ($10.07 per share) of the funds in its trust account for aggregate redemption proceeds of  $116.3 million. Under the Merger Agreement, the consummation of the Transactions is conditioned upon, among other things, the amount of Available Cash not being less than $550.0 million. This scenario gives effect to the maximum number of redemptions that meet all of the conditions to permit consummation of the Transactions. Under the maximum redemptions scenario, the amount available for the paydown of the Term Loan Facility is reduced by the cash used for redemptions, resulting in a $533.0 million pay down of the Term Loan Facility (with principal payments payable in $0.5 million increments).
The pro forma book value information reflects the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, as if they had occurred on December 31, 2018. The weighted average shares outstanding and net earnings per share information reflect the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, as if they had occurred on January 1, 2018.
This information is only a summary and should be read together with the selected historical financial information summary included elsewhere in this proxy statement/prospectus, and the audited financial statements of Churchill and the Company and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited Churchill and Company pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.
The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of Churchill and the Company would have been had the companies been combined during the period presented.
Historical
Pro Forma Combined
Company
Churchill (1)
Assuming
No
Redemptions
Assuming
Maximum
Redemptions
As of and for the Year Ended December 31, 2018
Book value per share – basic and diluted (2)
$ 638.35 $ 0.28 $ [•] $ [•]
Weighted average shares outstanding – basic and diluted
1,645,818 17,706,822 305,250,000 293,696,477
Net loss per share – basic and diluted
$ (147.14 ) $ (0.13 ) $ (0.67 ) $ (0.72 )
(1)
Churchill information presented as of December 31, 2018 and from June 20, 2018 (inception) to December 31, 2018
(2)
Book value per share is equal to total shareholders’ equity/total basic and diluted outstanding shares
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RISK FACTORS
Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. In this section “we,” “us” and “our” refer to the Company prior to the business combination and to Clarivate following the business combination.
Risks Related to Our Business and Operations Following the Business Combination
We operate in highly competitive markets and may be adversely affected by this competition.
The markets for our products and services are highly competitive and are subject to rapid technological changes and evolving customer demands and needs. We compete on the basis of various factors, including the quality of content embedded in our databases and those of our competitors, customers’ perception of our products relative to the value that they deliver, user interface of the products and the quality of our overall offerings.
Many of our principal competitors are established companies that have substantial financial resources, recognized brands, technological expertise and market experience, and these competitors sometimes have more established positions in certain product lines and geographies than we do. We also compete with smaller and sometimes newer companies, some of which are specialized with a narrower focus than our company, and face competition from other Internet services companies and search providers.
Our competitors may be able to adopt new or emerging technologies or address customer requirements more quickly than we can. New and emerging technologies can also have the impact of allowing start-up companies to enter the market more quickly than they would have been able to in the past. We may also face increased competition from companies that could pose a threat to our business by providing more in-depth offerings, adapting their products and services to meet the demands of their customers or combining with one of their competitors to enhance their products and services. A number of our principal competitors may continue to make acquisitions as a means to improve the competitiveness of their offerings. In order to better serve the needs of our existing customers and to attract new customers, we must continue to:

enhance and improve our existing products and services (such as by adding new content and functionalities);

develop new products and services;

invest in technology; and

strategically acquire additional businesses and partner with other businesses in key sectors that will allow us to offer a broader array of products and services.
Our ability to compete successfully is also impacted by the growing availability of information from government information systems and other free sources, as well as competitors who aggressively market their products as a lower cost alternative. See “ — Increased accessibility to free or relatively inexpensive information sources may reduce demand for our products and services .” Because some of our competitors are able to offer products and services that may be more cost effective than ours, including through the provision of price incentives for new customers, and because some of our competitors’ products and services may be seen as having greater functionality or performance than ours, the relative value of some of our products or services could be diminished. In addition, some of our competitors combine competing products with complementary products as packaged solutions, which could pre-empt use of our products or solutions. Competition from such free or lower cost sources may require us to reduce the price of some of our products and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins). If we are unable or unwilling to reduce prices or make additional investments in the future, we may lose customers and our financial results may be adversely affected. In addition, implementation of annual price increases by us from time to time may also, in some cases, cause customers to use lower-cost competitors.
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Certain of our distribution partners have licensing rights to portions of our content for use within their platforms. Over time they may become more directly competitive to us (subject to the terms of their agreements with us) if they were to advance their technology more efficiently and effectively than we do. Additionally, some of our customers may decide to develop independently certain products and services that they obtain from us, including through the formation of consortia. Educating our customers on the intricacies and uses of our products and services could, in certain cases, improve their ability to offer competing products and services as they look to expand their business models. If more of our customers become self-sufficient, demand for our products and services may be reduced. If we fail to compete effectively, our financial condition and results of operations would be adversely affected.
If our products and services do not maintain and/or achieve broad market acceptance, or if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards and changing regulatory requirements, our revenues could be adversely affected.
Our business is dependent on the continued acceptance by our customers of our existing products and services and the value placed on them. If these products and services do not maintain market acceptance, our revenues may decrease.
We are also continually investing in new product development to expand our offerings beyond our traditional products and services. However, new products or services may not achieve market acceptance if current or potential customers do not value their benefits, do not achieve favorable results using such new products or services, use their budgets for different products or services or experience technical difficulties in using such new products or services. Moreover, market acceptance of any new products or services, or changes to our existing products and services, may be affected by customer confusion surrounding the introduction of such products and services by us and comparison of the benefits of our products and services to those of other solutions. Our expansion into new offerings may present increased risks, and efforts to expand beyond our traditional products and services may not succeed. If we are unable to successfully develop new products or services or enhance existing products or services or migrate them to new systems, or if we are unsuccessful in obtaining any required regulatory approval or market acceptance for new products or services, our products and services may be rendered obsolete by competitive offerings, we may experience cost overruns, delays in delivery or performance problems, demand for our products and services may decline and/or we may not be able to grow our business or growth may occur more slowly than we anticipate.
In addition, our business is characterized by rapidly changing technology, evolving industry standards and changing regulatory requirements. Our growth and success depend upon our ability to keep pace with such changes and developments and to meet changing customer needs and preferences. In order to enable our sales personnel to sell new products and services effectively, we must invest resources and incur additional costs in training programs on new products and services and key differentiators and business values.
The process of developing our products and services is complex and may become increasingly complex and expensive in the future due to the introduction of new platforms, operating systems and technologies. Our ability to keep pace with technology and business and regulatory changes is subject to a number of risks, including that we may find it difficult or costly to:

update our products and services and develop new products and services quickly enough to meet our customers’ needs;

make some features of our products work effectively and securely over the Internet or with new or changed operating systems;

update our products and services to keep pace with business, evolving industry standards, regulatory requirements and other developments in the markets in which our customers operate; and

integrate or further develop acquired products or technologies successfully or at all.
Historically, our customers accessed our web-based products and services primarily through desktop computers and laptops. Over the last few years, Internet use through smartphones, tablets and other mobile devices has increased significantly. As a result of this shift, we have focused on developing, supporting and
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maintaining various products and services on different platforms and devices (some of which complement traditional forms of delivery). If our competitors are able to release alternative device products, services or applications more quickly than we are able to, or if our customers do not adopt our offerings in this area, our revenues and retention rates could be adversely affected.
Additionally, the information services industry is undergoing rapid technological evolution. Our competitors are adopting big data analytics and artificial intelligence to collect, categorize and curate data. While we use big data analytics and artificial intelligence, we still use human curators extensively, which may mean the cost to provide our products and services to customers may be more expensive than our competitors. Furthermore, new technologies could render our technologies, products and services obsolete or unattractive, reducing growth opportunities for our business and resulting in a material and adverse effect on our business, results of operations and financial condition.
If we experience design defects, errors, failures or delays associated with our products or services or migration of an existing product or service to a new system, our business could suffer serious harm.
Despite testing, our products and services may contain errors or defects after release. In addition, if we release new products or services, migrate existing products or services to new systems or upgrade outdated software or infrastructure, our products and services may contain design defects and errors when first introduced or when major new updates or enhancements are released. We have also experienced delays in the past while developing and introducing new products and services, primarily due to difficulties in licensing data inputs, developing new products or services or adapting to particular operating environments. Additionally, in our development of new products and services or updates and enhancements to our existing products and services, we may make a design error that causes the product or service to operate incorrectly or less effectively. Many of our products and services also rely on data and services provided by third-party providers over which we have no control and may be provided to us with defects, errors or failures. Our customers may also use our products and services together with their own software, data or products from other companies. As a result, when problems occur, it might be difficult to identify the source of the problem. If design defects, errors or failures are discovered in our current or future products or services, we may not be able to correct them in a timely manner, if at all.
The existence of design defects, errors or delays in our products or services that are significant, or are perceived to be significant, could result in rejection or delay in market acceptance of our products or services, damage to our reputation, loss of revenues, a lower rate of subscription renewals or upgrades, diversion of development resources, product liability claims or regulatory actions or increases in service and support costs. We may also need to expend significant capital resources to eliminate or work around design defects, errors, failures or delays. In each of these ways, our business, financial condition or results of operations could be materially adversely impacted.
We may be adversely affected by uncertainty, downturns and changes in the markets that we serve.
Our performance depends on the financial health and strength of our customers, which in turn is dependent on the economic conditions of the markets in which we and our customers operate. Declines in the U.S. and global economies or continued economic uncertainty may lead customers to delay or reduce purchases of our products and services as they take measures to reduce their operating costs, including by delaying the development or launch of new products and brands and/or reducing research and development (“R&D”) spending generally.
In addition, mergers or consolidations among our customers could reduce the number of our customers and potential customers. Continued consolidation could adversely affect our revenues even if these events do not reduce the activities of the consolidated entities. For example, when entities consolidate, overlapping services previously purchased separately are usually purchased only once by the combined entity, leading to loss of revenues. Other services that were previously purchased by one of the merged or consolidated entities may be deemed unnecessary or cancelled. Any such developments among our customers could materially and adversely affect our business, financial condition, operating results and cash flow.
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We may not achieve all of the expected benefits from the items reflected in the adjustments included in Standalone Adjusted EBITDA.
We have made adjustments to net (loss) income to calculate Standalone Adjusted EBITDA. These adjustments reflect certain items related to our business strategy as well as the Transition. For example, in calculating Standalone Adjusted EBITDA, we have added back, among other things, the annualization effect of cost savings implementation during the year and excess standalone costs, certain restructuring and integration costs, acquisition-related costs and other unusual and/or non-recurring items. We cannot provide assurance that our estimates and assumptions in calculating Standalone Adjusted EBITDA will prove to be accurate. For example, we believe that the standalone costs that we have incurred to date and expect to incur through 2020 are not reflective of the standalone costs that we expect that we will incur starting in 2021 and onwards (“steady state standalone costs”). As a result, we have made an adjustment when calculating Standalone Adjusted EBITDA to reflect the excess of current standalone costs to steady state standalone costs. There is no assurance that anticipated cost savings reflected in Standalone Adjusted EBITDA will be achieved or that steady state standalone costs will be achieved. If the actual annualized effect of cost savings we have implemented is less than our estimates, our cost savings initiatives adversely affect our operations or cost more or take longer to implement than we project, our steady state standalone costs are higher than our estimates, and/or if our assumptions prove to be inaccurate, our Standalone Adjusted EBITDA will be lower than we anticipate.
Our ability to realize the expected benefit of cost savings associated with the adjustments and steady state standalone costs included or permitted by the Indenture and the Credit Agreement to be included when calculating Standalone Adjusted EBITDA depends on factors beyond our control, such as operating difficulties, increased operating costs, competitors and customers, delays in implementing initiatives, our ability to integrate businesses that we acquire and general economic or market conditions. We cannot assure you that we will be successful in generating growth, maintaining or increasing our cash flows or profitability or achieving cost savings and steady state standalone costs in connection with the items reflected in these adjustments. We cannot assure you that Standalone Adjusted EBITDA will reflect the actual benefit of the related adjustments.
The use of Standalone Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Standalone Adjusted EBITDA in isolation, or as a substitute for analysis of our results of operations and operating cash flows as reported under GAAP. For example, Standalone Adjusted EBITDA does not reflect:

our cash expenditures or future requirements for capital expenditures;

changes in, or cash requirements for, our working capital needs;

interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

any cash income taxes that we may be required to pay;

any cash requirements for replacements of assets that are depreciated or amortized over their estimated useful lives and may have to be replaced in the future; and

all non-cash income or expense items that are reflected in our statements of cash flows.
Our definition of and method of calculating Standalone Adjusted EBITDA may vary from the definitions and methods used by other companies in calculating adjusted EBITDA, which may limit their usefulness as comparative measures.
We may be unable to achieve some or all of the operational cost improvements and other benefits that we expect to realize.
We may not be able to realize all of the cost savings we expect to achieve. In connection with our evaluation of the Transition, we have estimated the costs we will need to incur in order to operate as an independent company after the Transition Services Agreement expires. In addition, we have estimated that we will be able to achieve additional annual cost savings as a result of other initiatives, particularly by pursuing a number of operational cost improvements identified during diligence, increased overall focus on
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cost control as a standalone company and certain other restructuring initiatives we plan to undertake. We cannot assure you that we will be able to successfully realize the expected benefits of these initiatives. A variety of risks could cause us not to realize some or all of the expected benefits. These risks include, among others, higher than expected standalone overhead expenses, delays in the anticipated timing of activities related to such initiatives, increased difficulty and cost in establishing ourselves as an independent company, lack of sustainability in cost savings over time, unexpected costs associated with operating our business, inability to eliminate duplicative back office overhead or redundant selling and general and administrative functions and inability to avoid labor disruptions in connection with any integration of the foregoing, particularly in connection with any headcount reductions. Our ability to successfully manage organizational changes is important for our future business success. In particular, our reputation and results of operations could be harmed if employee morale, engagement or productivity decline as a result of organizational or other changes.
Moreover, our implementation of these initiatives may disrupt our operations and performance, and our estimated cost savings from these initiatives are based on several assumptions that may prove to be inaccurate and, as a result, we cannot assure you that we will realize these cost savings. If, for any reason, the benefits we realize are less than our estimates, or our improvement initiatives adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially adversely affected.
We are dependent on third parties, including public sources, for data, information and other services, and our relationships with such third parties may not be successful or may change, which could adversely affect our results of operations.
Substantially all of our products and services are developed using data, information or services obtained from third-party providers and public sources, or are made available to our customers or are integrated for our customers’ use through information and technology solutions provided by third-party service providers.
We have commercial relationships with third-party providers whose capabilities complement our own and, in some cases, these providers are also our competitors. The priorities and objectives of these providers, particularly those that are our competitors, may differ from ours, which may make us vulnerable to unpredictable price increases and unfavorable licensing terms. Agreements with such third-party providers periodically come up for renewal or renegotiation, and there is a risk that such negotiations may result in different rights and restrictions which could impact upon our customers use of the content. Moreover, providers that are not currently our competitors may become competitors or be acquired by or merge with a competitor in the future, any of which could reduce our access to the information and technology solutions provided by those companies. If we were to expand our product and service offerings, whether through organic growth or acquisitions, we may launch products and services that compete with providers that are not currently our competitors, which could negatively impact our existing relationships. If we do not maintain, or obtain the expected benefits from, our relationships with third-party providers or if a substantial number of our third-party providers or any key service providers were to withdraw their services, we may be less competitive, our ability to offer products and services to our customers may be negatively affected, and our results of operations could be adversely impacted.
We also depend on public sources in the development of our products and services. These public sources are usually free to access or are available at minimal cost, and do not compete directly with our products and services. If such public sources were to begin competing with us directly, or were to increase the cost to access their data, prohibit us from collecting and synthesizing the data they provide or cease existing altogether, our results of operations could be adversely impacted.
Increased accessibility to free or relatively inexpensive information sources may reduce demand for our products and services.
In recent years, more public sources of free or relatively inexpensive information have become available, particularly through the Internet, and this trend is expected to continue. For example:

some governmental and regulatory agencies have increased the amount of information they make publicly available at no cost;
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several companies and organizations have made certain information publicly available at little or no cost; and

“open source” software that is available for free may also provide some functionality similar to that in some of our products.
Public sources of free or relatively inexpensive information may reduce demand for our products and services. Demand could also be reduced as a result of cost-cutting, reduced spending or reduced activity by customers. Our results of operations would be adversely affected if our customers choose to use these public sources as a substitute for our products or services.
We generate a significant percentage of our revenues from recurring subscription-based arrangements, and if we are unable to maintain a high annual revenue renewal rate, our results of operations could be adversely affected.
In 2018, approximately 82% of our revenues were subscription-based. In order to maintain existing revenues and to generate higher revenues, we are dependent on a significant number of our customers renewing their arrangements with us. Although many of these arrangements have automatic renewal provisions, with appropriate notice these arrangements are cancellable and our customers have no obligation to renew their subscriptions after the expiration of their initial subscription period. As a result, our past annual revenue renewal rates may not be indicative of our future annual revenue renewal rates, and our annual revenue renewal rates may decline or fluctuate in the future as a result of a number of factors, including customer satisfaction with our products and services, our prices and the prices offered by competitors, reductions in customer spending levels and general economic conditions. Our revenues could also decline if a significant number of our customers renewed their arrangements with us, but reduced the amount of their spending.
In addition, because most of the revenues we report in each quarter are the result of subscription agreements entered into or renewed in previous quarters, a decline in subscriptions in any one quarter may not affect our results in that quarter, but could reduce revenues in future quarters. We may not be able to adjust our cost structure in response to sustained or significant downturns in revenues. Moreover, renewal dates for our subscription agreements are typically concentrated in the first quarter. Adverse events impacting us or our customers occurring in the first quarter may result in us failing to secure subscription agreement renewals, which would have a disproportionately adverse effect on our financial condition and results of operations in future periods.
Failure to protect the reputation of our brands could impact our ability to remain a trusted source of high-quality content, analytics services and workflow solutions.
The reputation of our brands is key to our ability to remain a trusted source of high-quality content, analytics services and workflow solutions and to attract and retain customers. Negative publicity regarding our company or actual, alleged or perceived issues regarding one of our products or services could harm our relationship with customers. Failure to protect the reputation of our brands may adversely impact our credibility as a trusted source of content and may have a negative impact on our business. In addition, in certain jurisdictions we engage sales agents in connection with the sale of certain of our products and services. It is difficult to monitor whether such agents’ representation of our products and services is accurate. Poor representation of our products and services by agents, or entities acting without our permission, could have an adverse effect on our reputation and our business.
Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of our products or services, unauthorized disclosure of data, which could adversely impact our business.
Our reputation and ability to attract, retain and serve our customers is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from natural disasters, terrorist attacks, power loss, telecommunications failures, and cybersecurity risks.
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Our computer systems and those of third parties we use in our operations are vulnerable to cybersecurity risks, including cyber-attacks, both from state-sponsored entities and individual activity, such as computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions. We have implemented certain systems and processes to thwart hackers and protect our data and systems, however, these systems and processes may not be effective and may have the unintentional effect of reducing the functionality of our operations. Any significant disruption to our operations or access to our systems could result in a loss of customers and adversely affect our business and results of operation.
Our ability to effectively use the Internet may also be impaired due to system or infrastructure failures, service outages at third-party Internet providers or increased government regulation, and such impairment may result in shortage of capacity and increased costs associated with such usage. These events may affect our ability to store, process and transmit data and services to our customers.
We utilize our own communications and computer hardware systems located either in our facilities or in that of a third-party web hosting provider. In addition, we utilize third-party “cloud” computing services in connection with our business operations. Problems faced by us or our third-party web hosting, “cloud” computing, or other network providers, including technological or business-related disruptions, as well as cybersecurity threats, could adversely impact our customers.
We rely upon a third party cloud computing service to support our operations, and any disruption of or interference with our use of such service or material change to our arrangement with this provider could adversely affect our business.
We currently host the vast majority of our computing on a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service, and have nearly completed the migration of our product and services platform from Thomson Reuters to a third party cloud computing service. As we complete the migration to such third party cloud computing service, we are continuing to maintain duplicative technology systems in order to continue to receive services under the Transition Services Agreement, which is scheduled to expire in September 2019.
We do not have control over the operations of the facilities of the third party cloud computing service that we use. These facilities are vulnerable to damage or interruption from natural disasters, cyber security attacks, terrorist attacks, power losses, telecommunications failures, or other unanticipated problems which could result in lengthy interruptions to our operations. In the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These facilities could also be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism, and other misconduct. Our uninterrupted use of this third party cloud computing service is critical to our success. This, coupled with the fact that we cannot easily switch our cloud computing operations to another cloud provider, means that any disruption of or interference with our use of our current third party cloud computing service could disrupt our operations and our business would be adversely impacted.
Our third party cloud computing service provider provides us with their standard computing and storage capacity, service level agreements, and related support in exchange for timely payment by us under the terms of our agreement, which continues until terminated by either party. Such provider may terminate the agreement without cause by providing 90 days’ prior written notice, and may terminate the agreement with 30 days’ prior written notice for cause, including any material default or breach of the agreement by us that we do not cure within the 30-day period. If any of our arrangements with our third party cloud computing service provider are terminated, we could experience interruptions in our products and services, as well as delays and additional expenses in arranging new facilities and services.
Our third party cloud computing service provider does not have an obligation to renew its agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements on commercially reasonable terms, our agreements are prematurely terminated, or we add additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition of, new data center providers. If these providers increase the cost of their services, we may have to increase fees to our customers, and our operating results may be adversely impacted.
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We have implemented a new enterprise resource planning system, and challenges with the system may impact our business and operations.
We recently completed a complex, multi-year implementation of a new global enterprise resource planning system (“ERP”). The ERP, which required the implementation of over twenty integrated applications, is designed to accurately maintain our books and records and provide information to our management team important to the operation of the business. Our ERP will continue to require ongoing investment in the ordinary course. If the system as it currently stands or after necessary investments does not result in our ability to maintain accurate books and records, our financial condition, results of operations and cash flows could be negatively impacted. Additionally, conversion from our old Thomson Reuters system to the ERP may cause inefficiencies and excess costs until the ERP is stabilized and mature.
The implementation of our ERP mandated new procedures and many new key controls over financial reporting. These procedures and controls are not yet mature in their operation and not fully tested by either our internal or external auditors. If we are unable to adequately implement and maintain procedures and controls relating to our ERP, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. See “ — If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
We may be unable to derive fully the anticipated benefits from organic growth, existing or future acquisitions, joint ventures, investments or dispositions.
We seek to achieve our growth objectives by (i) optimizing our offerings to meet the needs of our customers through organic development, including by delivering integrated workflow platforms, cross-selling our products across our existing customer base, acquiring new customers and implementing operational efficiency initiatives, (ii) through acquisitions, joint ventures, investments and dispositions and (iii) through implementing our transformational strategy in connection with the Transactions. If we are unable to successfully execute on our strategies to achieve our growth objectives or drive operational efficiencies, or if we experience higher than expected operating costs that cannot be adjusted accordingly, our growth rates and profitability could be adversely affected.
Acquisitions have not historically been a significant part of our growth strategy; however, going forward, we expect to evaluate and, where appropriate, opportunistically undertake acquisitions. To the extent we seek to grow our business through acquisitions, we may not be able to successfully identify attractive acquisition opportunities or make acquisitions on terms that are satisfactory to our company from a commercial perspective. In addition, competition for acquisitions in the markets in which we operate during recent years has increased, and may increase costs of acquisitions or cause us to refrain from making certain acquisitions. We may also be subject to increasing regulatory scrutiny from competition and antitrust authorities in connection with acquisitions. Achieving the expected returns and synergies from existing and future acquisitions will depend in part upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our product lines in an efficient and effective manner. We cannot assure you that we will be able to do so, or that our acquired businesses will perform at anticipated levels or that we will be able to obtain these synergies. Management resources may also be diverted from operating our existing businesses to certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses.
In addition, we may incur earn-out and contingent consideration payments in connection with future acquisitions, which could result in a higher than expected impact on our future earnings. We may also finance future transactions through debt financing, including significant draws on the Revolving Credit Facility or use of our incremental capacity under our Term Loan Facility, the issuance of our equity securities, the use of existing cash, cash equivalents or investments or a combination of the foregoing. Acquisitions financed with debt could require us to dedicate a substantial portion of our cash flows to principal and interest payments and could subject us to restrictive covenants. Future acquisitions financed
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with our own cash could deplete the cash and working capital available to fund our operations adequately. Difficulty borrowing funds, selling securities or generating sufficient cash from operations to finance our activities may have a material adverse effect on our results of operations.
We may also decide from time to time to dispose of assets or product lines that are no longer aligned with strategic objectives and we deem to be non-core. For example, in 2018, we completed the divestiture of our IP Management business. Once a decision to divest has been made, there can be no assurance that a transaction will occur, or if a transaction does occur, there can be no assurance as to the potential value created by the transaction. The process of exploring strategic alternatives or selling a business could negatively impact customer decision-making and cause uncertainty and negatively impact our ability to attract, retain and motivate key employees. In addition, we expend costs and management resources to complete divestitures. Any failures or delays in completing divestitures could have an adverse effect on our financial results and on our ability to execute our strategy.
We may face liability for content contained in our products and services.
We may be subject to claims for breach of contract, defamation, libel, copyright or trademark infringement, fraud or negligence, violation of laws or regulations or other theories of liability, in each case relating to the data, articles, commentary, information or other content we collect and distribute in the provision of our products and services. If such data or other content or information that we distribute has errors, is delayed or has design defects, we could be subject to liability or our reputation could suffer. We could also be subject to claims based upon the content that is accessible from our corporate website or those websites that we own and operate through links to other websites. Further, we could be subject to claims that we have misused data inputs provided by third-party suppliers. Any such claim, even if the outcome were to be ultimately favorable to us, could involve a significant commitment of our management, personnel, financial and other resources and could have a negative impact on our reputation. In addition, such claims and lawsuits, or any resulting reputational harm, could have a material adverse effect on our financial condition or results of operations.
Exchange rate fluctuations and volatility in global currency markets may have a significant impact on our results of operations.
As a company with global operations, we face exposure to adverse movements in foreign currency exchange rates. Exchange rate movements in our currency exposures may cause fluctuations in our financial statements. Due to our global presence, a portion of our revenues, operating expense and assets and liabilities are non-U.S. dollar denominated and therefore subject to foreign currency fluctuation. We face exposure to currency exchange rates as a result of the growth in our non-U.S. dollar denominated operating expense across Europe, Asia and Latin America. For example, an increase in the value of non-U.S. dollar currencies against the U.S. dollar could increase costs for delivery of products, services and also increase cost of local operating expenses and procurement of materials or services that we purchase in foreign currencies by increasing labor and other costs that are denominated in such local currencies. In addition, an increase in the value of the U.S. dollar could increase the real cost to our customers of our products in those markets outside the United States where we price our products and services in U.S. dollars. As a result of the foregoing, our results of operations may be materially adversely affected. These risks related to exchange rate fluctuations and currency volatility may increase in future periods as our operations outside of the United States continue to expand.
We may in the future hedge against currency exposure associated with anticipated foreign currency cash flows or assets and liabilities denominated in foreign currency. Such attempts to offset the impact of currency fluctuations are costly, and there can be no assurance that currency hedging activities would be successful. Losses associated with these hedging instruments may negatively affect our results of operations, and any such currency hedging activities themselves would be subject to risk, including risks related to counterparty performance.
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The international scope of our operations and our corporate and financing structure may expose us to potentially adverse tax consequences.
We are subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions as a result of the international scope of our operations and our corporate and financing structure. We are also subject to intercompany pricing laws, including those relating to the flow of funds between our companies pursuant to, for example, purchase agreements, licensing agreements or other arrangements. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation of these laws or regulations in any applicable jurisdiction, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, changes in the tax laws or tax treaties (or their interpretation, for example, see below in relation to the “MLI”) of the countries in which we operate may severely and adversely affect our ability to efficiently realize income or capital gains or mitigate withholding taxes and may subject us to tax and return filing obligations in such countries. Such changes may increase our tax burden and/or may cause us to incur additional costs and expenses in compliance with such changes. In addition, the tax authorities in any applicable jurisdiction may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions, including the tax treatment or characterization of our indebtedness. If any applicable tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could result in the disallowance of deductions, the imposition of withholding taxes, the reallocation of income or other consequences that could have a material adverse effect on our business, financial condition and results of operations.
In addition, the U.S. Congress, the U.K. Government, the Organization for Economic Co-operation and Development (the “OECD”), and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations. One example is in the area of  “base erosion and profit shifting” where payments are made between affiliates in different jurisdictions, sometimes for tax optimization reasons. The OECD’s base erosion and profit shifting (“BEPS”) initiative is aimed at addressing some of these issues which includes introducing provisions limiting the deductibility of interest for tax purposes by reference to the percentage of relevant EBITDA of the paying entity or the relevant group and disallowing deductibility arising out of so-called “hybrid mismatches.”
The BEPS initiative also proposes to transpose certain measures into existing tax treaties of participating states. Such measures include the inclusion in tax treaties of one, or both, of a “limitation-on-benefit” (“LOB”) rule and a “principle purposes test” (“PPT”) rule. The application of the LOB rule or the PPT rule could deny the availability of tax treaty benefits (such as a reduced rate of withholding tax) under tax treaties on which we currently rely. Such changes are to be implemented by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”) which currently has been signed by over 75 jurisdictions.
Also, within the European Union (the “EU”), the European Council Directive 2016/1164 (Anti-Tax Avoidance Directive (“ATAD”)) required EU member states to transpose certain measures into national legislation by December 31, 2018, including provisions similar to those outlined above. ATAD has been supplemented by European Council Directive 2017/952 (“ATAD II”). EU member states are required to transpose ATAD II into national legislation by December 31, 2019.
Another example of the extended focus on issues related to the taxation of multinational corporations are the proposals by the European Commission, the United Kingdom and other jurisdictions to introduce a digital services tax, which at the date hereof are generally still either under consultation or have not yet been formally implemented. The scope of any future changes in this area are likely to be wide-ranging and may result in companies (including the Company and its subsidiaries) being subject to tax in jurisdictions in which they may not otherwise have a taxable presence on revenues generated by reference to certain digital services, including the supply of advertising space, the supply of online marketplaces and the transmission of collected user data. The full impact of these initiatives, directives and tax rules remains unclear but the outcome may increase our tax burden (and in addition, may also necessitate additional expenditure on compliance and result in other costs and expenses being incurred) which, as a result, could adversely affect our business, financial condition and results of operations.
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U.S. tax legislation enacted in 2017 has significantly changed U.S. federal income tax rules and may materially adversely affect our financial condition, results of operations and cash flows.
U.S. tax legislation enacted in 2017 has significantly changed U.S. federal income tax rules with respect to business entities and other taxpayers, including by reducing the U.S. corporate income tax rate, limiting certain interest deductions, permitting immediate expensing of certain capital expenditures, adopting elements of a territorial tax system, revising the rules governing net operating losses and introducing new anti-base erosion provisions, in each case, for U.S. federal income tax purposes. Some of these changes were made effective immediately, without any transition periods or grandfathering for existing transactions. The legislation could be subject to future potential amendments and technical corrections, as well as further interpretations and implementing regulations by the Treasury Department and Internal Revenue Service, any of which could lessen or increase certain adverse impacts of the legislation. In addition, it is unclear how these U.S. federal income tax changes may affect state and local taxation.
The impact that these changes could have on us remains unclear in many respects, but these changes, as well as any further changes in the law or any implementing regulations or other authorities, could have an adverse impact on our operating results, financial condition and business operations. Investors are urged to consult their tax advisors regarding the effect of such changes on an investment in us.
Our international operations require us to comply with various trade restrictions, such as sanctions and export controls.
We are subject to various trade restrictions, including trade and economic sanctions and export controls (collectively, “Trade Controls”), imposed by governments around the world with jurisdiction over our operations. Such Trade Controls prohibit or restrict transactions involving certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine. Our failure to successfully comply with applicable Trade Controls may expose us to legal, business or reputational harm, possibly including criminal fines, imprisonment, civil penalties, disgorgement of profits, injunctions, debarment from government contracts and other measures. Investigations of alleged violations can be expensive and disruptive.
As part of our business, we engage in limited sales and transactions involving certain countries that are targets of Trade Controls. We believe that such sales and transactions are authorized by applicable regulatory exemptions. Under the informational materials exemption to the U.S. economic sanction programs, we are permitted to make certain sales to Iran, Cuba and Syria.
We endeavor to conduct our activities in compliance with applicable Trade Controls and maintain policies and procedures reasonably designed to promote compliance. However, we cannot guarantee that our policies and procedures will be effective in preventing violations, which could adversely affect our business, reputation, financial condition and results of operations. Further, we cannot predict the nature, scope or effect of future regulatory requirements, including changes that may affect existing regulatory exceptions, and we cannot predict the manner in which existing laws and regulations might be administered or interpreted.
Our failure to comply with the anti-corruption laws of the United States and various international jurisdictions could negatively impact our reputation and results of operations.
Doing business on a worldwide basis requires us to comply with anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, which may include the U.S. Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act 2010 (“UK Bribery Act”), as well as the laws of the countries where we do business. These laws and regulations may restrict our operations, trade practices, investment decisions and partnering activities. The FCPA and the UK Bribery Act prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to “foreign officials” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The UK Bribery Act also prohibits non-governmental “commercial” bribery and accepting bribes. As part of our business, we deal with governments and state-owned business enterprises, the employees and representatives of which may be considered “foreign officials” for purposes of the FCPA
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and the UK Bribery Act. We also are subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and representatives into contact with “foreign officials” responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.
In addition, some of the international locations in which we operate lack a developed legal system and have elevated levels of corruption. Our international operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and regulations. Our failure to successfully comply with these laws and regulations may expose us to reputational harm, as well as significant sanctions, including criminal fines, imprisonment, civil penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. We maintain policies and procedures designed to comply with applicable anti-corruption laws and regulations. However, there can be no guarantee that our policies and procedures will effectively prevent violations by our employees or business partners acting on our behalf, including agents, for which we may be held responsible, and any such violation could adversely affect our reputation, business, financial condition and results of operations.
The results of the United Kingdom’s referendum on withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our business.
We have material business operations in Europe, and our headquarters is in the United Kingdom. The United Kingdom is due to leave the EU on March 29, 2019. Negotiations between the United Kingdom and the EU remain ongoing and are complex, and there can be no assurance regarding the terms (if any) or timing of any resulting agreement. The withdrawal process has created significant uncertainty about the future relationship between the United Kingdom and the EU, and that this may have political consequences not only in the United Kingdom but in other member states.
Although we generated only approximately 4% of our revenues in the United Kingdom for the year ended December 31, 2018, these developments and the potential consequences of them, have had and may continue to have a material adverse effect upon global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings have been and may continue to be subject to increased market volatility. Lack of clarity about future UK laws and regulations, including financial laws and regulations, tax and free trade agreements, immigration and employment laws, could increase costs, depress economic activity, impair our ability to attract and retain qualified personnel, and have other adverse consequences. Any of these factors may have a material adverse effect on our business, results of operations, financial condition and prospects.
Fraudulent or unpermitted data access or other cyber-security or privacy breaches may cause some of our customers to lose confidence in our security measures and could result in increased costs for our company.
We collect, store and use public records, IP and sensitive data. In addition, our internal systems contain confidential information, our proprietary business information and personally identifiable information of our employees and customers. A number of our customers and suppliers also entrust us with storing and securing their own confidential data and information. Similar to other global multinational companies that provide services online, we experience cyber-threats, cyber-attacks and other attempts to breach the security of our systems, which can include unauthorized attempts to access, disable, improperly modify or degrade our information, systems and networks, the introduction of computer viruses and other malicious codes and fraudulent “phishing” e-mails that seek to misappropriate data and information or install malware onto users’ computers. Cyber-threats in particular vary in technique and sources, are persistent, frequently change and increasingly are more sophisticated, targeted and difficult to detect and prevent. In particular, our MarkMonitor brand of products, which are used to detect and protect against domain name infringements, have been, and will continue to be, the target of cyber-attacks due to the nature of the offering they provide.
Under the Transition Services Agreement, we relied on dedicated Thomson Reuters personnel who were responsible for maintaining appropriate levels of cyber-security for products and services hosted in Thomson Reuters data centers. In order to comply with Thomson Reuters’ system access requirements and
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procedures, only Thomson Reuters’ information security personnel could provide support for products and services hosted in Thomson Reuters data centers. We have gradually transitioned away from this arrangement and hired our own information security personnel. These information security personnel are still relatively new to the Company and may not be able to provide the same level of support that Thomson Reuters personnel previously provided. We also utilize third-party technology, products and services to help identify, protect and remediate our information technology systems and infrastructure against security breaches and cyber-incidents. However, our measures may not be adequate or effective to prevent, identify or mitigate attacks or breaches caused by employee error, malfeasance or other disruptions. In addition, we rely on a system of internal processes and software controls, along with policies, procedures and training to protect the confidentiality of customer data. If we fail to maintain the adequacy of our internal controls, if an employee, consultant or third-party provider purposely circumvents or violates our internal controls, policies or procedures or if we fail to adequately address the requirements of our customers’ internal controls, policies or procedures, as a result of contractual requirements or otherwise, then unauthorized access to, or disclosure or misappropriation of, customer data could occur.
We are also dependent on security measures that some of our third-party suppliers are taking to protect their own systems and infrastructure. For example, our outsourcing of certain functions requires us to sometimes grant network access to third-party suppliers. If our third-party suppliers do not maintain adequate security measures or do not perform as anticipated and in accordance with contractual requirements, we may experience security breaches, operational difficulties and/or increased costs.
Any fraudulent, malicious or accidental breach of data security could result in unintentional disclosure of, or unauthorized access to, customer, vendor, employee or other confidential or sensitive data or information, which could potentially result in additional costs to our company to enhance security or to respond to occurrences, lost sales, violations of privacy or other laws, notifications to individuals, penalties or litigation. While we maintain what we believe is sufficient insurance coverage that may (subject to certain policy terms and conditions including self-insured deductibles) cover certain aspects of security and cyber-risks and business interruption, our insurance coverage may not cover all costs or losses. Additionally, any fraudulent, malicious or accidental breach of data security could result in our disclosing valuable trade secrets, know-how or other confidential information. Media or other reports of perceived security vulnerabilities to our systems or those of our third-party suppliers, even if no breach has been attempted or occurred, could also adversely impact our brand and reputation and cause customers to lose confidence in our security measures and reliability, which would harm our ability to retain customers and gain new ones, and materially impact our business and results of operations.
Our international operations subject us to increased risks.
We have international operations and, accordingly, our business is subject to risks resulting from differing legal and regulatory requirements, political, social and economic conditions and unforeseeable developments in a variety of jurisdictions. We have expanded our presence in a number of major regions, including certain emerging markets such as India and China, and we plan to continue such expansion. Our international operations are subject to the following risks, among others:

political instability;

international hostilities, military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions;

differing economic cycles and adverse economic conditions;

unexpected changes in regulatory environments and government interference in the economy;

changes to economic sanctions laws and regulations, including regulatory exemptions that currently authorize certain of our limited dealings involving sanctioned countries;

varying tax regimes, including with respect to the imposition of withholding taxes on remittances and other payments by our partnerships or subsidiaries;

differing labor regulations, particularly in India where we have a significant number of employees;

foreign exchange controls and restrictions on repatriation of funds;
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fluctuations in currency exchange rates;

inability to collect payments or seek recourse under or comply with ambiguous or vague commercial or other laws;

insufficient protection against product piracy and differing protections for IP rights;

varying attitudes towards censorship and the treatment of information service providers by foreign governments, in particular in emerging markets;

difficulties in attracting and retaining qualified management and employees, or rationalizing our workforce;

differing business practices, which may require us to enter into agreements that include non-standard terms; and

difficulties in penetrating new markets due to entrenched competitors, lack of recognition of our brands or lack of local acceptance of our products and services.
Our overall success as a global business depends, in part, on our ability to anticipate and effectively manage these risks, and there can be no assurance that we will be able to do so without incurring unexpected costs. If we are not able to manage the risks related to our international operations, our business, financial condition and results of operations may be materially affected.
The U.S. government has recently proposed, among other actions, imposing new or higher tariffs on specified products imported from China to penalize China for what it characterizes as unfair trade practices and China has responded by proposing new or higher tariffs on specified products imported from the United States. The proposed tariffs may cause the depreciation of the renminbi (“RMB”) currency and a contraction of certain Chinese industries, which may in turn have a negative impact on our customers in China. As a result, we may have access to fewer business opportunities and our operations in that region may be negatively impacted. In addition, future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our business.
If governments or their agencies reduce their demand for our products or services or discontinue or curtail their funding, our business may suffer. Moreover, if we fail to comply with government contracting regulations, we could suffer a loss of revenues or incur price adjustments or other penalties.
The principal customers for certain of the products and services offered by our Web of Science product line are universities and government agencies, which fund purchases of these products and services from limited budgets that are sensitive to changes in private and governmental sources of funding. Recession, economic uncertainty or austerity have contributed, and may in the future contribute, to reductions in spending by such sources. Accordingly, any further decreases in budgets of universities or government agencies, which have remained under pressure, or changes in the spending patterns of private or governmental sources that fund academic institutions, are likely to adversely affect our results of operations.
In addition, we are subject to government procurement and contracting regulations, including the Federal Acquisition Regulation (the “FAR”). The FAR governs U.S. government contract pricing, including the establishment of fixed prices and labor categories/fixed hourly rates for the performance of certain of our U.S. government contracts. Under the FAR, certain contract pricing may be subject to change. Additionally, under the FAR, the U.S. government is entitled, after final payment on certain negotiated contracts, to examine our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the contract.
In connection with our U.S. government contracts, we are also subject to government inquiries, audits and review of our performance under contracts, our related cost structure and compliance with applicable laws, regulations and standards. The U.S. government contracting entity may also review the adequacy of and our compliance with our internal policies, procedures and internal controls. The U.S. government contracting party may modify, curtail or terminate its contracts and subcontracts with us, without prior notice and either at its convenience or for default based on performance. In addition, funding pursuant to
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our U.S. government contracts may be reduced or withheld as part of the U.S. Congressional appropriations process due to fiscal constraints, changing U.S. priorities or due to other reasons. Further, as a U.S. government contractor, we are subject to U.S. government inquiries, investigations, legal actions and liabilities that would not apply to a non-U.S. government contractor. In certain circumstances, if we do not comply with the terms of a contract or with regulations or statutes, our U.S. government contracts could be terminated, we could be subject to downward contract price adjustments or refund obligations, we could be assessed civil or criminal penalties (including under the False Claims Act) or we could be debarred or suspended from obtaining future contracts with the U.S. government for a specified period of time. Any such termination, adjustment, sanction, debarment or suspension could have an adverse effect on our business. We also could suffer reputational harm if allegations of impropriety were made against us, even if such allegations are later determined to be false.
We may be adversely affected by changes in legislation and regulation, which may impact how we provide products and services and how we collect and use information, in particular laws relating to the use of personal data.
Legislative and regulatory changes that impact us and our customers’ industries may impact how we provide products and services to our customers. Laws relating to e-commerce, electronic and mobile communications, privacy, data security, data protection, anti-money laundering, direct marketing and digital advertising and the use of public records have become more prevalent and developed in recent years. It is difficult to predict in what form laws and regulations will be adopted or how they will be construed by the relevant regulators or courts, or the extent to which any changes might adversely affect us. Delays in adapting our products and services to legislative and regulatory changes could harm our reputation. Also, we may be slower to respond to changes in legislation or regulation than some of our competitors or we may become subject to new legislation or regulation with regard to the products and services we offer which could cause us to be prohibited from providing certain services or make provision of affected services more expensive. We may be required to expend significant capital and other resources to ensure ongoing compliance with these laws and regulations. Claims that we have breached applicable laws or violated individuals’ privacy rights or breached our data protection obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
For example, the new EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the data protection laws of each EU member state. The GDPR implemented more stringent operational requirements for processors and controllers of personal data, including, for example, expanded disclosures about what and how personal information is to be used, limitations on retention of information, increased requirements to erase an individual’s information upon request, mandatory data breach notification requirements and higher standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities. It also significantly increased penalties for non-compliance, including where we act as a data processor.
In recent years, U.S. and European lawmakers and regulators have expressed concern over electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising. In the EU, marketing is defined broadly to include any promotional material and the rules specifically on e-marketing are currently set out in the ePrivacy Directive which will be replaced by a new ePrivacy Regulation. While the ePrivacy Regulation was originally intended to be adopted on May 25, 2018 (alongside the GDPR), it is still progressing through the European legislative process and commentators now expect it to be adopted during the second half of 2019 or the first half of 2020.
The ePrivacy Regulation will be directly implemented into the laws of each of the EU Member States, without the need for further enactment. When implemented, the ePrivacy Regulation is expected to alter rules on third-party cookies, web beacons and similar technology for online behavioral advertising and to impose stricter requirements on companies using these tools. Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ Internet usage and promote ourselves to them, and it may also impose stricter requirement on business to business marketing by email, requiring consent for marketing to prospects throughout Europe. The current draft of the ePrivacy Regulation significantly increases fining powers to the same levels as the GDPR.
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In the ordinary course of business, we collect, store, use and transmit certain types of information that are subject to different laws and regulations. In particular, data security and data protection laws and regulations that we are subject to often vary by jurisdiction and include, without limitation, various U.S. state regulations and law within EU member states that derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes). As the EU member states reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant EU member states’ laws and regulations, including where derogations from the GDPR are introduced.
Although we have executed intra-company “Standard Contractual Clauses” in compliance with the GDPR, which allow for the transfer of personal data from the EU to other jurisdictions (including the United States), data security and data protection laws and regulations are continuously evolving. There are currently a number of legal challenges to the validity of EU mechanisms for adequate data transfers (such as the Privacy Shield Framework and the Standard Contractual Clauses), and our work could be impacted by changes in law as a result of a future review of these transfer mechanisms by European regulators under the GDPR, as well as current challenges to these mechanisms in the European courts. Brexit may also mean that we are required to take additional steps to ensure that data flows from EU members states to the United Kingdom are not disrupted and remain permissible after the exit date.
Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail to comply with applicable current or future laws and regulations, we may be subject to fines, litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business. Fines are significant in some countries ( e.g. , the GDPR introduced fines of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year (whichever is higher)).
As a result of publicity surrounding GDPR in particular, some customers and prospective customers have asked us to demonstrate our compliance with GDPR as a condition of purchasing our services. We have been negatively affected by GDPR by loss of marketing contacts and loss of WHOIS data as a source for Brand Protection services.
Existing and proposed legislation and regulations, including changes in the manner in which such legislation and regulations are interpreted by courts, regulators and/or guidance may:

impose limits on our collection and use of certain kinds of information and our ability to communicate such information effectively to our customers; and

increase our cost of doing business or require us to change some of our existing business practices.
Actions by governments that restrict access to our platform in their countries could substantially harm our business and financial results.
Governments of one or more countries in which we operate from time to time seek to censor the Internet, restrict access to selected foreign websites from their country, or otherwise impose restrictions if they consider such information or the provision thereof is in violation of their laws or regulations.
Governmental authorities in other countries may seek to restrict user access to our products if they consider us to be in violation of their laws or for other reasons. In the event that the information and analytics provided on our platform is subject to censorship, or any governmental authorities restrict access to our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face restrictions, our ability to maintain or expand our geographical markets may be adversely affected, and our business operations and financial results could be adversely affected.
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Our IP rights may not be adequately protected, which may adversely affect our financial results.
We believe that our product development, brand recognition and reputation, and the technological and innovative skills of our personnel are essential to establishing and maintaining our leadership position. We rely on a combination of patent, copyright, trademark, trade secret protection, confidentiality procedures, technical measures and contractual agreements with our customers and employees to establish and protect our IP rights in our products and services. If we fail to protect our IP rights, our competitive position could suffer, which could adversely affect our business, financial condition and results of operations.
Piracy and unauthorized use of proprietary rights is a prevalent problem in general. We may be forced to initiate litigation to protect our IP rights. Litigating claims related to the enforcement of IP rights is very expensive and can be burdensome in terms of management time and resources, which could adversely affect our business and results of operations. The risk of not adequately protecting our IP rights and our exposure to competitive pressures may be increased if a competitor should resort to unlawful means in competing against us or design around our IP rights.
In addition, our legal rights and contractual agreements may provide only limited protection. Some of the content and data we use in our products and services is not proprietary to us, and can be obtained for free from public sources. Accordingly, competitors can obtain such content and data and incorporate them into competing products and services. Our customers may bypass certain of our products and services and obtain the content and data themselves. Databases in general enjoy very limited protection under IP laws. In the absence of more robust protection under IP laws, we rely on technical measures and contractual provisions to protect our databases. However, third parties may be able to copy, infringe or otherwise profit from our databases without authorization and the Internet may facilitate these activities. Moreover, it is technically possible for customers of certain of our services to make unauthorized copies of the content and data and distribute them beyond our control.
We also conduct business in some countries where the extent of effective legal protection for IP rights is uncertain. Even if we have IP rights, there is no guarantee that such rights will provide adequate protection of our databases, software or other items we consider proprietary. If we are not able to protect our IP rights, our business, financial condition and results of operations results may be adversely affected.
Some of our competitors may also be able to develop new products or services that are similar to ours without infringing our intellectual property rights, which could adversely affect our financial condition and results of operations.
We may face IP infringement claims that could be costly to defend and result in our loss of significant rights.
From time to time, we may receive notices from third parties claiming infringement by our products and services of third-party patent and other IP rights. As the number of products and services in our markets increases and the functionality of these products and services further overlaps with third-party products and services, we may become increasingly subject to claims by a third party that our products and services infringe such party’s IP rights. In addition, there is a growing occurrence of patent suits being brought by non-practicing organizations that use patents to generate revenues without manufacturing, promoting or marketing products or investing in R&D in bringing products to markets. These organizations continue to be active and target whole industries as defendants. We may not prevail in any such suit given the complex technical issues and inherent uncertainties in IP litigation. If an infringement suit against us is successful, we may be required to compensate the third party bringing the suit either by paying a lump sum or ongoing license fees to be able to continue selling a particular product or service. This type of compensation could be significant. We might also be prevented or enjoined by a court from continuing to provide the affected product or service and may be forced to significantly increase our development efforts and resources to redesign such product or service. We may also be required to defend or indemnify any customers, partners or agents who have been sued for allegedly infringing a third party’s patent in connection with using one of our products or services. Responding to IP claims, regardless of the validity, can be time-consuming for our personnel and management, result in costly litigation, cause product shipment delays, cause unavailability of our products or services delivered electronically and harm our reputation, any of which could adversely affect our results of operations.
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If we do not continue to attract, motivate and retain members of our senior management team and qualified employees, we may not be able to support our operations.
The completion and execution of our strategies depend on the continued service and performance of our senior management team. If we lose key members of our senior management team, we may not be able to effectively manage our current and future operations.
In addition, our business depends on our ability to continue to attract, motivate and retain a large number of skilled employees across all of our product lines. There is a limited pool of employees who have the requisite skills, training and education. We compete with many businesses and organizations that are seeking skilled individuals, particularly those with experience in technology and the sciences and those with PhDs in technical fields, who are particularly critical to our curation process. Attracting and retaining highly skilled employees will be costly as we offer competitive compensation packages to prospective and current employees.
Competition for professionals across our business can be intense, as other companies seek to enhance their positions in the markets we serve. In addition, competition for experienced talent in our faster growing geographic areas outside of the United States and Europe continues to intensify, requiring us to increase our focus on attracting and developing highly skilled employees in our most strategically important locations in those areas of the world.
Future organizational changes, including the implementation of our cost savings initiatives, could also cause our employee attrition rate to increase, particularly in India where we have historically experienced higher turnover. If we are unable to continue to identify or be successful in attracting, motivating and retaining appropriately qualified personnel, our business, financial condition and results of operations would be adversely affected.
We operate in a litigious environment which may adversely affect our financial results.
We may become involved in legal actions and claims arising in the ordinary course of business, including litigation regarding employment matters, breach of contract and other commercial matters. Due to the inherent uncertainty in the litigation process, the resolution of any particular legal proceeding could result in changes to our products and business practices and could have a material adverse effect on our financial position and results of operations.
We are nearing completion on our separation from Thomson Reuters and may experience unanticipated post-separation issues which could have a material adverse effect on our results of operations.
In October 2019, upon the three-year anniversary of the 2016 Transaction, we will fully exit the Transition Services Agreement. Since the closing of the 2016 Transaction, we have developed and implemented the systems and infrastructure necessary to support our current and future business. While the vast majority of services under the Transition Services Agreement are complete, we continue to receive certain facilities, financial, and technology transition services from Thomson Reuters. There are inherent risks associated with the transition services which we are unable to fully anticipate including the potential for a disruption of our operations and substantial unplanned costs, which could have a material adverse effect on our business, financial condition or results of operations.
We cannot assure you that the estimated costs to operate as a standalone company reflected in Standalone Adjusted EBITDA will prove to be accurate. See “ — We may not achieve all of the expected benefits from the items reflected in the adjustments included in Standalone Adjusted EBITDA .” Any failure to transition successfully within the term of the Transition Services Agreement, or to otherwise transition successfully as an independent company, may cause us to incur substantial expense in addition to the incurred and anticipated remaining costs associated with the Transition, and would have a material adverse effect on our business, results of operations and reputation.
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We have identified a material weakness in our internal controls as of December 31, 2018, and if we fail to implement and maintain an effective system of internal controls to remediate our material weakness over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.
During 2017, we identified that certain balance sheet account reconciliations were not being performed completely and timely due to the level of the personnel performing the reconciliations. In addition, completion and quality of the reconciliations were not being monitored consistently in a timely manner. As a result, we concluded that a material weakness in our internal control over financial reporting existed related to the preparation of balance sheet account reconciliations and the monitoring of the completion and quality of those reconciliations. Since detection of the material weakness in 2017, we have begun to implement remedial actions which include: (i) organizational changes with respect to our accounting personnel who perform reconciliations, (ii) the implementation of our new ERP systems, including an account reconciliation software, (iii) issuance of an accounting policy on account reconciliations, (iv) training for accounting personnel performing reconciliations, (v) review of balance sheet account reconciliations and (vi) monitoring of completion and quality of these reconciliations. While these improvements were implemented during 2018, management determined that the controls related to the preparation of the balance sheet account reconciliations and monitoring of the completion and quality of those reconciliations did not operate for a sufficient period of time during 2018 to conclude on operating effectiveness. As a result, management concluded that the material weakness continued to exist as of December 31, 2018. A material weakness is a deficiency, or combination of deficiencies, in internal controls such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We identified immaterial errors in our financial results and balances during 2017 and 2018 as a result of this material weakness. This control deficiency could result in a misstatement of the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
If we fail to establish and maintain adequate internal controls, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could limit our access to capital markets, adversely affect our results of operations and lead to a decline in the trading price of the ordinary shares. Additionally, ineffective internal controls could expose us to an increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.
We may need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets.
We have substantial balances of goodwill and identified intangible assets. We are required to test goodwill and any other intangible assets with an indefinite life for possible impairment on an annual basis, or more frequently when circumstances indicate that impairment may have occurred. We are also required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment.
Based on the results of the annual impairment test as of October 1, 2018, the fair values of our reporting units exceeded the individual reporting unit’s carrying value, and goodwill was not impaired. Although no reporting units failed the assessments noted above, the fair value of the Derwent Product Line approximated its carrying value. The current goodwill impairment analysis incorporates our expectations for moderate sales growth and the overall outlook for the Derwent Product Line offerings was consistent with our long-term projections. We believe that the reason for the low clearance of the annual impairment test is linked to our transition to a standalone company and the subsequent reassessment of the product lines during 2018. Upon the reassessment we determined that the Derwent Product Line contained a disproportionately higher intangible asset balance, which led to a higher carrying amount relative to the other reporting units. Based on the results of the 2018 annual impairment analysis performed, we have determined that the Derwent Product Line is at risk of a future goodwill impairment if there are declines in our future cash flow projections or if we are unsuccessful in implementing our revenues growth plans. Additionally, the fair value may be adversely affected by other market factors such as an increase in the
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discount rate used in the income approach or a decrease in market multiples used in the market approach, or an increase in the carrying value of the reporting unit. The total goodwill associated with this product line was approximately $130.4 million as of December 31, 2018. Based on the latest annual impairment test, the estimated fair value of the Derwent Product Line is approximately 2% above its carrying value.
There is significant judgment required in the analysis of a potential impairment of goodwill, identified intangible assets and fixed assets. If, as a result of a general economic slowdown, deterioration in one or more of the markets in which we operate or impairment in our financial performance and/or future outlook, the estimated fair value of our long-lived assets decreases, we may determine that one or more of our long-lived assets is impaired. An impairment charge would be recorded if the estimated fair value of the assets is lower than the carrying value and any such impairment charge could have a material adverse effect on our results of operations and financial position.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the rules and regulations of the applicable listing standards of the NYSE. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In particular, Section 404 of the Sarbanes-Oxley Act (“Section 404”) will require us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm potentially to attest to, the effectiveness of our internal control over financial reporting. As an emerging growth company, we expect to avail ourselves of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404. However, we may no longer avail ourselves of this exemption when we cease to be an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 20-F. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of our ordinary shares.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to develop, maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related and audit-related costs and significant management oversight.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our consolidated financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of
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our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of Clarivate shares. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.
For some of our products and services sold to certain customer types, such as government customers who require us to follow official procurement rules, we typically face a long selling cycle to secure new contracts that requires significant resource commitments, resulting in a long lead time before we receive revenues.
For some of our products and services sold to certain customer types such as government customers who require us to follow official procurement rules, we typically face a long selling cycle to secure each new contract. We may incur significant business development expenses during the selling cycle and we may not succeed in winning a new customer’s business, in which case we receive no revenues and may receive no reimbursement for such expenses. Current selling cycle periods could lengthen, causing us to incur even higher business development expenses with no guarantee of winning a new customer’s business. Even if we succeed in developing a relationship with a potential new customer, we may not be successful in obtaining contractual commitments after the selling cycle or in maintaining contractual commitments after the implementation cycle, which may have a material adverse effect on our business, results of operations and financial condition.
Thomson Reuters’ historical and future actions, or failure to comply with its indemnification obligations, may materially affect our business and operating results.
Although we are an independent company as a result of the 2016 Transaction, Thomson Reuters’ historical and future actions may still have a material impact on our business and operating results. In connection with the 2016 Transaction, we entered into certain agreements with Thomson Reuters, including the Transition Services Agreement and the Carve-out Acquisition Agreement. Thomson Reuters’ failure to comply with any portion of the Transition Services Agreement, including the indemnities therein, for any reason could inhibit us from operating or expanding our business in the future and/or result in significant additional costs to us. In addition, Thomson Reuters has, subject to certain exceptions, limitations and exclusions, agreed to indemnify us under the Carve-out Acquisition Agreement for certain liabilities. We could incur material additional costs if Thomson Reuters fails to meet its obligations or if we otherwise are unable to recover the amount of such liabilities.
The Company will be required to make payments to the parties to the Tax Receivable Agreement in respect of certain tax benefits, and these amounts are expected to be material.
Prior to the business combination, the Company will enter into a tax receivable agreement (the “Tax Receivable Agreement”) with the Company Owners (such persons, along with their assigns, the “TRA Parties”). The Tax Receivable Agreement will generally provide for the payment by the Company to the TRA Parties of 85% of the amount of cash savings, if any, realized (or in some circumstances are deemed to be realized) as a result of the utilization of certain tax attributes (the “Covered Tax Assets”), together with interest accrued from the date an applicable tax return reflecting such savings is due (without extension) until the applicable payment date. See the section below titled “ Certain Relationships and Related Person Transactions — Company Related Person Transactions — Tax Receivable Agreement .” We urge investors to review the terms of the draft Tax Receivable Agreement that is attached as an exhibit to this proxy statement/prospectus.
We expect that the payments made under the Tax Receivable Agreement could be substantial. The Company is required to cause its subsidiaries to make distributions to the Company in order for the Company to make payments under the Tax Receivable Agreement starting in March 2021, and the payment obligations under the Tax Receivable Agreement are not conditioned upon the TRA Parties maintaining a continued direct or indirect ownership interest in us. If the Company does not have sufficient cash to make payments owed under the Tax Receivable Agreement (and its subsidiaries cannot distribute sufficient cash to the Company to make such payments), the payments will generally be deferred and will accrue interest until paid. The obligation to make these payments may have a material and adverse impact on our liquidity and our business in the future.
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The Company will not be reimbursed for any payments made to the TRA Parties under the Tax Receivable Agreement in the event that the tax benefits are disallowed.
The TRA Parties will not reimburse the Company for any payments previously made under the Tax Receivable Agreement if such benefits are subsequently disallowed upon a successful challenge by a taxing authority, although future payments under the agreement would be adjusted to the extent possible to reflect the result of such disallowance. As a result, in certain circumstances, payments could be made under the Tax Receivable Agreement in excess of the cash tax savings if any, from the Covered Tax Assets, and the Company may not be able to recoup those payments, which could adversely affect our liquidity and our business.
In certain cases, payments made by the Company under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits realized in respect of the Covered Tax Assets.
The term of the Tax Receivable Agreement will continue until all Covered Tax Assets have been utilized or expired, unless the Company’s obligations under the agreement are accelerated (see the section below titled “ Certain Relationships and Related Person Transactions — Company Related Person Transactions — Tax Receivable Agreement ” for a discussion of relevant acceleration events). If the Company’s obligations under the Tax Receivable Agreement are accelerated, the Company will be required to make an accelerated payment to the applicable TRA Party(ies) equal to the present value of future payments under the Tax Receivable Agreement. Such payment would be based on certain assumptions, including the assumption that the Company and its subsidiaries have sufficient taxable income to fully utilize all Covered Tax Assets. The Tax Receivable Agreement also provides that upon certain changes of control, in the event that a TRA Party does not elect to terminate the Tax Receivable Agreement, payments under the Tax Receivable Agreement for each taxable year after any such event would be based on certain valuation assumptions, including the assumption that we and our subsidiaries have sufficient taxable income to fully utilize the Covered Tax Assets. Accordingly, payments under the Tax Receivable Agreement may be made years in advance of the actual realization, if any, of the anticipated future tax benefits realized in respect of the Covered Tax Assets.
Even if the payments under the Tax Receivable Agreement are not accelerated as described above, such payments may be significantly greater than the benefits realized in respect of the Covered Tax Assets, due to the manner in which payments are calculated under the Tax Receivable Agreement (including assumptions regarding the tax rates to which the Company’s subsidiaries will be subject, tax benefits that will be deemed to have been realized upon the occurrence of certain asset or equity sales, and “ordering” provisions regarding the utilization of Covered Tax Assets as opposed to other tax attributes). For further discussion regarding these terms of the Tax Receivable Agreement, see the section below titled “ Certain Relationships and Related Person Transactions — Company Related Person Transactions — Tax Receivable Agreement .” Because of the foregoing, the Company’s obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. We may be considered a less attractive acquisition target from certain potential acquirors as a result of the Company’s obligations under the Tax Receivable Agreement.
Certain provisions of the Tax Receivable Agreement limit our ability to incur additional indebtedness, which could adversely affect our business and growth strategy and affect our ability to make distributions to holders of our ordinary shares.
For so long as the Tax Receivable Agreement remains outstanding, without the prior written consent of a representative of the TRA Parties (the “TRA Party Representative”) (not to be unreasonably withheld, conditioned or delayed), we and our subsidiaries are restricted from entering into any financing agreement or amendment that would materially restrict (or in the case of amendments, further restrict beyond the restrictions in the applicable then-existing financing agreements) the Company’s ability to make payments under the Tax Receivable Agreement. In addition, the Company is prohibited under the Tax Receivable Agreement from replacing its existing financing agreements with any senior debt document that does not permit the Company’s subsidiaries to make dividends to the Company to the extent necessary to make the payments under the Tax Receivable Agreement unless the TRA Party Representative otherwise consents. These restrictions could adversely affect our business, including by preventing us from pursuing an
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acquisition or other strategic transaction that we believe is in the best interests of our company and our stockholders, thereby impeding our growth strategy. The TRA Party Representative has no fiduciary duties to the Company when deciding whether to enforce these covenants under the Tax Receivable Agreement. Furthermore, the provision in the Tax Receivable Agreement that requires the Company to make an accelerated payment to the TRA Parties in certain circumstances might make it harder for us to obtain financing from third party lenders on favorable terms. The obligation to make payments under the Tax Receivable Agreement may limit our ability to make distributions to the holders of our ordinary shares, and provisions in the Tax Receivable Agreement prevent us from making distributions to the holders of our ordinary shares in certain scenarios where payments owed to the TRA Parties under the Tax Receivable Agreement have not been timely made.
The Company would be required to make tax gross-up payments to the TRA Parties if we consummate certain corporate transactions that cause payments under the Tax Receivable Agreement to be subject to certain withholding taxes.
If we were to consummate a transaction that causes the Company (or its successor) to become a person organized in a jurisdiction other than Jersey or tax resident in a jurisdiction other than the United Kingdom, and such transaction causes payments under the Tax Receivable Agreement to become subject to withholding taxes, the Company would be required under the Tax Receivable Agreement to make tax gross-up payments to the TRA Parties in respect of such withholding taxes. Any such tax gross-up payments could have a negative impact on our liquidity and our ability to finance our growth.
Risks Related to Our Finances and Capital Structure
We have and will continue to have high levels of indebtedness and our relatively large fixed costs magnify the impact of revenues fluctuations on our operating results.
On a pro forma basis after giving effect to the Transactions and assuming no redemptions for cash, we would have had approximately $1,390.2 million of indebtedness as of December 31, 2018, primarily consisting of  $807.1 million outstanding under the Term Loan Facility net of debt issuance costs, $500 million outstanding under the 7.875% senior notes due 2024 (the “Notes”) net of debt issuance costs, and $45 million drawdown under the Revolving Credit Facility. Because borrowings under our Term Loan Facility bears interest at variable rates, any increase in interest rates on debt that we have not fixed using interest rate hedges will increase our interest expense, reduce our cash flow or increase the cost of future borrowings or refinancings. Our indebtedness could have important consequences to our investors, including, but not limited to:

increasing vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;

requiring the dedication of a substantial portion of cash flow from operations to the payment of principal of, and interest on, its indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures, acquisitions, joint ventures or other general corporate purposes;

limiting flexibility in planning for, or reacting to, changes in its business and the competitive environment; and

limiting our ability to borrow additional funds and increasing the cost of any such borrowing.
Other than variable rate debt, we believe our business has relatively large fixed costs and low variable costs, which magnifies the impact of revenues fluctuations on our operating results. As a result, a decline in our revenues may lead to a relatively larger impact on operating results. A substantial portion of our operating expenses will be related to personnel costs, regulation and corporate overhead, none of which can be adjusted quickly and some of which cannot be adjusted at all. Our operating expense levels will be based on our expectations for future revenues. If actual revenues are below management’s expectations, or if our expenses increase before revenues do, both revenues less transaction-based expenses and operating results
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would be materially and adversely affected. Because of these factors, it is possible that our operating results or other operating metrics may fail to meet the expectations of stock market analysts and investors. If this happens, the market price of our common stock may be adversely affected.
A downgrade to our credit ratings would increase our cost of borrowing and adversely affect our ability to access the capital markets.
Our cost of borrowing under the Credit Facilities and the Notes, and our ability and the terms under which we may access the credit markets are affected by credit ratings assigned to us by the major credit rating agencies. These ratings are premised on our performance under assorted financial metrics and other measures of financial strength, business and financial risk, industry conditions, timeliness of financial reporting, and other factors determined by the credit rating agencies. Our current ratings have served to lower our borrowing costs and facilitate access to a variety of lenders. However, there can be no assurance that our credit ratings or outlook will not be lowered in the future in response to adverse changes in these metrics and factors caused by our operating results or by actions that we take, that reduce our profitability, or that require us to incur additional indebtedness for items such as substantial acquisitions, significant increases in costs and capital spending in security and IT systems, significant costs related to settlements of litigation or regulatory requirements, or by returning excess cash to shareholders through dividends. A downgrade of our credit ratings would increase our cost of borrowing, negatively affect our ability to access the capital markets on advantageous terms, or at all, negatively affect the trading price of our securities, and have a significant negative impact on our business, financial condition, and results of operations.
We are a holding company that depends on cash flow from our subsidiaries to meet our obligations, and any restrictions on our subsidiaries’ ability to pay dividends or make other payments to us may have a material adverse effect on our results of operations and financial condition.
As a holding company, we require dividends and other payments from our subsidiaries to meet cash requirements. Minimum capital requirements mandated by regulatory authorities having jurisdiction over some of our regulated subsidiaries indirectly restrict the amount of dividends paid upstream. In addition, repatriations of cash from our subsidiaries may be subject to withholding, income and other taxes in various applicable jurisdictions. If our subsidiaries are unable to pay dividends and make other payments to us when needed, we may be unable to satisfy our obligations, which would have a material adverse effect on our business, financial condition and operating results.
As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of the ordinary shares.
We are a foreign private issuer, as such term is defined in Rule 405 under the Securities Act, however, under Rule 405, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2019.
As a foreign private issuer, we are not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act, that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act (including the requirement applicable to emerging growth companies to disclose the compensation of our Chief Executive Officer and the other two most highly compensated executive officers on an individual, rather than an aggregate, basis). In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, while we expect to submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. Furthermore, our ordinary shares are not listed and we do not currently intend to list our ordinary shares on any market in the Bailiwick of Jersey, our home country. As a result, we are not subject to the reporting and other requirements of
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companies listed in the Bailiwick of Jersey. For instance, we are not required to publish quarterly or semi-annual financial statements. Accordingly, there may be less publicly available information concerning our business than there would be if we were a U.S. public company.
We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.
In the future, we would lose our foreign private issuer status if a majority of our shareholders, directors or management are U.S. citizens or residents and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, the annual report on Form 10-K requires domestic issuers to disclose executive compensation information on an individual basis with specific disclosure regarding the domestic compensation philosophy, objectives, annual total compensation (base salary, bonus, and equity compensation) and potential payments in connection with change in control, retirement, death or disability, while the annual report on Form 20-F permits foreign private issuers to disclose compensation information on an aggregate basis. We would also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors, and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. We may also be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers.
We will incur increased costs and obligations as a result of being a public company.
As a privately held company, we have not been required to comply with certain corporate governance and financial reporting practices and policies required of a publicly traded company. As a publicly traded company, we will incur significant legal, accounting and other expenses that we were not required to incur in the recent past, particularly after we are no longer an “emerging growth company” as defined under the JOBS Act. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated and to be promulgated thereunder, as well as under the Sarbanes-Oxley Act, the JOBS Act, and the rules and regulations of the SEC and national securities exchanges have created uncertainty for public companies and increased the costs and the time that our board of directors and management must devote to complying with these rules and regulations. We expect these rules and regulations to increase our legal and financial compliance costs and lead to a diversion of management time and attention from revenues generating activities.
Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a publicly traded company. However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.
For as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may remain an “emerging growth company” until the fifth anniversary of the date on which Clarivate ordinary shares were offered in connection with the Transactions or until such earlier time that we have more than $1.07 billion in annual revenues, have more than $700 million in market value of our ordinary shares held by non-affiliates, or issue more than
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$1.00 billion of non-convertible debt over a three-year period. Further, there is no guarantee that the exemptions available to us under the JOBS Act will result in significant savings. To the extent we choose not to use exemptions from various reporting requirements under the JOBS Act, we will incur additional compliance costs, which may impact earnings.
As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our ordinary shares less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to obtain an assessment of the effectiveness of our internal controls over financial reporting from our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our ordinary shares less attractive because we will rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active market for our ordinary shares and our share price may be more volatile.
If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a U.S. publicly traded company in a timely and reliable manner.
If we fail to develop and maintain effective internal controls and procedures and disclosure procedures and controls, we may be unable to provide financial information and required SEC reports that a U.S. publicly traded company is required to provide in a timely and reliable fashion. Any such delays or deficiencies could penalize us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and hurt our reputation and could thereby impede our ability to implement our growth strategy. In addition, any such delays or deficiencies could result in our failure to meet the requirements for listing of our ordinary shares on a national securities exchange.
The price of our ordinary shares may be volatile.
The price of our ordinary shares may fluctuate due to a variety of factors, including:

actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in industry;

mergers and strategic alliances in the industry in which we operate;

market prices and conditions in the industry in which we operate;

changes in government regulation;

potential or actual military conflicts or acts of terrorism;

the failure of securities analysts to publish research about us, or shortfalls in our operating results compared to levels forecast by securities analysts;

announcements concerning us or our competitors; and

the general state of the securities markets.
These market and industry factors may materially reduce the market price of our ordinary shares, regardless of our operating performance.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our ordinary shares.
We currently expect that securities research analysts will establish and publish their own periodic projections for our business. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these
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securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. While we expect research analyst coverage, if no analysts commence coverage of us, the trading price and volume for our ordinary shares could be adversely affected.
Our articles of association will contain anti-takeover provisions that could adversely affect the rights of our shareholders.
Our articles of association will contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change of control transactions, including, among other things:

provisions that authorize our board of directors, without action by our shareholders, to issue additional ordinary shares and preferred shares with preferential rights determined by our board of directors;

provisions that permit only a majority of our board of directors or one or more of our shareholders who together hold at least 10% of the voting rights of our shareholders to call shareholder meetings;

provisions that impose advance notice requirements, minimum shareholding periods and ownership thresholds, and other requirements and limitations on the ability of shareholders to propose matters for consideration at shareholder meetings; provided, however, such advance notice procedure will not apply to Onex, Baring or Jerre Stead or his successor (as the “Designated Shareholder” under the Director Nomination Agreement) for so long as such person is entitled to nominate one or more members of our board of directors pursuant to the A&R Shareholders Agreement or Director Nomination Agreement; and

a staggered board whereby our directors are divided into three classes, with each class subject to retirement and re-election once every three years on a rotating basis.
These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. With our staggered board of directors, at least two annual general meetings of shareholders will generally be required in order to effect a change in a majority of our directors. Our staggered board of directors can discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potential acquirer to gain control of our board of directors in a relatively short period of time.
If a U.S. person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.
If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to us or to any of our subsidiaries that constitute a “controlled foreign corporation” (in each case, as such terms are defined under the Internal Revenue Code of 1986, as amended (the “Code”)). Certain United States shareholders of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income, as ordinary income, its pro rata share of  “Subpart F income,” “global intangible low-taxed income” and certain investments in U.S. property by controlled foreign corporations, whether or not we make any distributions to such United States shareholder. A failure by a United States shareholder to comply with its reporting obligations may subject the United States shareholder to significant monetary penalties and other adverse tax consequences, and may extend the statute of limitations with respect to the United States shareholder’s U.S. federal income tax return for the year for which such reporting was due. We cannot provide any assurances that we will assist investors in determining whether we or any of our non-U.S. subsidiaries are controlled foreign corporations or whether any investor is a United States shareholder with respect to any such controlled foreign corporations. We also cannot guarantee that we will furnish to United States shareholders information that may be necessary for them to comply with the aforementioned obligations. United States investors should consult their own advisors
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regarding the potential application of these rules to their investments in us. The risk of being subject to increased taxation may deter our current shareholders from increasing their investment in us and others from investing in us, which could impact the demand for, and value of, our ordinary shares.
Risks Related to the Business Combination
The Company Owners are large and significant shareholders that will exert certain controls on the business. As a result, we will be a “controlled company,” which exempts us from obligations to comply with certain corporate governance requirements. Also, we are a “foreign private issuer” which exempts us from relying on certain corporate governance requirements.
Upon the completion of the business combination, the Company Owners will own 217.5 million of our ordinary shares, or approximately 74% of our outstanding ordinary shares (assuming no holder of public shares exercises redemption rights and excluding the impact of 52.8 million warrants, approximately 24.5 million compensatory options issued to the Company’s management, (based on the number of options to purchase the Company’s ordinary shares outstanding as of December 31, 2018) and 10.6 million ordinary shares of Clarivate owned of record by the sponsor and distributable to Jerre Stead, Michael Klein and Sheryl von Blucher following the expiration of applicable lock-up and vesting restrictions). Accordingly, it is anticipated that Clarivate will be eligible to, and the parties intend to, take advantage of certain exemptions from corporate governance requirements provided in the NYSE rules. Specifically, as a controlled company, Clarivate will not be required to have (1) a majority of independent directors, (2) a Nominating and Corporate Governance Committee composed entirely of independent directors, (3) a Compensation Committee composed entirely of independent directors or (4) an annual performance evaluation of the Nominating and Corporate Governance Committee and Compensation Committee. Therefore, following consummation of the Transactions, Clarivate may not have a majority of independent directors, its Compensation, Nominating and Corporate Governance Committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to shareholders of listed companies that are subject to all of the applicable corporate governance requirements. In the event that Clarivate ceases to be a controlled company, it will be required to comply with those requirements within specified transition periods.
In addition, as long as Clarivate relies on the foreign private issuer exemption, Clarivate will not be required to obtain shareholder approval for certain dilutive events, such as the establishment or material amendment of certain equity-based compensation plans, and will be exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Also, as a foreign private issuer, we are permitted to and we may follow, subject to certain exceptions, home country practice in lieu of the corporate governance rules of the NYSE that require listed companies to have, among other things, a majority of independent board members and independent director oversight of executive compensation, nomination of directors and corporate governance matters. As long as we rely on the foreign private issuer exemption to certain of these corporate governance standards, a majority of our board of directors are not required to be independent directors and our Compensation Committee and Nominating and Corporate Governance Committee are not required to be composed entirely of independent directors. Therefore, our board of directors’ approach to governance may be different from that of a board of directors consisting of a majority of independent directors, and, as a result, management oversight may be more limited than if we were subject to all of the corporate governance standards of the NYSE.
Once we are no longer a “controlled company” we must comply with the independent board committee requirements as they relate to the nominating and compensation committees, on the same phase-in schedule as set forth above, with the trigger date being the date we are no longer a “controlled company” as opposed to our listing date. Additionally, we will have 12 months from the date we cease to be a “controlled company” to have a majority of independent directors on our board of directors.
We will be controlled by the Company Owners, whose interests may conflict with yours. The concentrated ownership of our ordinary shares will prevent you and other shareholders from influencing significant decisions.
As a result of its ownership of our ordinary shares, the Company Owners, so long as they hold two thirds of our outstanding ordinary shares, will have the ability to control the outcome of matters requiring
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the assent of a special resolution of shareholders. For so long as the Company Owners hold at least a majority of our outstanding ordinary shares they will have the ability, through the board of directors, to control decision-making with respect to our business direction and policies. In addition, pursuant to the A&R Shareholders Agreement, Onex and Baring have the right to nominate a majority of the members of the board of directors until such time as Onex and Baring beneficially own less than 60% of the ordinary shares held by Onex and Baring immediately after the closing of the Transactions, and continue to have the right to nominate directors in a declining number based on their aggregate beneficial ownership percentage of the ordinary shares held by Onex and Baring immediately after the closing of the Transactions. Matters over which the Company Owners will, directly or indirectly, exercise control following the completion of the Transactions include:

the election of our board of directors and the appointment and removal of our officers;

mergers and other business combination transactions requiring shareholder approval, including proposed transactions that would result in our shareholders receiving a premium price for their shares; and

amendments of the Articles.
Even if the Company Owners’ ownership of our ordinary shares falls below a majority, they may continue to be able to strongly influence or effectively control our decisions.
The Company Owners may have conflicts of interest with us and other stockholders as a result of their status as a party to the Tax Receivable Agreement. For example, the Tax Receivable Agreement gives the Company the right to terminate the Tax Receivable Agreement in certain scenarios by making a payment equal to the present value of future payments under the Tax Receivable Agreement (based on certain assumptions), subject to certain rights of the TRA Party Representative to defer the Company’s ability to terminate the Tax Receivable Agreement. The TRA Party Representative, which is an affiliate of certain Company Owners, may prevent a termination that would otherwise be favorable to our other shareholders. Similarly, a TRA Party may terminate the Tax Receivable Agreement upon certain changes of control, when such a termination may not be favorable to us and the other shareholders. In addition, the Company Owners’ rights under the Tax Receivable Agreement could influence their decisions regarding whether and when to dispose of assets or engage in other transactions that could affect the amount or timing of payments due under the Tax Receivable Agreement.
If we are characterized as a passive foreign investment company for U.S. federal income tax purposes, its U.S. shareholders may suffer adverse tax consequences.
If 75% or more of our gross income in a taxable year, including our pro-rata share of the gross income of any company, U.S. or foreign, in which we are considered to own, directly or indirectly, 25% or more of the shares by value, is passive income, then we will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes. Alternatively, we will be considered to be a PFIC if at least 50% of our assets in a taxable year, averaged over the year and ordinarily determined based on fair market value and including our pro-rata share of the assets of any company in which we are considered to own, directly or indirectly, 25% or more of the shares by value, are held for the production of, or produce, passive income. Once treated as a PFIC, for any taxable year, a foreign corporation will generally continue to be treated as PFIC for all subsequent taxable years. If we were to be a PFIC, and a U.S. holder does not make an election to treat us as a qualified electing fund (“QEF”) or a “mark-to-market” election, “excess distributions” to a U.S. holder, and any gain recognized by a U.S. holder on a disposition of our ordinary shares, would be taxed in an unfavorable way. Among other consequences, our dividends, to the extent that they constituted excess distributions, would be taxed at the regular rates applicable to ordinary income, rather than the 20% maximum rate applicable to certain dividends received by an individual from a qualified foreign corporation, and certain “interest” charges may apply. In addition, gains on the sale of our shares would be treated in the same way as excess distributions. The tests for determining PFIC status are applied annually and it is difficult to make accurate predictions of future income and assets, which are relevant to the determination of PFIC status. In addition, under the applicable statutory and regulatory provisions, it is unclear whether we would be permitted to use a gross loss from sales (sales less cost of goods sold) to offset our passive income in the calculation of gross income. Although we do not expect that we will be a PFIC in
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the future, in light of the periodic asset and income tests applicable in making this determination, no assurance can be given that we will not become a PFIC. If we do become a PFIC in the future, U.S. holders who hold ordinary shares during a period when we are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC, subject to exceptions for U.S. holders who made a timely QEF election or mark-to-market election, or certain other elections. We do not currently intend to prepare or provide the information that would enable you to make a QEF election. Accordingly, our shareholders are urged to consult their tax advisors regarding the application of PFIC rules.
Churchill will not have any right to make damage claims against the Company or the Company Owners for the breach of any representation, warranty or covenant made by the Company, Clarivate, Jersey Merger Sub or Delaware Merger Sub in the Merger Agreement.
The Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Transactions, except for those covenants contained therein that by their terms apply or are to be performed in whole or in part after the closing. Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the Merger Agreement after the closing, except for covenants to be performed in whole or in part after the closing. As a result, Churchill will have no remedy available to it if the Transactions are consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by the Company, Clarivate, Jersey Merger Sub or Delaware Merger Sub at the time of the Transactions.
The Churchill board of directors did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination.
Churchill’s board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the business combination with the Company. In analyzing the business combination, Churchill’s board and management conducted due diligence on the Company and researched the industry in which the Company operates and concluded that the business combination was in the best interest of Churchill’s stockholders. Accordingly, investors will be relying solely on the judgment of Churchill’s board of directors in valuing the Company’s business, and the board of directors may not have properly valued such business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the proposed business combination or demand redemption of their shares for cash, which could potentially impact Churchill’s ability to consummate the business combination.
Future resales of our ordinary shares and/or Clarivate warrants may cause the market price of our securities to drop significantly, even if our business is doing well.
The Company Owners, the sponsor, the founders and Garden State will be granted certain rights, pursuant to the Registration Rights Agreement, to require us to register, in certain circumstances, the resale under the Securities Act of ordinary shares of us or Clarivate warrants held by them, subject to certain conditions. The sale or possibility of sale of these ordinary shares and/or Clarivate warrants could have the effect of increasing the volatility in our share price or putting significant downward pressure on the price of our ordinary shares and/or Clarivate warrants.
We may issue additional ordinary shares or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of Clarivate’s ordinary shares.
Upon consummation of the business combination we will have warrants outstanding to purchase an aggregate of 52.8 million ordinary shares, and approximately 24.5 million compensatory options issued to the Company’s management (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018). In addition, current and former employees of the Company and service providers will hold options to purchase ordinary shares pursuant to the Clarivate Analytics Plc 2019 Incentive Award Plan. Pursuant to this plan, following the consummation of the Transactions, Clarivate may issue an aggregate of up to             ordinary shares (which amount includes the Company ordinary shares subject to options outstanding as of the time of the business combination), which amount may be subject to increase from time to time. For additional information about this plan, please read the
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discussion under the heading “ Director and Executive Officer Compensation — Employee Share Plans .” Clarivate may also issue additional ordinary shares or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without shareholder approval, in a number of circumstances.
Our issuance of additional ordinary shares or other equity securities of equal or senior rank would have the following effects:

our existing shareholders’ proportionate ownership interest in us will decrease;

the amount of cash available per share, including for payment of dividends in the future, may decrease;

the relative voting strength of each previously outstanding ordinary share may be diminished; and

the market price of our ordinary shares may decline.
If Churchill’s stockholders fail to properly demand redemption rights, they will not be entitled to redeem their shares of common stock of Churchill for a pro rata portion of the trust account.
Churchill stockholders holding public shares may demand that Churchill redeem their shares for a pro rata portion of the trust account, calculated as of two business days prior to the consummation of the business combination. Churchill stockholders who seek to exercise this redemption right must deliver their stock (either physically or electronically) to Churchill’s transfer agent prior to the vote at the meeting. Any Churchill stockholder who fails to properly demand redemption rights will not be entitled to redeem his or her shares for a pro rata portion of the trust account. See the section entitled “ Special Meeting of Churchill Stockholders — Redemption Rights ” for the procedures to be followed if you wish to redeem your shares for cash.
Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.
A public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares. Accordingly, if you hold more than 15% of the public shares and the business combination proposal is approved, you will not be able to seek redemption rights with respect to the full amount of your shares and may be forced to hold the shares in excess of 15% or sell them in the open market. Churchill cannot assure you that the value of such excess shares will appreciate over time following a business combination or that the market price of Churchill’s shares of common stock will exceed the per-share redemption price.
The NYSE may not list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We intend to apply to have our securities listed on the NYSE upon consummation of the business combination. We will be required to meet the initial listing requirements to be listed. We may not be able to meet those initial listing requirements. Even if our securities are so listed, we may be unable to maintain the listing of our securities in the future.
If we fail to meet the initial listing requirements and the NYSE does not list our securities and the related closing condition is waived by the parties, we could face significant material adverse consequences, including:

a limited availability of market quotations for our securities;

a limited amount of news and analyst coverage on us; and

a decreased ability to issue additional securities or obtain additional financing in the future.
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The sponsor and the founders, including Churchill’s officers and directors beneficially own or have an economic interest in shares of common stock and warrants of Churchill that will be worthless and have incurred reimbursable expenses and may, in certain circumstances, make loans that may not be reimbursed or repaid if the Transactions or other business combinations are not approved. Such interests may have influenced their decision to approve the Transactions.
The sponsor and the founders, including Churchill’s officers and directors and/or their affiliates, beneficially own or have an economic interest in founder shares and private placement warrants that they purchased prior to, or simultaneously with, the Churchill IPO. Such persons have no redemption rights with respect to these securities in the event a business combination is not effected in the required time period. Therefore, if the Transactions or another business combination are not approved within the required time period, such securities held by such persons will be worthless. Such securities had an aggregate market value of  $            based upon the closing prices of the shares and units on the NYSE on            , 2019, the record date. See the section entitled “ The Business Combination Proposal — Interests of Churchill’s Directors and Officers in the Business Combination .”
These financial interests may have influenced the decision of Churchill’s directors to approve the Transactions and to continue to pursue such business combination. In considering the recommendations of Churchill’s board of directors to vote for the business combination proposal and other proposals, its stockholders should consider these interests.
The sponsor is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event a business combination is not consummated. It has also agreed to pay for any liquidation expenses if a business combination is not consummated. Such liability may have influenced the sponsor’s decision to approve the business combination with the Company.
If the Transactions or another business combination are not consummated by Churchill within the required time period, the sponsor will be liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Churchill for services rendered or contracted for or products sold to Churchill. If Churchill consummates a business combination, including the Transactions, on the other hand, Churchill will be liable for all such claims. Neither Churchill nor the sponsor has any reason to believe that the sponsor will not be able to fulfill its indemnity obligations to Churchill. See the section entitled “ Other Information Related to Churchill — Financial Condition and Liquidity ” for further information. If Churchill is required to be liquidated and there are no funds remaining to pay the costs associated with the implementation and completion of such liquidation, the sponsor has also agreed to advance Churchill the funds necessary to pay such costs and complete such liquidation (currently anticipated to be no more than approximately $15,000) and not to seek repayment for such expense.
These obligations of the sponsor may have influenced Churchill’s sponsor’s decision to approve the Transactions and to continue to pursue such business combination. Michael Klein, Jerre Stead, Sheryl von Blucher, Balakrishnan S. Iyer, Karen G. Mills and Martin Broughton, each of whom is a director nominee of the Company, each has an indirect economic interest in the founder shares and private placement warrants purchased by the sponsor as a result of his or her membership interest in the sponsor. In considering the recommendations of Churchill’s board of directors to vote for the business combination proposal and other proposals, Churchill’s stockholders should consider these interests.
The exercise of Churchill’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Transactions may result in a conflict of interest when determining whether such changes to the terms of the Transactions or waivers of conditions are appropriate and in Churchill’s stockholders’ best interest.
In the period leading up to the closing of the Transactions, events may occur that, pursuant to the Merger Agreement, would require Churchill to agree to amend the Merger Agreement, to consent to certain actions taken by the Company or to waive rights that Churchill is entitled to under the Merger Agreement. Such events could arise because of changes in the course of the Company’s business, a request by the Company to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on the Company’s business and would entitle Churchill to terminate the Merger Agreement. In any of such circumstances, it would be at
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Churchill’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for Churchill and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Churchill does not believe there will be any material changes or waivers that Churchill’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. Churchill will circulate a new or amended proxy statement/prospectus if changes to the terms of the Transactions that would have a material impact on its stockholders are required prior to the vote on the business combination proposal.
If Churchill is unable to complete the Transactions or another business combination by September 11, 2020, Churchill will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Churchill and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders could be less than $10.00 per share.
Under the terms of Churchill’s amended and restated certificate of incorporation, Churchill must complete a business combination by September 11, 2020, or Churchill must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Churchill. Although Churchill has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of Churchill’s public stockholders. If Churchill is unable to complete a business combination within the required time period, the executive officers have agreed they will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Churchill for services rendered or contracted for or products sold to Churchill. However, he may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.00 due to such claims.
Additionally, if Churchill is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if Churchill otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, Churchill may not be able to return to its public stockholders at least $10.00.
Churchill’s stockholders may be held liable for claims by third parties against Churchill to the extent of distributions received by them.
If Churchill is unable to complete the Transactions or another business combination within the required time period, Churchill will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of  (ii) and (iii) above) to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Churchill cannot assure you that it will properly assess all claims that may be potentially brought against Churchill. As such, Churchill’s stockholders could potentially be liable for any
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claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Churchill cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by Churchill.
If Churchill is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Churchill’s stockholders. Furthermore, because Churchill intends to distribute the proceeds held in the trust account to its public stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, Churchill’s board may be viewed as having breached their fiduciary duties to Churchill’s creditors and/or may have acted in bad faith, and thereby exposing itself and Churchill to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. Churchill cannot assure you that claims will not be brought against it for these reasons.
Activities taken by existing Churchill stockholders to increase the likelihood of approval of the business combination proposal and other proposals could have a depressive effect on Churchill’s stock.
At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Churchill or its securities, the sponsor, the founders, including Churchill’s officers, directors and stockholders prior to Churchill IPO, Garden State, the Company, the Company Owners and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Churchill common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Transactions where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on Churchill common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.
In addition, pursuant to the Sponsor Agreement, Jerre Stead (personally or through his designee JMJS Group-II, LP) and Michael Klein have agreed to purchase from Churchill an aggregate of 1,500,000 shares of common stock of Churchill immediately prior to the closing of the Transactions for an aggregate purchase price of  $15,000,000. Such purchase may, therefore, be at a price per share that is less than the then-current market price of Churchill’s common stock and could have a depressive effect on the market price of Churchill’s common stock.
You may face difficulties in protecting your interests as a shareholder, as Jersey law provides substantially less protection when compared to the laws of the United States.
We are incorporated under Jersey law. The rights of holders of ordinary shares are governed by Jersey law, including the provisions of the Companies (Jersey) Law 1991, as amended (the “Jersey Companies Law”), and by our articles of association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations. See “ Description of Clarivate’s Securities — Material Differences between Rights of Holders of Clarivate’s Securities and Rights of Holders of Churchill’s Securities ” in this proxy statement/prospectus for a description of the principal differences between the provisions of the Jersey Companies Law applicable to us and the DGCL relating to shareholders’ rights and protections.
It may be difficult to enforce a U.S. judgment against us or our directors and officers outside the United States, or to assert U.S. securities law claims outside of the United States.
A number of our directors and executive officers are not residents of the United States, and the majority of our assets and the assets of these persons are located outside the United States. As a result, it
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may be difficult or impossible for investors to effect service of process upon us within the United States or other jurisdictions, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. See “ Description of Clarivate’s Securities — Enforcement of civil liabilities .” Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States. Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides.
Risks If the Adjournment Proposal Is Not Approved
If the adjournment proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the business combination, Churchill’s board of directors will not have the ability to adjourn the special meeting to a later date in order to solicit further votes, and, therefore, the business combination will not be approved.
Churchill’s board of directors is seeking approval to adjourn the special meeting to a later date or dates if, at the special meeting, Churchill is unable to consummate the business combination. If the adjournment proposal is not approved, Churchill’s board will not have the ability to adjourn the special meeting to a later date and, therefore, the business combination would not be completed.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus includes statements that express Churchill’s, Clarivate’s and the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement/prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transactions, the benefits and synergies of the Transactions, including anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which the Company operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting Churchill, the Company and Clarivate. Factors that may impact such forward-looking statements include:

the Company’s ability to compete in the highly competitive markets in which it operates, and potential adverse effects of this competition;

the Company’s ability to maintain revenues if its products and services do not achieve and maintain broad market acceptance, or if it is unable to keep pace with or adapt to rapidly changing technology, evolving industry standards and changing regulatory requirements.

uncertainty, downturns and changes in the markets the Company serves;

the Company’s ability to achieve all expected benefits from the items reflected in the adjustments included in Standalone Adjusted EBITDA;

the Company’s ability to achieve operational cost improvements and other benefits expected from the Transactions;

the Company’s dependence on third parties, including public sources, for data, information and other services;

increased accessibility to free or relatively inexpensive information sources;

the Company’s ability to maintain high annual revenue renewal rates as recurring subscription-based arrangements generate a significant percentage of the Company’s revenues;

the reputation of the Company’s brands and the Company’s ability to remain a trusted source of high-quality content, analytics services and workflow solutions;

the Company’s reliance on its own and third-party telecommunications, data centers and network systems, as well as the Internet;

the Company’s implementation of a new enterprise resource planning system;

the Company’s ability to fully derive anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions;

potential liability for content contained in the Company’s products and services;

exchange rate fluctuations and volatility in global currency markets;

potential adverse tax consequences resulting from the international scope of the Company’s operations, corporate structure and financing structure;

U.S. tax legislation enacted in 2017, which could materially adversely affect the Company’s financial condition, results of operations and cash flows;

increased risks resulting from the Company’s international operations;

the Company’s ability to comply with various trade restrictions, such as sanctions and export controls, resulting from its international operations;
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the Company’s ability to comply with the anti-corruption laws of the United States and various international jurisdictions;

results of the United Kingdom’s referendum on withdrawal from the EU;

fraudulent or unpermitted data access, cyber-security attacks, or other privacy breaches;

government and agency demand for the Company’s products and services and the Company’s ability to comply with government contracting regulations;

changes in legislation and regulation, which may impact how the Company provides products and services and how it collects and uses information, particularly relating to the use of personal data;

actions by governments that restrict access to our platform in their countries;

potentially inadequate protection of IP rights;

potential IP infringement claims;

the Company’s ability to attract, motivate and retain qualified employees, including members of its senior management team;

the Company’s ability to operate in a litigious environment;

the Company’s ability to transition successfully to being an independent company;

the material weakness in the Company’s internal controls as of December 31, 2018;

the Company’s potential need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets;

the Company’s status as a non-reporting company under the Exchange Act, which means it is not subject to the Sarbanes-Oxley Act of 2002 and not required to provide a management report of its internal controls;

consequences of the long selling cycle to secure new contracts for certain of the Company’s products and services;

Thomson Reuters’ historical or future actions, or potential failure to comply with its indemnification obligations;

the Company’s obligations and restrictions pursuant to the Tax Receivable Agreement;

the Company’s high level of indebtedness;

the Company’s status as a foreign private issuer, emerging growth company, holding company and controlled company;

other factors disclosed in this proxy statement/prospectus; and

other factors beyond the Company’s control.
The forward-looking statements contained in this proxy statement/prospectus are based on Churchill’s, Clarivate’s and the Company’s current expectations and beliefs concerning future developments and their potential effects on the Transactions and Clarivate. There can be no assurance that future developments affecting Churchill, the Company and/or Clarivate will be those that Churchill, Clarivate or the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond either Churchill’s, Clarivate’s or the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “ Risk Factors .” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Churchill, the Company and Clarivate will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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Before a stockholder grants its proxy or instructs how its vote should be cast or vote on the business combination proposal, charter proposals or the adjournment proposal, it should be aware that the occurrence of the events described in the “ Risk Factors ” section and elsewhere in this proxy statement/​prospectus may adversely affect Churchill, the Company and/or Clarivate.
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SPECIAL MEETING OF CHURCHILL STOCKHOLDERS
General
Churchill is furnishing this proxy statement/prospectus to Churchill’s stockholders as part of the solicitation of proxies by Churchill’s board of directors for use at the special meeting of Churchill stockholders to be held on            , 2019, and at any adjournment or postponement thereof. This proxy statement/prospectus provides Churchill’s stockholders with information they need to know to be able to vote or instruct their vote to be cast at the special meeting.
Date, Time and Place
The special meeting of stockholders will be held on            , 2019, at            :00 a.m., eastern time, at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to Churchill, at 1285 Avenue of the Americas, New York, New York 10019.
Purpose of the Churchill Special Meeting
At the special meeting, Churchill is asking holders of Churchill common stock to:

consider and vote upon a proposal to adopt the Merger Agreement and approve the business combination contemplated thereby (the business combination proposal);

consider and vote upon separate proposals to approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation: (i) the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”; (ii) Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and (iii) Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time) (charter proposals); and

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 in the event that Churchill is unable to consummate the business combination (adjournment proposal).
Recommendation of Churchill Board of Directors
Churchill’s board of directors has unanimously determined that the business combination proposal is fair to and in the best interests of Churchill and its stockholders; has unanimously approved the business combination proposal; unanimously recommends that stockholders vote “FOR” the business combination proposal; unanimously recommends that stockholders vote “FOR” each of the charter proposals; and unanimously recommends that stockholders vote “FOR” an adjournment proposal if one is presented to the meeting.
Record Date; Persons Entitled to Vote
Churchill has fixed the close of business on            , 2019, as the “record date” for determining Churchill stockholders entitled to notice of and to attend and vote at the special meeting. As of the close of business on            , 2019, there were 86,250,000 shares of Churchill common stock outstanding and entitled to vote. Each share of Churchill common stock is entitled to one vote per share at the special meeting.
Pursuant to the Sponsor Agreement, the 17,250,000 founder shares owned of record by sponsor and any shares of common stock acquired by it, the founders or Garden State in the aftermarket, will be voted in favor of the business combination proposal. The sponsor has indicated it intends to vote its shares in favor of the other proposals presented at the special meeting.
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Quorum
The presence, in person or by proxy, of a majority of all the outstanding shares of common stock entitled to vote constitutes a quorum at the special meeting.
Abstentions and Broker Non-Votes
Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to Churchill but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters. The latter will not be treated as shares entitled to vote on the matter as to which authority to vote is withheld from the broker. If a stockholder does not give the broker voting instructions, under applicable self-regulatory organization rules, its broker may not vote its shares on “non-routine” proposals, such as the business combination proposal and the charter proposals.
Vote Required
The approval of the business combination proposal and the charter proposals will require the affirmative vote for the proposal by the holders of a majority of the then outstanding shares of common stock. Abstentions and broker non-votes have the same effect as a vote against the proposals.
The approval of the adjournment proposal, if presented, will require the affirmative vote of the holders of a majority of Churchill common stock represented and entitled to vote thereon at the meeting. Abstentions are deemed entitled to vote on such proposals. Therefore, they have the same effect as a vote against the proposal. Broker non-votes are not deemed entitled to vote on such proposal and, therefore, they will have no effect on the vote on such proposal.
Voting Your Shares
Each share of Churchill common stock that you own in your name entitles you to one vote. Your proxy card shows the number of shares of Churchill common stock that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
There are two ways to vote your shares of Churchill common stock at the special meeting:

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 Churchill’s board “FOR” the business combination proposal, the charter proposals and 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 when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way Churchill can be sure that the broker, bank or nominee has not already voted your shares.
Revoking Your Proxy
If you are a stockholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

you may send another proxy card with a later date;

you may notify Churchill’s Secretary in writing before the special meeting that you have revoked your proxy; or

you may attend the special meeting, revoke your proxy, and vote in person, as indicated above.
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Who Can Answer Your Questions About Voting Your Shares
If you are a stockholder and have any questions about how to vote or direct a vote in respect of your shares of Churchill common stock, you may call MacKenzie Partners, Inc., Churchill’s proxy solicitor, at (212) 929-5500 or Churchill at (212) 380-7500.
Redemption Rights
Holders of public shares may seek to redeem their shares for cash, regardless of whether they vote for or against the business combination proposal. Any stockholder holding public shares as of the record date who votes in favor of or against the business combination proposal may demand that Churchill redeem such shares for a full pro rata portion of the trust account (which, for illustrative purposes, was $       per share as of            , 2019, the record date), calculated as of two business days prior to the anticipated consummation of the business combination. If a holder properly seeks redemption as described in this section and the business combination with the Company is consummated, Churchill will redeem these shares for a pro rata portion of funds deposited in the trust account and the holder will no longer own these shares following the business combination.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash.
The sponsor, the founders and Garden State will not have redemption rights with respect to any shares of common stock owned by them, directly or indirectly in connection with the Transactions.
Churchill stockholders who seek to redeem their public shares for cash must affirmatively vote for or against the business combination proposal. Churchill stockholders who do not vote with respect to the business combination proposal, including as a result of an abstention or a broker non-vote, may not redeem their shares for cash. Holders may demand redemption by delivering their stock, either physically or electronically using Depository Trust Company’s DWAC System, to Churchill’s transfer agent prior to the vote at the special meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed business combination is not consummated this may result in an additional cost to stockholders for the return of their shares.
Any request to redeem such shares, once made, may be withdrawn at any time up to the vote on the business combination proposal. Furthermore, if a holder of a public share delivered its certificate in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).
If the business combination is not approved or completed for any reason, then Churchill’s public stockholders who elected to exercise their redemption rights will not be entitled to redeem their shares for a full pro rata portion of the trust account, as applicable. In such case, Churchill will promptly return any shares delivered by public holders. If Churchill would be left with less than $5,000,001 of net tangible assets as a result of the holders of public shares properly demanding redemption of their shares for cash, Churchill will not be able to consummate the business combination.
The closing price of Churchill common stock on            , 2019, the record date, was $     . The cash held in the trust account on such date was approximately $            ($            per public share). Prior to exercising redemption rights, stockholders should verify the market price of Churchill common stock as they may receive higher proceeds from the sale of their common stock in the public
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market than from exercising their redemption rights if the market price per share is higher than the redemption price. Churchill cannot assure its stockholders that they will be able to sell their shares of Churchill common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.
If a holder of public shares exercises its redemption rights, then it will be exchanging its shares of Churchill common stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you affirmatively vote for or against the business combination proposal and properly demand redemption no later than the close of the vote on the business combination proposal by delivering your stock certificate (either physically or electronically) to Churchill’s transfer agent prior to the vote at the special meeting, and the business combination is consummated.
Appraisal Rights
Neither stockholders, unitholders nor warrant holders of Churchill have appraisal rights in connection the business combination under the DGCL.
Proxy Solicitation Costs
Churchill is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. Churchill and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Churchill will bear the cost of the solicitation.
Churchill has hired MacKenzie Partners, Inc. to assist in the proxy solicitation process. Churchill will pay that firm a fee of  $12,500 plus disbursements. Such payment will be made from non-trust account funds.
Churchill will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Churchill will reimburse them for their reasonable expenses.
Sponsor, Founders and Garden State
As of            , 2019, the record date, the sponsor owned of record and was entitled to vote an aggregate of 17,250,000 founder shares that was issued prior to the Churchill IPO. Such shares currently constitute 20% of the outstanding shares of Churchill’s common stock. The holders of these securities have agreed to vote the founder shares, as well as any shares of common stock acquired in the aftermarket, in favor of the business combination proposal. The holders of these securities have also indicated that they intend to vote their shares in favor of all other proposals being presented at the meeting. The founder shares have no right to participate in any redemption distribution and will be worthless if no business combination is effected by Churchill.
If the Transactions are consummated, under the Sponsor Agreement (i) the ordinary shares of Clarivate and Clarivate’s warrants to be issued to the sponsor, the founders and Garden State in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two-years, under certain circumstances) and (ii) the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher and the Clarivate warrants to held by the sponsor and available for distribution to such persons and to Garden State, in each case, will be subject to certain time and performance-based vesting provisions.
With certain limited exceptions, if the Transactions are not consummated, the founder shares will not be transferable, assignable or salable by the sponsor, the founder or Garden State until the earlier of: (1) one year after the completion of Churchill’s initial business combination; and (2) the date on which Churchill consummates a liquidation, merger, stock exchange, reorganization or other similar transaction after Churchill’s initial business combination that results in all of Churchill’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the
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foregoing, if the Transactions are not consummated and if the last reported sale price of Churchill’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after Churchill’s initial business combination, the founder shares will be released from the lock-up.
At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Churchill or its securities, the sponsor, the founders, Garden State, the Company or Company Owners and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Churchill’s common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to complete the business combination where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with the Company’s consent, the transfer to such investors or holders of shares or rights owned by the initial stockholders for nominal value.
Entering into any such arrangements may have a depressive effect on Churchill common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.
If such transactions are effected, the consequence could be to cause the business combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the business combination proposal and other proposals and would likely increase the chances that such proposals would be approved.
No agreements dealing with the above arrangements or purchases have been entered into as of the date of this proxy statement/prospectus by the sponsor, the founders, Garden State, the Company, the Company Owners or any of their respective affiliates. Churchill will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
In addition, pursuant to the Sponsor Agreement, Jerre Stead (personally or through his designee JMJS Group-II, LP) and Michael Klein have agreed to purchase from Churchill an aggregate of 1,500,000 shares of common stock of Churchill immediately prior to the closing of the Transactions for an aggregate purchase price of  $15,000,000. Such purchase may, therefore, be at a price per share that is less than the then-current market price of Churchill’s common stock and could have a depressive effect on the market price of Churchill’s common stock.
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THE BUSINESS COMBINATION PROPOSAL
The discussion in this proxy statement/prospectus of the business combination and the principal terms of the Merger Agreement is subject to, and is qualified in its entirety by reference to, the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus.
General
Structure of the Transactions
Pursuant to the Merger Agreement, a business combination between Churchill and the Company will be effected through the Jersey Merger, whereby Jersey Merger Sub shall merge with and into the Company with the Company surviving such merger. Immediately following the consummation of the Jersey Merger, the Delaware Merger Sub will merge with and into Churchill, with Churchill surviving such merger. As a result of these Mergers, Churchill and the Company will become wholly owned subsidiaries of Clarivate immediately following the closing of the Transactions. The Mergers will be effected as described in the following diagram:
[MISSING IMAGE: TV514564_ORGCHRT1.JPG]
Consideration to the Company Owners
As consideration for all of the outstanding shares of the Company, the Company Owners will receive 217.5 million ordinary shares of Clarivate (subject to adjustment as described below).
In the Jersey Merger, each ordinary share of the Company will be converted into a number of ordinary shares of Clarivate equal to the Exchange Ratio (as defined below), with any fraction of an ordinary share of Clarivate in respect of such holder’s aggregate ordinary shares of the Company rounded off to the nearest whole ordinary share of Clarivate.
Each option to purchase ordinary shares of the Company shall automatically be converted into an option to purchase ordinary shares of Clarivate with respect to that number of ordinary shares of Clarivate that is equal to the product of  (a) the number of ordinary shares of the Company subject to such the Company option as of immediately prior to the Jersey Merger, multiplied by (b) the Exchange Ratio, rounded down to the nearest whole number of ordinary shares of Clarivate, at an exercise price per ordinary share of Clarivate equal to the quotient obtained by dividing (i) the per share exercise price of such Company option (after giving effect to the reduction equal to the per share value of the Tax Receivable Agreement) by (ii) the Exchange Ratio, rounded up to the nearest whole cent.
The Exchange Ratio equals (a) (i) the amount of Excess Expenses divided by $10.00 plus (ii) 217,500,000 divided by (b) 1,646,223.01, which is formulaically expressed as:
Exchange Ratio = [(the amount of Excess Expenses / $10.00) + 217,500,000] / 1,646,223.01
The amount of Excess Expenses is the amount, if any, by which certain fees and expenses of Churchill incurred in connection with the Transactions or otherwise exceeds $45.9 million. If the amount of Excess Expenses is zero or a negative number, the amount calculated in clause (i) above shall be zero. The number referred to in clause (b) above shall be equitably adjusted in the event that any Company options are exercised after the date of the Merger Agreement.
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For additional information, please read the discussion under the heading “ Director and Executive Officer Compensation — Employee Share Plans .”
Consideration to Churchill Holders
Each outstanding share of common stock of Churchill shall be converted into one ordinary share of Clarivate. The outstanding warrants of Churchill shall, by their terms, automatically entitle the holders to purchase ordinary shares of Clarivate upon consummation of the business combination.
The Sponsor Agreement provides that the ordinary shares of Clarivate and Clarivate warrants to be issued to sponsor, the founders and Garden State in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two years, under certain circumstances). The Sponsor Agreement also provides that the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State, in each case, will be subject to certain time and performance-based vesting provisions as described under “ The Business Combination Proposal  — Related Agreements  — Sponsor Agreement ”.
Pro Forma Ownership of the Company Owners and Churchill Holders
At the closing of the Transactions, the Company Owners will hold approximately 74% of the issued and outstanding ordinary shares of Clarivate and current stockholders of Churchill will hold approximately 26% of the issued and outstanding shares of Clarivate (assuming no holder of Churchill’s public shares exercises redemption rights as described in this proxy statement/prospectus and excluding the impact of 52.8 million warrants, approximately 24.5 million compensatory options issued to Company management (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018) and 10.6 million ordinary shares of Clarivate owned of record by the sponsor and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher following the expiration of applicable lock-up and vesting restrictions). After giving effect to the satisfaction of the vesting restrictions, the Company Owners will hold approximately 71% of the issued and outstanding ordinary shares of Clarivate.
Related Agreements
Sponsor Agreement
In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement pursuant to which they have agreed to comply with the provisions of the Merger Agreement applicable to such persons as well as the covenants set forth in the Sponsor Agreement, including voting all shares of common stock of Churchill beneficially owned by such persons in favor of the Transactions.
The Sponsor Agreement provides that the ordinary shares of Clarivate and Clarivate warrants to be issued to such persons in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two years in the event Onex and/or Baring sell any ordinary shares of Clarivate prior to such date).
The Sponsor Agreement also provides that the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State, in each case, will be subject to certain time and performance-based vesting provisions described below.
50% of the ordinary shares of Clarivate held by Jerre Stead, Michael Klein and Sheryl von Blucher will vest in three equal annual installments, with the first, second and third installments vesting on the first, second and third anniversaries of the closing of the Transactions, respectively. 25% of the ordinary shares of Clarivate held by such persons will vest at such time as a $15.25 Stock Price Level (as defined below) is achieved on or before the date that is 42 months after the closing of the Transactions, and 25% of the
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ordinary shares of Clarivate held by such persons will vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the closing of the Transactions. The ordinary shares of Clarivate that are subject to vesting at the $15.25 Stock Price Level shall be eligible to vest with the ordinary shares subject to the $17.50 Stock Price Level if the $15.25 Stock Price Level is not achieved on or before the date that is 42 months after the closing of the Transactions. If any of the ordinary shares of Clarivate subject to such Stock Price Level vesting vest prior to the third anniversary of the closing of the Transactions, such ordinary shares of Clarivate shall also be subject to the time-based vesting described in the first sentence of this paragraph.
The Clarivate warrants held by Jerre Stead, Michael Klein, Sheryl von Blucher and Garden State will vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the closing of the Transactions; provided that none of such Clarivate warrants will vest prior to the first anniversary of the closing of the Transactions, not more than 1/3 of such Clarivate warrants will vest prior to the second anniversary of the closing of the Transactions, and not more than 2/3 of such Clarivate warrants will vest prior to the third anniversary of the closing of the Transactions.
In addition, if a $20.00 Stock Price Level is achieved on or before the sixth anniversary of the closing of the Transactions, Clarivate shall allot and issue up to 5,000,000 newly-issued ordinary shares of Clarivate to the persons designated by Jerre Stead and Michael Klein (or, in the event of death or incapacity of either, by his respective successor). Such newly-issued ordinary shares of Clarivate are referred to as the “Incentive Shares”.
In the event of certain sale transactions involving the ordinary shares of Clarivate or all or substantially all of the assets of Clarivate, the unvested ordinary shares of Clarivate subject only to time-based vesting shall automatically become vested. The unvested ordinary shares of Clarivate subject to performance-based vesting and the unvested Clarivate warrants subject to performance-based vesting will vest if the per share price implied in such sale transaction is equal to or greater than the applicable Stock Price Level. The Incentive Shares will also become issuable if the per share price implied in such sale transaction is equal to or greater than $20.00. For the sake of clarity, all unvested ordinary shares of Clarivate subject to performance-based vesting and the unvested Clarivate warrants subject to performance-based vesting will not vest if the per share price implied in such sale transaction is less than the applicable Stock Price Level.
Ordinary shares of Clarivate that are subject to performance-based vesting will be forfeited for no consideration to the Company Owners if they do not vest in accordance with the Sponsor Agreement. Clarivate warrants that are subject to performance-based vesting may be transferred to the Company Owners (with respect to the Clarivate warrants held by Jerre Stead, Michael Klein and Sheryl von Blucher) or Clarivate (with respect to the Clarivate warrants held by Garden State), in each case, for a purchase price equal to the original cost of such warrants, in certain circumstances if they do not vest in accordance with the Sponsor Agreement.
The applicable “Stock Price Level” will be considered achieved only when the last reported sale price per ordinary share of Clarivate on the NYSE equals or exceeds the applicable threshold for any 40 trading days during a 60 consecutive trading day period, which 60 consecutive trading day period will not commence until the earlier of  (i) the date on which Onex or Baring sell any of their respective ordinary shares of Clarivate to a third party that is not an affiliate of Onex, Baring, any founder, sponsor or Garden State or (ii) the first anniversary of the closing of the Transactions.
Pursuant to the Sponsor Agreement, Jerre Stead (personally or through his designee, JMJS Group-II, LP) and Michael Klein have agreed to purchase from Churchill an aggregate of 1,500,000 shares of common stock of Churchill immediately prior to the closing of the Transactions for an aggregate purchase price of  $15,000,000.
The Sponsor Agreement provides for certain “tag-along” rights in favor of the sponsor, if applicable, the founders and Garden State upon certain sales of ordinary shares of Clarivate by Onex or Baring following the expiration of the lock-up period described above. In addition, the Sponsor Agreement provides for certain “drag-along” rights in favor of Onex and Baring which permit Onex and Baring to
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require the founders, Garden State and, if applicable, the sponsor to sell a proportionate number of ordinary shares of Clarivate held by such persons if Onex and Baring propose to transfer 50% or more of the ordinary shares of Clarivate then-held by Onex and Baring.
The Sponsor Agreement terminates on the earlier of  (i) the latest of  (w) the expiration of the lock-up period described above, (x) the vesting in full and delivery of all ordinary shares of Clarivate and Clarivate warrants subject to vesting as described above, (y) the issuance of the Incentive Shares or (z) if the Incentive Shares have not been issued on or prior to the sixth anniversary of the Closing, the day after the sixth anniversary of the Closing or (ii) prior to the closing of the Transactions, the liquidation of Churchill or, if the closing of the Transactions shall have occurred, the liquidation of Clarivate.
Registration Rights Agreement
The Company Owners, the sponsor, the founders and Garden State will be granted certain rights, pursuant to the Registration Rights Agreement which will be entered into at or prior to the closing of the Transactions. Pursuant to the Registration Rights Agreement, such persons will be entitled to have registered, in certain circumstances, the resale of the ordinary shares of Clarivate held by them, subject to certain conditions set forth therein. The registration rights described in this paragraph apply to (i) all ordinary shares of Clarivate owned of record by such persons and (ii) Clarivate warrants held by such persons (including any ordinary shares of Clarivate issued or issuable upon the exercise of any such warrant) (the “registrable securities”), except that registrable securities shall only include ordinary shares of Clarivate or Clarivate warrants that are subject to vesting under the Sponsor Agreement in certain circumstances. Onex will be entitled to request that Clarivate register its ordinary shares on one or more occasions in the future, which registrations may be “shelf registrations.” In addition, (a) Baring shall be entitled to three such requests and (b) the sponsor, the founders and Garden State, through their “Sponsor Representative” (who shall initially be Jerre Stead), shall be entitled to one such request (which shall be increased to three such requests if Onex and Baring beneficially own, in the aggregate, less than 200,000 ordinary shares of Clarivate). The parties to the Registration Rights Agreement will also be entitled to participate in certain registered offerings by Clarivate or demand registrations by the other parties to the Registration Rights Agreement, subject to certain limitations and restrictions. Clarivate will pay certain expenses of the parties incurred in connection with the exercise of their rights under the Registration Rights Agreement. Any securities will cease to be registrable securities under the Registration Rights Agreement when (1) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of under such registration statement, (2) in the case of such securities held by Onex, Baring, the sponsor, the founders and Garden State, they shall have been distributed to the public pursuant to Rule 144 under the Securities Act (or any similar rule that may be adopted by the SEC), (3) in the case of such securities held by management of the Company, they shall have become eligible for distribution to the public pursuant to Rule 144 under the Securities Act (or any similar rule that may be adopted by the SEC) or (4) they shall have ceased to be outstanding.
Director Nomination Agreement
Pursuant to the Director Nomination Agreement, Jerre Stead, or his successor pursuant to the terms of the Director Nomination Agreement (such individual, the “Designated Shareholder”), will have the right to designate up to four nominees for the election to Clarivate’s board of directors for so long as Jerre Stead, Michael Klein, Sheryl von Blucher and their permitted transferees (collectively, the “Shareholder Group”) own at least 20% of the number of ordinary shares of Clarivate issued to the Shareholder Group in connection with the Mergers in respect of founder shares (such shares the “Initial Shares”). The number of nominees that the Designated Shareholder is entitled to nominate under the Director Nomination Agreement is dependent on the number of ordinary shares of Clarivate held by the Shareholder Group at any time. For so long as the Shareholder Group beneficially owns a number of ordinary shares of Clarivate greater than 80% of the Initial Shares, the Designated Shareholder will have the right to nominate four directors; less than 80% and equal to or greater than 60% of the Initial Shares, the Designated Shareholder will have the right to nominate three directors; less than 60% and equal to or greater than 40% or the Initial Shares, the Designated Shareholder will have the right to nominate two directors; or less than 40% and equal to or greater than 20% of the Initial Shares, the Designated Shareholder will have the right to nominate one director. In addition, the Designated Shareholder will have the right to designate the
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replacement for any of his designees whose board service has terminated prior to the end of the director’s term, provided that such nominee is reasonably acceptable to a majority of the directors not appointed by the Designated Shareholder. The Designated Shareholder will also have the right to have one designee participate on each committee of the board of directors of Clarivate, subject to compliance with applicable law and stock exchange listing rules. The Director Nomination Agreement further provides that the Designated Shareholder’s initial nominees will be Jerre Stead, Michael Klein, Balakrishnan Iyer and Sheryl von Blucher.
Until the third anniversary of the consummation of the Transactions, Jerre Stead shall serve as the Executive Chairman of the board of directors of Clarivate, subject to his earlier death, disability, resignation or retirement or removal in certain circumstances. If Jerre Stead is still serving as Executive Chairman on the third anniversary of the consummation of the Transactions, his term as Executive Chairman shall be extended until the sixth anniversary of the consummation of the Transactions unless, not earlier than 90 days nor later than 30 days prior to such third anniversary, the board of directors of Clarivate reasonably determines that it is no longer in the best interests of the Company for Jerre Stead to serve as Executive Chairman.
Amended and Restated Shareholders Agreement
In connection with execution of the Merger Agreement, the Company Owners have agreed to replace the existing Shareholders Agreement of the Company, dated as of October 3, 2016 (the “Original Shareholders Agreement”) with the A&R Shareholders Agreement. The Original Shareholders Agreement will remain in effect until the closing of the Transactions, at which time the A&R Shareholders Agreement will become effective.
The A&R Shareholders Agreement provides that Onex and Baring will have the right to designate up to nine nominees for the election to Clarivate’s board of directors. Onex and Baring will have the right to designate nominees for election to Clarivate’s board of directors so long as they own at least 7.5% of the number of ordinary shares of Clarivate owned by Onex and Baring, collectively, at the closing of the Transactions (the “Onex/Baring Initial Shares”). As between Onex and Baring, Baring will have the right to designate two nominees so long as it beneficially owns a number of ordinary shares of Clarivate greater than or equal to 50% of the ordinary shares of Clarivate owned by Baring at the closing of the Transactions and the right to designate one nominee so long as Baring beneficially owns a number of ordinary shares of Clarivate greater than or equal to 20% of the ordinary shares of Clarivate owned by Baring at the closing of the Transactions. The number of designees that Onex and Baring are entitled to nominate decreases as follows:

Nine directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 70% of the Onex/Baring Initial Shares;

Eight directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 65% of Onex/Baring Initial Shares;

Seven directors, so long as Onex and Baring beneficially own a number of Ordinary Shares greater than or equal to 60% of the Onex/Baring Initial Shares;

Six directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 55% of the Onex/Baring Initial Shares;

Five directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 50% of the Onex/Baring Initial Shares;

Four directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 40% of the Onex/Baring Initial Shares;

Three directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 30% of the Onex/Baring Initial Shares;

Two directors, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 20% of the Onex/Baring Initial Shares; and
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One director, so long as Onex and Baring beneficially own a number of ordinary shares of Clarivate greater than or equal to 7.5% of the Onex/Baring Initial Shares.
The A&R Shareholders Agreement also prohibits each of Onex and Baring from transferring ordinary shares of Clarivate other than to certain permitted transferees, with the approval of Onex and Baring, in connection with the tag-along rights described below or in a public offering. Onex shall also be permitted to transfer its ordinary shares of Clarivate following October 3, 2021, subject to the tag-along rights described below. Neither Onex nor Baring may transfer any ordinary shares of Clarivate (other than to certain permitted transferees) prior to the expiration of a 180-day lock-up period following the closing of the Transactions. Company management included in the Company Owners party to the A&R Shareholders Agreement shall be prohibited from transferring their respective ordinary shares of Clarivate other than to certain permitted transferees, in a public offering or with the approval of the board of directors of Clarivate.
The A&R Shareholders Agreement includes certain “tag-along” rights in favor of Baring upon certain sales of ordinary shares of Clarivate by Onex.
Headquarters; Stock Symbols
After completion of the Transactions:

the corporate headquarters and principal executive office of Clarivate will be located at Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK, which is the Company’s corporate headquarters; and

if the parties’ application for listing is approved, Clarivate’s ordinary shares and warrants will be traded on the NYSE under the symbols CCC and CCC WS, respectively.
Background of the Transactions
Churchill is a blank check company formed as a corporation in Delaware on June 20, 2018 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The business combination with the Company is the result of an extensive search for a potential transaction utilizing the global network and investing and transaction experience of Churchill’s management team and board of directors. The terms of the Merger Agreement are the result of arm’s-length negotiations between representatives of Churchill and the Company Owners. The following is a brief discussion of the background of these negotiations, the Merger Agreement and Transactions.
On September 11, 2018, Churchill completed its initial public offering. Prior to the consummation of the Churchill IPO, neither Churchill, nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a transaction with Churchill.
From the date of the Churchill IPO through the signing of the Merger Agreement with the Company on January 14, 2019 representatives of Churchill contacted and were contacted by a number of individuals and entities with respect to business combination opportunities and engaged with several possible target businesses in discussions with respect to potential transactions. During that period, Jerre Stead, the Chief Executive Officer and a Director of Churchill, Michael Klein, Chairman of Churchill, Sheryl von Blucher, Chief Operating Officer and a director of Churchill, and Peter M. Phelan, Chief Financial Officer of Churchill, and representatives of M. Klein and Company:

developed a list of 50 or more business combination candidates;

held conversations with numerous potential targets and their sponsors either initiated by them or by the potential target or its sponsor;

identified and evaluated five potential transactions, including the Company, all in the information services segment of the technology services and software industry, prior to focusing its efforts on a business combination transaction with the Company.
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The decision not to pursue the alternative acquisition targets was generally the result of one or more of (i) Churchill’s determination that these businesses did not represent as attractive a target as the Company due to a combination of business prospects, strategy, management teams, structure and valuation, (ii) Churchill’s decision to pursue a business combination with the Company, (iii) a difference in valuation expectations between Churchill, on the one hand, and a seller, on the other hand or (iv) a potential target’s failure to satisfy the 80% test.
On September 14, 2018, Anthony Munk of Onex called Michael Klein to discuss Churchill and the potential rationale for a transaction between the Company and Churchill. After the call, Mr. Munk emailed Mr. Klein overview materials about the Company.
On October 9, 2018, Messrs. Stead, Klein and Phelan and Ms. von Blucher of Churchill had an introductory dinner with Mr. Munk, Kosty Gilis and Amir Motamedi of Onex to discuss the rationale for a transaction with the Company.
On October 12, 2018, Messrs. Klein and Phelan met with Messrs. Munk, Ian Gutwinski and Motamedi at Onex’s offices in New York City to discuss a potential transaction with the Company, including potential transaction structures and the process for Churchill to complete a transaction in light of its status as a special purpose acquisition company. Tyler Dickson and Neil Shah of Citigroup Inc. (“Citi”) joined the meeting by telephone and spoke about the process for Churchill to complete a business combination from a capital markets perspective. Mr. Gilis and Belal Yassine of Onex also participated in the meeting by video conference.
On October 17, 2018, representatives of Onex met with the Churchill management team at Onex’s office to introduce Jay Nadler of the Company, to further discuss the rationale for a transaction with the Company and provide an overview of the Company’s business. Other attendees included Messrs. Stead (telephonically), Klein and Phelan and Ms. von Blucher (telephonically), and Messrs. Munk, Gilis, Motamedi, Paul Edwards (telephonically), Mr. Yassine (telephonically) and Mr. Gutwinski of Onex.
On October 26, 2018, Messrs. Stead, Klein and Phelan and Ms. von Blucher met with Messrs. Munk, Gilis, Motamedi, Gutwinski, Edwards (telephonically) and Yassine (telephonically) and Nadler at Onex’s offices to further discuss the Company’s business and the strategic rationale for a transaction. These attendees, other than Ms. von Blucher, continued these discussions at a dinner meeting.
On October 30, 2018, Churchill engaged Blank Rome LLP (“Blank Rome”) as transactional counsel for a potential transaction with the Company.
On November 1, 2018, Messrs. Klein, Phelan and a representative of M. Klein and Company met with Messrs. Munk, Gilis and Motamedi to further discuss a potential transaction, including structuring and timing. Messrs. Stead, Edwards and Yassine also joined telephonically.
On November 7, 2018, Churchill engaged Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel for a potential transaction with the Company.
On November 11, 2018, Messrs. Stead, Klein and Phelan and representatives of M. Klein and Company had a telephonic meeting with the Onex team and Messrs. Dickson, Shah, Rick Diamond and Clayton Hale of Citi to discuss the valuation of the Company in connection with a potential transaction. Messrs. Munk, Gilis, Motamedi, Edwards, Gutwinski and Yassine attended for Onex.
On November 12, 2018, Churchill’s board of directors met (telephonically). Churchill’s board of directors discussed Churchill’s activities since the Churchill IPO, including the evaluation of merger candidates in the business information sector and its recent focus on the Company as a potential candidate.
On November 15, 2018, the investment committee of Churchill’s board of directors met to discuss a potential transaction with the Company, including a discussion of the rationale for a transaction with the Company, an overview of the Company and a timeline for a potential transaction.
On November 21, 22 and 24, 2018, Messrs. Klein and Stead spoke telephonically to further discuss a potential transaction with the Company. On November 25, Mr. Munk sent Mr. Klein a high-level summary of a preliminary proposal of potential transaction terms.
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On November 28, 2018, Churchill commenced its due diligence review of the Company and retained various advisors to assist it in this review, including Steve Green, Heather Matzke-Hamlin and Clifford Smith, as consultants to Churchill, M. Klein and Company as its financial advisor and Ernst & Young LLP (“Ernst & Young”).
From November 28, 2018, through January 14, 2019 (the date the Merger Agreement was signed), various representatives of Churchill, the Company, Onex, M. Klein and Company, Blank Rome and Ernst & Young conducted extensive due diligence of the Company through document review and numerous telephonic conferences and in-person meetings, covering various areas, including, but not limited to: commercial operations; financial results; tax; human resources; information technology; cyber security and data privacy; litigation and legal compliance; intellectual property; insurance; and general corporate matters. These meetings and calls included a series of sessions at Onex’s offices in New York City on November 28 and November 29, 2018, which also included other members of the Company management such as Messrs. Nadler, Richard Hanks, Steve Hartman, Chris Veator, Daniel Videtto, Jeff Roy, and Ms. Annette Thomas.
On December 1, 2018, Messrs. Klein and Nadler met in New Jersey to discuss various topics related to a potential transaction.
On December 9, 2018, Blank Rome, as counsel to Churchill, and Latham & Watkins LLP (“Latham & Watkins”), as counsel to the Company, first discussed the proposed terms of an agreement and plan of merger.
On December 11, 2018, Churchill’s board of directors met to discuss a preliminary understanding with the Company Owners regarding a potential transaction with the Company, including a discussion of the proposal and timeline for a transaction, an overview of the Company’s business and financial highlights of the Company.
On December 13, 2018, management of Churchill, representatives of M. Klein and Company, Onex and the Company met telephonically to discuss transaction timing, marketing, efforts to prepare and complete a proxy statement for a transaction, tax structuring and diligence of existing Company management equity. Attendees for the calls included Messrs. Stead, Klein, Phelan, Ms. von Blucher for Churchill; Messrs. Smith and Green and representatives of M. Klein and Company, Messrs. Munk, Gilis, Motamedi, Edwards, Yassine and Carlo Chiarot of Onex and Messrs. Nadler, Hanks, Hartman and Michael Paek, Ms. Kathy Sullivan and Christine Archbold of the Company. Representatives of Latham & Watkins joined the tax meeting and management equity telephone calls.
On December 17, 2018, the investment committee of Churchill’s board of directors met to discuss the proposed Company transaction. The items discussed were the rationale for the transaction with the Company, business and financial highlights, the information services industry and a discussion of risks and issues regarding the Company and a potential transaction with the Company. Messrs. Munk and Gilis attended a portion of this meeting to provide an overview of Onex and to discuss their views of the Company. Separately, Messrs. Dickson and Shah joined a portion of the meeting telephonically to provide the board with an overview of the process and timeline of a potential transaction.
A meeting was held on December 20, 2018, at Onex’s offices in New York City to further discuss a potential transaction among Messrs. Stead, Klein and Phelan of Churchill; representatives of M. Klein and Company, Messrs. Munk, Gilis, Motamedi, Edwards and Yassine of Onex; and Messrs. Nicholas Macksey, Matthew Scattarella and Jack Hennessy of Baring.
Between December 24, 2018, and January 14, 2019, Blank Rome and Latham & Watkins continued to negotiate transaction documents, including the Merger Agreement and Sponsor Agreement.
On January 2, 2019, there was a due diligence update call among Churchill and its advisors in which the participants reviewed the outcomes of their due diligence efforts. This included, among other items, a review of commercial operations; financial results; tax; human resources; information technology; cyber security and data privacy; litigation and legal compliance; intellectual property; insurance; and general corporate matters.
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From January 2, 2019, to January 14, 2019, Messrs. Klein and Gilis had several discussions regarding various aspects of the transaction terms.
On January 3, 2019, there was a telephonic meeting of Messrs. Gilis, Motamedi, Edwards and Yassine of Onex, Messrs. Klein and Stead and Ms. von Blucher of Churchill, together with representatives of Latham & Watkins and Blank Rome to discuss open deal points.
On January 8, 2019, Churchill held a meeting with its board of directors to review the transaction. Messrs. Klein and Stead provided an extensive review of the due diligence progress, the characteristics of the Company’s business, the outlook for future performance and other potential considerations. Mr. Stead also stated that there was additional work to be completed with regards to certain areas, including finalizing the 2019 forecast and transaction documentation. The board approved the Merger Agreement and the Transactions subject to management’s satisfactory completion of due diligence and negotiation of final agreements.
On January 13, 2019, there was a Churchill board meeting to provide an additional update to the board on the transaction status. Messrs. Klein and Stead provided an update on the development of the forecast and the negotiation of the final transaction documents and recommended that the board confirm its approval of the Transactions. The board confirmed their approval of the Transactions based on the update provided.
The Merger Agreement and Sponsor Agreement were signed on January 14, 2019.
On February 26, 2019, the parties entered into Amendment No. 1 to the Merger Agreement to make certain technical amendments to the Merger Agreement.
Churchill’s Board of Directors’ Reasons for Approval of the Transactions
Churchill’s board of directors, in evaluating the Transactions, consulted with Churchill’s management and legal and financial advisors. In reaching its unanimous resolution (i) that the terms and conditions of the Merger Agreement, including the proposed Transactions, are advisable, fair to, and in the best interests of Churchill and its stockholders and (ii) to recommend that stockholders adopt and approve the Merger Agreement and approve the Transactions contemplated therein, Churchill’s board considered a range of factors, including but not limited to, the factors discussed below. In light of the number and wide variety of factors, the Churchill board did not consider it practicable to and did not attempt to quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Churchill board viewed its position as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of Churchill’s reasons for the Transactions and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “ Cautionary Note Regarding Forward-Looking Statements .”
In approving the Transactions, the Churchill board determined not to obtain a fairness opinion. The officers and directors of Churchill, including Mr. Stead and Ms. von Blucher, have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Churchill’s financial advisors, including Citi and M. Klein and Company; enabled them to make the necessary analyses and determinations regarding the Transactions with the Company. In addition, Churchill’s officers and directors and Churchill’s advisors have substantial experience with mergers and acquisitions.
In considering the Transactions, the Churchill board of directors gave considerable weight to the following factors:

Favorable Industry Trends.    The information services market is experiencing a number of favorable trends, including the potential to deploy new technologies to access the predictive analytics and data market which was estimated by International Data Corporation to reach $155 billion in 2018;
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Global, Information Services Leadership.    The Company is the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets with a comprehensive suite of intellectual property and scientific information and analytical tools and services;

Strong Platform with High Quality Assets.    The Company has proprietary databases of highly curated content that are deeply integrated into its customers’ systems, operations and workflow. Churchill believes that the Company’s platform and high quality assets lead to a sustained competitive advantage, as well as highly visible recurring revenues that are generally non-cyclical;

Recurring Revenues Model with High Retention Rates.    The Company has a highly attractive fully digital delivery model, with subscription and recurring revenues representing approximately 82% of the total revenues base, and annual revenue renewal rates in excess of 90%;

Global Customer Base.    The Company has a global customer base with revenues from North America, Europe, APAC and Emerging Markets accounting for approximately 46%, 25%, 22% and 7%, respectively, of revenues for the twelve months ended December 31, 2018;

Platform Supports Further Growth Initiatives.    The Company’s platform supports further expansion of the Company’s footprint with existing customers, new customer additions and expansion into new markets and geographic regions in order to facilitate the achievement of revenues growth;

Opportunities for Standalone Adjusted EBITDA Growth and Margin Expansion.    Further commercial, operational and cost structure improvements, such as simplifying the organizational structure, optimizing sales efforts and assessing pricing strategy, exist given the Company’s recent separation from Thomson Reuters that could significantly increase Standalone Adjusted EBITDA growth and margin expansion;

Synergistic Acquisition Opportunities.    The Company believes that there are various incremental acquisition opportunities to expand and enhance the Company’s platform which could increase Standalone Adjusted EBITDA growth. The Company’s strong platform and recurring cash flow support add-on acquisitions in vertical markets, as well as transformative acquisitions to address whitespace opportunities;

Improved Financial Flexibility.    As a result of the Company Owners rolling over all of their equity into Clarivate and the use of a portion of the cash proceeds from the Transactions to pay down the existing debt, the company’s financial flexibility is expected to benefit the planned acquisition strategy and achieve Standalone Adjusted EBITDA growth;

Commitment of the Company Owners.    The Churchill board believes that the Company Owners retaining 100% of their equity interests in the Transactions reflects their belief in and commitment to the continued growth prospects of the combined company;

Attractive Valuation.    As more fully described under “ — Comparable Company Analysis ”, the purchase price values the Company at a discount to selected comparable companies on a pro forma implied total enterprise value as a multiple of the Company’s 2019E Standalone Adjusted EBITDA;

Optimally Sized Transaction.    Upon consumption of the Transactions, the Company stockholders will hold approximately 74% of the outstanding capital stock of Clarivate and Churchill’s stockholders will hold approximately 26% of the outstanding capital stock assuming of Clarivate (assuming no holder of public shares exercises redemption rights and excluding the 10.6 million ordinary shares of Clarivate which will be subject to vesting restrictions); and

Highly Complementary Management Teams.    Jerre Stead, formerly both Chairman and CEO of IHS Markit Ltd (“IHS Markit”), will be Executive Chairman of Clarivate following the Merger. His leadership skills and experience in the information services sector will be highly complementary to the skills and experience of CEO Jay Nadler and the strong management team that he has assembled at the Company.
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The Churchill board also considered a variety of uncertainties and risks and other potentially negative factors concerning the business combination, including, but not limited to, the following:

Macroeconomic Risks.    Macroeconomic uncertainty and the effects it could have on the combined company’s revenues;

Benefits May Not Be Achieved.    The risk that the potential benefits of the Transactions may not be fully achieved or may not be achieved within the expected timeframe;

Cost Savings and Growth Initiatives May Not be Achieved.    The risk that the cost savings and growth initiatives may not be fully achieved or may not be achieved within the expected timeframe;

Foreign Holding Company Structure.    The added risks that would be present in the proposed post-merger structure, such as the risk of being able to enforce future judgments against a foreign company, that would not have been present if the combined company remained a U.S. domiciled entity;

Tax Receivable Agreement.    The risk that payments related to a tax receivable agreement may limit the availability of capital to support the Company’s growth initiatives, including M&A activities; and

Other Risks.    Various other risks associated with the business of the Company, as described in the section entitled “ Risk Factors ” appearing elsewhere in this proxy statement/prospectus.
The Churchill board concluded that the potential benefits that it expected Churchill and its shareholders to achieve as a result of the Transactions outweighed the potentially negative factors associated with the Transactions. The board also noted that the Churchill stockholders would have a substantial economic interest in the combined company (depending on the level of Churchill stockholders that sought redemption of their public shares into cash). Accordingly, the board unanimously determined that the Merger Agreement and the Transactions contemplated therein, were advisable, fair to, and in the best interests of the Churchill and its stockholders.
Certain Forecasted Financial Information for the Company
The Company provided Churchill with its internally prepared forecasts for period ending December 31, 2018 and preliminary budget for 2019. This prospective financial information was not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The forecasts were prepared solely for internal use, capital budgeting, covenant compliance planning and other management purposes. As such, they include certain pro forma adjustments that are permissible under the covenants in the Company’s Credit Agreement. The forecasts are subjective in many respects and therefore susceptible to varying interpretations and the need for periodic revision based on actual experience and business developments, and were not intended for third-party use, including by investors or holders. You are cautioned not to rely on the forecasts in making a decision regarding the transaction, as the forecasts may be materially different than actual results.
The forecasts are based on information as of the date of this proxy statement/prospectus and reflect numerous assumptions including assumptions with respect to general business, economic, market, regulatory and financial conditions and various other factors, all of which are difficult to predict and many of which are beyond the Company’s control, such as the risks and uncertainties contained in the section entitled “ Risk Factors .” The most significant assumptions upon which the Company’s management based its forecasts and the reasonable and supportable basis for those assumptions are, among other things, subscription revenue growth being driven by the higher ACV entry rate in 2019 as well as the benefit of new sales and an improvement in renewal rates. Transactional revenues are assumed to show some modest year to year growth with professional services revenue assumed to be flat year to year. Expense growth is assumed to be in line with inflation as increases in personnel related costs from higher headcount and merit compensation are offset by higher capitalization of internal and external staff. Capital expenditure assumptions reflect a return to historical spending levels seen in 2015 and 2016.
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The Company believes that the assumptions used to derive its forecasts are both reasonable and supportable. The Company’s management derived its forecasts based on modeling revenues growth assumptions and estimates of controllable expenditures. In preparing the models, the Company’s management relied on a number of factors, including the executive team’s significant experience in the content, data and analytics sector and the actual performance of the Company and its acquired companies since its separation from Thomson Reuters in October 2016.
Although the assumptions and estimates on which the forecasts for revenues and costs are based are believed by Churchill’s management to be reasonable and based on the best then currently available information, including information made available by the Company and additional anticipated cost-saving initiatives that the Company expects to implement in 2019, the financial forecasts are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company’s and Churchill’s control. There will be differences between actual and forecasted results, and actual results may be materially greater or materially less than those contained in the forecasts. The inclusion of the forecasted financial information in this proxy statement/prospectus should not be regarded as an indication that the Company or Churchill or their respective representatives considered or consider the forecasts to be a reliable prediction of future events, and reliance should not be placed on the forecasts.
The forecasts were requested by, and disclosed to, Churchill for use as a component in its overall evaluation of the Company, and are included in this proxy statement/prospectus on that account. The Company has not warranted the accuracy, reliability, appropriateness or completeness of the forecasts to anyone, including to Churchill. Neither the Company’s management nor any of its representatives has made or makes any representation to any person regarding the ultimate performance of the Company compared to the information contained in the forecasts, and none of them intends to or undertakes any obligation to update or otherwise revise the forecasts to reflect circumstances existing after the date when made or to reflect the occurrence of future events in the event that any or all of the assumptions underlying the forecasts are shown to be in error. Accordingly, they should not be looked upon as “guidance” of any sort. Clarivate will not refer back to these forecasts in its future periodic reports filed under the Exchange Act. The forecasts reflect the consistent application of the accounting policies of the Company and should be read in conjunction with the accounting policies included in Note 3 — “ Summary of Significant Accounting Policies ” accompanying the historical audited consolidated financial statement of the Company included elsewhere in this proxy statement/prospectus.
The prospective financial information included in this proxy statement/prospectus has been prepared by, and is the responsibility of, the Company’s management. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed upon procedures with respect to the accompanying prospective financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report included in this proxy statement/prospectus relates to the Company’s previously issued financial statements. It does not extend to the prospective financial information and should not be read to do so.
In its presentation to the board of directors, Churchill management presented the 2018 forecast from the Company that was available at that time. Churchill management also presented a preliminary 2019 forecast that was adjusted for certain additional cost savings initiatives that Churchill expected to be implemented in 2019. The key elements of the forecasts considered by Churchill’s board are summarized below:
Fiscal Year Ended December 31,
($ in millions)
2018E
2019E Low
2019E High
Adjusted Revenues (1)
$ 952 $ 962 $ 995
Standalone Adjusted EBITDA (2) (3)
$ 314 $ 330 $ 350
(1)
The Company defines Adjusted revenues as Revenues, net adjusted for the impact of the deferred revenues purchase accounting adjustment and revenues attributable to Intellectual Property Management Product Line. The Company does not expect to have adjustment to revenues after 2018.
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(2)
The Company defines Standalone Adjusted EBITDA as net (loss) income before provision for income taxes, depreciation and amortization and interest income and expense, adjusted to exclude acquisition or disposal-related transaction costs (such costs include net income from continuing operations before provision for income taxes, depreciation and amortization and interest income and expense from the IPM Product Line which was divested in October 2018), losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses), Transition Services Agreement costs, separation and integration costs, transformational and restructuring expenses, acquisition-related adjustments to deferred revenue, non-cash income/(loss) on equity and cost method investments, non-operating income or expense, the impact of certain non-cash and other items that are included in net income for the period that the Company does not consider indicative of its ongoing operating performance, certain unusual items impacting results in a particular period to more accurately reflect management’s view of the recurring profitability of the business, the difference between annualized run-rate savings and savings realized during that same fiscal year as well as the difference in the Company’s actual standalone costs incurred relative to the steady state standalone cost estimate that the Company expects to achieve after completion of the Transition and optimization of the standalone functions by 2021.
(3)
The Company does not provide GAAP financial measures on a forward-looking basis as it is unable to predict with reasonable certainty factors such as costs and other one-time items related to this transaction, future changes in interest rates, effective income tax rate, the future impact of unusual gains and losses, restructuring, acquisition and integration-related costs and stock based compensation due to the timing of future awards, without unreasonable effort. These items are uncertain, and depend on various factors and so this reconciliation has not been provided. These items and factors could be material to the Company’s results computed in accordance with GAAP.
Subsequent to the board meeting, and in consultation with the Company, the Standalone Adjusted EBITDA forecast was further refined and adjusted to a range of  $325 million – $345 million. The revenues forecast range was unchanged.
Comparable Company Analysis
Churchill’s management primarily relied upon a comparable company analysis to assess the value that the public markets would likely ascribe to the Company following a business combination with Churchill and this analysis was presented to the board. The relative valuation analysis was based on publicly-traded companies in the information services sector, which were determined to be leaders in this sector. The comparable companies the Churchill board reviewed within the information services sector were S&P Global Inc. (“S&P”), Moody’s Corporation (“Moody’s”), IHS Markit, FactSet Research Systems Inc. (“FactSet”), Verisk Analytics, Inc. (“Verisk”), MSCI Company (“MSCI”), and Gartner, Inc. (“Gartner”). These companies were selected by Churchill as the publicly traded companies having businesses with a similar subscription-based business model most comparable to the combined company’s business which are in the broader information services sector in the United States. However, Churchill’s board recognized that no company was identical in nature to the Company, the Company’s recent performance has been impacted by the Transition and the Company’s management team planned to pursue initiatives to enhance revenues growth and Standalone Adjusted EBITDA.
Churchill’s board of directors reviewed, among other things, the enterprise values and enterprise values as a multiple of estimated adjusted EBITDA for 2019E.
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The enterprise values and multiples for the selected comparable companies are summarized in the table below:
Company
($ in millions)
Enterprise Value
Enterprise Value/
adjusted EBITDA
2019E
S&P
$ 47,612 13.8x
Moody’s
33,321 14.0x
IHS Markit
26,394 14.8x
FactSet
8,274 15.5x
Verisk
21,282 16.8x
MSCI
15,070 17.0x
Gartner
13,970 17.7x
Information Services Median
$ 21,282 15.5x
Note:
Estimates based on market data as of January 11, 2019 and the most recent available balance sheet data for each company as of January 11, 2019.
Based on the review of these selected comparable publicly traded companies, Churchill’s board concluded that the Company’s pro forma implied total enterprise value as a multiple of Standalone Adjusted EBITDA was below the total Enterprise Value as a multiple of adjusted EBITDA of similar benchmarks of such companies. This analysis supported the Churchill board’s determination, based on a number of factors, that the terms of the Transactions were fair to and in the best interests of Churchill and its stockholders. Churchill’s board views Standalone Adjusted EBITDA as the appropriate measure of the Company’s performance since it adjusts the Company’s actual standalone costs incurred relative to the steady state cost estimate it expects to achieve after the termination of the Transition Services Agreement and the anticipated establishment and optimization of standalone functions by the end of 2020.
Satisfaction of 80% Test
It is a requirement under Churchill’s amended and restated certificate of incorporation that any business acquired by Churchill have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding the deferred underwriting commissions at the time of the execution of a definitive agreement for an initial business combination). As of January 14, 2019, the date of the execution of the Merger Agreement, the balance of the funds in the trust account was approximately $671 million (excluding $24.15 million of deferred underwriting commissions) and 80% thereof represents approximately $537 million. In reaching its conclusion on the 80% asset test, Churchill’s board of directors used as a fair market value the $4,200 million enterprise value for the Company, which was implied based on the terms of the Transactions agreed to by parties in negotiating the Merger Agreement. This fair market value was implied based on adding (i) the $2,175 million common equity value consideration to the current Company Owners, and (ii) the $2,025 million of net debt reported by the Company as of September 30, 2018. The parties to the Merger Agreement considered factors such as the Company’s historical financial results, the future growth outlook and financial plan, as well as valuations and trading of publicly traded companies in similar and adjacent sectors. The board determined that the consideration being paid in the merger, which amount was negotiated at arms-length, was fair to, and in the best interests of, Churchill and its stockholders and appropriately reflected the Company’s value. The board based this conclusion on (i) a comparison of  (a) the ratio of enterprise value over estimated 2019 Standalone Adjusted EBITDA of 12.7x for Clarivate, based on a $4,312 million enterprise value of Clarivate after giving effect to the Transactions, to (b) the median enterprise value over estimated 2019 adjusted EBITDA of 15.5x for the selected comparable companies; (ii) a review of the 2018 and 2019 forecasts, as described above in the section “  — Certain Forecasted Financial Information for the Company ”; and (iii) a range of qualitative and quantitative factors such as the Company’s leadership position, management experience, Standalone Adjusted EBITDA margin and future growth and margin expansion opportunities.
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The Churchill board of directors believes that because of the financial skills and background of its directors, it was qualified to conclude that the acquisition of the Company met the 80% requirement. Based on the fact that the $4,200 million fair market value of the Company as described above, is in excess of the threshold of approximately $537 million, representing 80% of the balance of the funds in the trust account (excluding the deferred underwriting commissions), the Churchill board determined that the fair market value of the Company was substantially in excess of 80% of the funds in the trust account and that the 80% test was met.
Interests of Churchill’s Directors and Officers in the Business Combination
In considering the recommendation of the board of directors of Churchill to vote in favor of approval of the business combination proposal, the charter amendments proposal and the other proposals, stockholders should keep in mind that the sponsor, including its directors and executive officers, have interests in such proposals that are different from, or in addition to, those of Churchill stockholders generally. In particular:

If the Transactions or another business combination are not consummated by September 11, 2020, Churchill will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 17,250,000 initial shares held by the sponsor that are distributable to the founders and Garden State which were acquired for an aggregate purchase price of  $25,000 prior to the Churchill IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of  $            based upon the closing price of  $            per share on the NYSE on            , 2019 the record date.

The sponsor, and through the sponsor, the founders and Garden State, purchased an aggregate of 18,300,000 private placement warrants from Churchill for an aggregate purchase price of $18,300,000 (or $1.00 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of Churchill IPO. A portion of the proceeds Churchill received from these purchases were placed in the trust account. Such warrants had an aggregate market value of  $            based upon the closing price of $            per warrant on the NYSE on            , 2019, the record date. The private placement warrants will become worthless if Churchill does not consummate a business combination by September 11, 2020.

Jerre Stead will become Executive Chairman of Clarivate and Michael Klein, Sheryl von Blucher, Martin Broughton, Karen G. Mills and Balakrishnan S. Iyer will become directors of Clarivate after the closing of the Transactions. As such, in the future each will receive any cash fees, stock options or stock awards that the Clarivate board of directors determines to pay to its executive and non-executive directors.

If Churchill is unable to complete a business combination within the required time period, its executive officers will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Churchill for services rendered or contracted for or products sold to Churchill. If Churchill consummates a business combination, on the other hand, Churchill will be liable for all such claims.

The founders, including Churchill’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Churchill’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Churchill fails to consummate a business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Churchill may not be able to reimburse these expenses if the Transactions or another business combination, are not completed by September 11, 2020.

The continued indemnification of current directors and officers and the continuation of directors’ and officers’ liability insurance.
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Pursuant to the Sponsor Agreement, if the last sale price of Clarivate’s ordinary shares is at least $20.00 per share for at least 40 trading days over any 60 consecutive trading day period ending at any time prior to the six-year anniversary of the consummation of the business combination with the Company, such persons designated by Jerre Stead and Michael Klein (or, in the event of death or incapacity of either, by his respective successor) will be issued an aggregate of 5,000,000 ordinary shares of Clarivate. If the business combination is not consummated then this performance incentive will not be available.

In connection with the business combination with the Company, Churchill has engaged The Klein Group, LLC, an affiliate of M. Klein and Company, LLC and of the sponsor, to act as Churchill’s financial advisor in connection with the Mergers. Pursuant to this engagement, Churchill will pay The Klein Group, LLC an advisory fee of  $12.5 million, which shall be earned upon the closing of the Mergers. $7.5 million of such fee shall be payable upon the closing of the Mergers, $2.5 million of such fee shall be payable on January 31, 2020 and the final $2.5 million of such fee shall be payable on January 29, 2021. The payment of such fee is conditioned upon the completion of the Mergers. The engagement of The Klein Group, LLC and the payment of the advisory fee has been approved by Churchill’s audit committee and board of directors in accordance with Churchill’s related persons transaction policy.
Recommendation of Churchill’s Board of Directors
After careful consideration of the matters described above, particularly the Company’s leading position in its industry, high quality assets, potential for growth and profitability, the Company’s competitive positioning, its global customer relationships, and technical skills, Churchill’s board determined unanimously that each of the business combination proposal, the charter proposals and the adjournment proposal, if presented, is fair to and in the best interests of Churchill and its stockholders. Churchill’s board of directors has approved and declared advisable and unanimously recommend that you vote or give instructions to vote “FOR” each of these proposals.
The foregoing discussion of the information and factors considered by the Churchill board of directors is not meant to be exhaustive, but includes the material information and factors considered by the Churchill board of directors.
Material United States Federal Income Tax Consequences of the Business Combination to Churchill Security Holders
The following section is a summary of material United States federal income tax consequences of the Delaware Merger to holders of Churchill common stock and warrants other than the sponsor and its affiliates. This discussion addresses only those Churchill security holders (other than the sponsor and its affiliates) that hold their securities as a capital asset within the meaning of Section 1221 of the Code and does not address all the United States federal income tax consequences that may be relevant to particular holders in light of their individual circumstances or to holders that are subject to special rules, such as:

financial institutions;

other entities classified as partnerships for U.S. federal income tax purposes;

tax-exempt organizations;

dealers in securities or currencies;

traders in securities that elect to use a mark-to-market method of accounting;

holders owning or treated as owning 5% or more of Churchill’s shares or of Clarivate’s shares (except as described below);

persons holding Churchill common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment; and

Non-U.S. holders (as defined below, and except as otherwise discussed below).
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For purposes of this section, a U.S. holder is a beneficial owner of Churchill common shares or warrants who or which is any of the following for U.S. federal income tax purposes:

an individual who is a citizen or resident of the U.S.;

a corporation, including any entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;

an estate if its income is subject to U.S. federal income taxation regardless of its source; or

a trust if  (a) a U.S. court can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (b) it has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person.
If an entity treated as a partnership for U.S. federal income tax purposes holds our capital stock or warrants the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding Churchill stock and/or warrants and the partners in such partnerships are urged to consult their tax advisors regarding the U.S. federal income tax consequences to them.
This discussion is based upon the Code, applicable treasury regulations thereunder, published rulings and court decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and foreign laws, or federal laws other than those pertaining to the income tax, are not addressed.
Neither Churchill nor Clarivate intends to request any ruling from the Internal Revenue Service as to the U.S. federal income tax consequences of the Transactions.
THE U.S. FEDERAL INCOME TAX TREATMENT OF THE DELAWARE MERGER AND THE U.S. FEDERAL INCOME TAX TREATMENT OF HOLDERS OF CHURCHILL COMMON SHARES AND WARRANTS DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. IN ADDITION, THE U.S. FEDERAL INCOME TAX TREATMENT OF THE TRANSACTIONS AND THE U.S. FEDERAL INCOME TAX TREATMENT OF OWNING CLARIVATE ORDINARY SHARES AND WARRANTS TO ANY PARTICULAR STOCKHOLDER WILL DEPEND ON THE STOCKHOLDER’S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF CLARIVATE ORDINARY SHARES AND WARRANTS.
U.S. Federal Income Tax Considerations of the Delaware Merger to U.S. Holders
The Delaware Merger taken together with the Jersey Merger is intended to qualify as an exchange under Section 351 of the Code. The remainder of this disclosure assumes the Delaware Merger so qualifies. Churchill also believes that there is a reporting position that the Delaware Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code (a “reorganization”) and if it so qualifies the U.S. federal income tax consequences to U.S. Holders of Churchill common shares and warrants could be different. Although this disclosure discusses certain U.S. federal income tax consequences of the Delaware Merger if it qualifies as a reorganization, there is significant uncertainty as to whether such a characterization would be sustained if reorganization status is challenged by the Internal Revenue Service. U.S. holders are urged to consult their tax advisors regarding the proper tax treatment of the Delaware Merger, including with respect to the potential qualification of the Delaware Merger as a reorganization.
For U.S. federal income tax purposes, the automatic conversion in the Delaware Merger of Churchill warrants into warrants to acquire Clarivate ordinary shares should be treated as a surrender of Churchill warrants and the receipt of Clarivate warrants. The discussion that follows does not specifically address all of the consequences to U.S. holders who hold different blocks of Churchill stock (generally, shares of
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Churchill stock purchased or acquired on different dates or at different prices) and holders of Churchill stock who receive a mixture of cash and Clarivate ordinary shares in exchange for their Churchill stock; such holders are urged to consult their tax advisors to determine how the applicable rules apply to them.
Section 367 of the Code and the Treasury regulations promulgated thereunder impose certain additional requirements for qualifying under Sections 351 and 368 of the Code with respect to transactions where, as may be the case in the Delaware Merger, a U.S. person exchanges stock or securities in a U.S. corporation for stock or securities in a foreign corporation (these rules generally are not applicable to non-U.S. persons). In general, for an exchange of Churchill common shares for Clarivate ordinary shares by a U.S. holder in the Delaware Merger to meet these additional requirements, certain reporting requirements must be satisfied and each of the following conditions must be met: (i) no more than 50% of both the total voting power and the total value of the stock of the transferee foreign corporation is received, in the aggregate, by the “U.S. transferors” (as defined in the Treasury regulations and computed taking into account direct, indirect and constructive ownership) in the transaction; (ii) no more than 50% of each of the total voting power and the total value of the stock of the transferee foreign corporation is owned, in the aggregate, immediately after the transaction by “U.S. persons” (as defined in the Treasury regulations) that are either officers or directors or “five-percent target shareholders” (as defined in the Treasury regulations and computed taking into account direct, indirect and constructive ownership) of the U.S. corporation; (iii) either (A) the U.S. holder is not a “five-percent transferee shareholder” (as defined in the Treasury regulations and computed taking into account direct, indirect and constructive ownership) of the transferee foreign corporation or (B) the U.S. holder is a “five-percent transferee shareholder” of the transferee foreign corporation and enters into an agreement with the Internal Revenue Service to recognize gain under certain circumstances; and (iv) the “active trade or business test” is satisfied as defined in Treasury Regulation Section 1.367(a)-3(c)(3). It is currently expected that conditions (i), (ii), and (iv) will be met and that, as a result, the Delaware Merger will not fail to satisfy the applicable requirements under Section 367 on account of such conditions.
This discussion does not provide any further analysis regarding Section 367 of the Code and does not address the tax consequences to any Churchill shareholder that will own 5% or more of either the total voting power or the total value of the outstanding stock of Clarivate after the Delaware Merger (determined after taking into account ownership under the applicable attribution rules of the Code and applicable Treasury regulations). All Churchill stockholders that will own 5% or more of either the total voting power or the total value of the outstanding stock of Clarivate after the Delaware Merger may want to enter into a valid “gain recognition agreement” under applicable Treasury regulations and are strongly urged to consult their own tax advisors to determine the particular consequences of the Delaware Merger.
U.S. holders exchanging only Churchill common shares for Clarivate ordinary shares
A U.S. holder that owns only Churchill common shares but not Churchill warrants and that exchanges such common shares for Clarivate ordinary shares generally should not recognize gain or loss. The aggregate tax basis for U.S. federal income tax purposes of the shares of Clarivate received by such U.S. holder in the Delaware Merger should be the same as the aggregate adjusted tax basis of the Churchill shares surrendered in exchange therefor. The holding period of the shares of Clarivate received in the Delaware Merger by such U.S. holder should include the period during which the Churchill shares exchanged therefor were held by such U.S. holder.
U.S. holders exchanging only Churchill warrants for Clarivate warrants
If the Delaware Merger qualifies as an exchange under Code Section 351, but not as a reorganization, a U.S. holder whose Churchill warrant automatically converts into a warrant to purchase Clarivate ordinary shares should recognize gain or loss upon such exchange equal to the difference between the fair market value of the Clarivate warrant received and such U.S. holder’s adjusted tax basis in its Churchill warrant. A U.S. holder’s tax basis in its Clarivate warrant deemed received in the Delaware Merger should equal the fair market value of such warrant. A U.S. holder’s holding period in its Clarivate warrant should begin on the day after the Delaware Merger.
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If the Delaware Merger qualifies as a reorganization as well as a Code Section 351 exchange, a U.S. holder whose Churchill warrant is converted into a warrant to purchase Clarivate ordinary shares should not recognize gain or loss on such exchange. In such case, a U.S. holder’s tax basis in the Clarivate warrant received should be equal to the holder’s adjusted tax basis in the Churchill warrant exchanged therefor and the U.S. holder should be able to “tack on” its holding period in the surrendered Churchill warrant to such U.S. holder’s holding period in its Clarivate warrant.
U.S. holders exchanging Churchill common shares and warrants for Clarivate ordinary shares and warrants
If the Delaware Merger qualifies as an exchange under Code Section 351, but not as a reorganization, a U.S. holder that receives Clarivate ordinary shares in exchange for such U.S. holder’s Churchill shares and whose Churchill warrants automatically convert into warrants to purchase Clarivate ordinary shares should recognize gain (if any) with respect to each Churchill common share and warrant held immediately prior to the Delaware Merger in an amount equal to the lesser of  (i) the excess (if any) of the fair market value of the Clarivate ordinary shares and warrants to acquire Clarivate ordinary shares deemed received in exchange for such share or warrant, as described below over such U.S. holder’s tax basis in the Churchill share or warrant exchanged therefor or (ii) the fair market value of the warrants to acquire Clarivate ordinary shares deemed received in exchange for such Churchill share or warrant. To determine the amount of gain, if any, that such U.S. holder must recognize, the holder must compute the amount of gain or loss realized as a result of the Delaware Merger on a share-by-share and warrant-by-warrant basis by allocating the aggregate fair market value of  (i) the Clarivate ordinary shares received by such U.S. holder and (ii) the warrants to purchase Clarivate ordinary shares owned by such U.S. holder as a result of the Delaware Merger among the Churchill common shares and warrants owned by such U.S. holder immediately prior to the Delaware Merger in proportion to their fair market values. Any loss realized by a U.S. holder would not be recognized.
Gain, if any, described in the previous paragraph that is recognized by a U.S. holder will generally be long-term capital gain to the extent it is allocated to surrendered Churchill shares or warrants that were held by such U.S. holder for more than one year at the time of the Delaware Merger. A U.S. holder will be able to “tack on” its holding period in the surrendered Churchill equity to such U.S. holder’s holding period in its Clarivate shares received in exchange therefor. A U.S. holder’s holding period in the Clarivate warrants received will begin on the day after the Delaware Merger.
If the Delaware Merger qualifies as a reorganization as well as a Code Section 351 exchange, a U.S. holder that receives Clarivate ordinary shares and whose warrants are automatically converted into warrants to purchase Clarivate ordinary shares in the Delaware Merger should not recognize any gain or loss on such exchange. In such case, a U.S. holder’s tax basis in the Clarivate warrants received in the exchange should be equal to such U.S. holder’s adjusted tax basis in the Churchill equity exchanged therefor and the U.S. holder should be able to “tack on” its holding period in the surrendered Churchill equity to such U.S. holder’s holding period in its Clarivate warrants received in exchange therefor. Similarly, a U.S. holder’s tax basis in the Clarivate shares received in the exchange should be equal to such U.S. holder’s adjusted tax basis in the Churchill equity exchanged therefor and the U.S. holder will be able to “tack on” its holding period in the surrendered Churchill equity to such U.S. holder’s holding period in its Clarivate shares received in exchange therefor.
U.S. holders redeeming Churchill common shares for cash and exchanging Churchill warrants for Clarivate warrants
If the Delaware Merger does not qualify as a reorganization, a U.S. holder receiving cash for Churchill common shares and whose Churchill warrants automatically convert into warrants to purchase Clarivate ordinary shares should recognize gain or loss with respect to the warrant conversion portion of the transaction equal to the difference between the fair market value of the Clarivate warrants received less such U.S. holder’s adjusted tax basis in its Churchill warrants surrendered (the tax consequences of the redemption of Churchill common shares are discussed below). If, however, the Delaware Merger qualifies as a reorganization, a U.S. holder receiving cash for Churchill common shares whose Churchill warrants automatically convert into warrants to purchase Clarivate ordinary shares generally should not recognize gain or loss with respect to the warrant conversion portion of the transaction.
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If the Delaware Merger does not qualify as a reorganization (or if the Delaware Merger qualifies as a reorganization and the exercise of redemption rights by U.S. holders with respect to Churchill common shares is treated as a separate transaction from any reorganization in connection with the Delaware Merger), U.S. holders that exercise redemption rights and elect to receive cash in exchange for their Churchill shares in the Delaware Merger should, with respect to such redemption, generally be treated as recognizing gain or loss (or be treated as receiving a corporate distribution) in a manner similar to that described below in the section titled “ U.S. holders redeeming Churchill common shares for cash and not receiving any other consideration in the transactions .”
If the Delaware Merger qualifies as a reorganization, and if U.S. holders who exercise redemption rights and elect to receive cash in exchange for their Churchill shares are treated as having received such cash in the reorganization, then such U.S. holders should generally recognize gain (but not loss) on such exchange equal to the difference between the amount of cash received and such U.S. holder’s adjusted basis in the Churchill equity exchanged therefor.
The discussion in the preceding paragraphs in this section assumes that a U.S. holder receiving cash for Churchill common shares and whose Churchill warrants automatically convert into warrants will be treated (where such exchanges are not considered to be made in connection with a reorganization) as separate exchanges of Churchill common shares for cash received in the redemption and of Churchill warrants for Clarivate warrants received in the conversion. It also assumes that if a U.S. holder receiving cash for Churchill common shares and whose Churchill warrants automatically convert into warrants is treated as having undertaken those transactions as part of a reorganization, the terms of the transactions specifying that cash received in the redemption will be received in exchange for Churchill common shares and that the Clarivate warrants received in the exchange will be received in exchange for Churchill warrants will be considered economically reasonable for applicable tax purposes.
The character of any gain recognized and the tax basis and holding period of the Churchill warrants received on a redemption of Churchill shares for cash and an exchange of Churchill warrants for Holding warrants will depend on a number of factors, including whether the Delaware Merger qualifies as a reorganization, whether the U.S. holder holds different blocks of Churchill stock (generally, shares of Churchill stock purchased or acquired on different dates or at different prices), if the redemption is treated as a separate transaction from the Delaware Merger (and any exchange(s) qualifying as a reorganization in connection with the Delaware Merger) for tax purposes, if the redemption of Churchill common shares and conversion of Churchill warrants has the effect of the distribution of a dividend for applicable tax purposes, or if the redemption is “substantially disproportionate’ with respect to the U.S. holder or is “not essentially equivalent to a dividend” under the applicable U.S. federal income tax rules more fully described below. U.S. holders are urged to consult their tax advisors regarding the U.S. federal income tax consequences if they intend to redeem their Churchill common stock and exchange Churchill warrants in the transaction.
U.S. holders redeeming Churchill common shares for cash and not receiving any other consideration in the transactions
Regardless of whether the Delaware Merger qualifies as a reorganization or only as a Code Section 351(a) exchange, the treatment for U.S. federal income tax purposes of a U.S. holder receiving cash for Churchill common shares will depend on whether the transaction qualifies as a sale of such stock or whether the U.S. holder will be treated as receiving a corporate distribution. Whether the U.S. holder’s receipt of cash for Churchill common shares qualifies for sale treatment will depend largely on the total number of shares of Churchill common shares treated as held by the U.S. holder (including any stock constructively owned by the U.S. holder as a result of, among other things, owning warrants) relative to all of shares of Churchill common stock both before and after the redemption, taking into account other transactions occurring in connection with the redemption (including transactions pursuant to the Merger Agreement). The redemption of stock generally will be treated as a sale of the stock (rather than as a corporate distribution) if the redemption is “substantially disproportionate” with respect to the U.S. holder, results in a “complete termination” of the U.S. holder’s interest in Churchill or is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more fully below.
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In determining whether any of the foregoing tests are satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of Churchill that are constructively owned by such U.S. holder. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock the U.S. holder has a right to acquire by exercise of an option, which generally would include common stock that could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of Churchill’s outstanding voting stock actually and constructively owned by the U.S. holder immediately following the redemption of Churchill must, among other requirements, be less than 80% of the percentage of Churchill’s outstanding voting stock actually and constructively owned by the U.S. holder immediately before the redemption. There will be a complete termination of a U.S. holder’s interest if either all the shares of Churchill actually and constructively owned by the U.S. holder are redeemed or all the shares of Churchill actually owned by the U.S. holder are redeemed and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other stock. The redemption of the Churchill common shares will not be essentially equivalent to a dividend if a U.S. holder’s redemption results in a “meaningful reduction” of the U.S. holder’s proportionate interest in Churchill. Whether the redemption will result in a meaningful reduction in a U.S. holder’s proportionate interest in Churchill will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult with its own tax advisors as to the tax consequences of redemption.
If the redemption qualifies as a sale of stock by the U.S. holder under Section 302 of the Code, the U.S. holder should generally be required to recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of Churchill redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. A U.S. holder’s tax basis in such holder’s shares of Churchill generally will equal the cost of such shares. A U.S. holder that purchased Units would have been required to allocate the cost between the shares of Churchill ordinary shares and the warrants comprising the Units based on their relative fair market values at the time of the purchase.
If the redemption does not qualify as a sale of stock under Section 302 of the Code, then the U.S. holder will be treated as receiving a corporate distribution. Such distribution generally will constitute a dividend for U.S. federal income tax purposes to the extent paid from current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in such U.S. holder’s Churchill common shares. Any remaining excess will be treated as gain realized on the sale or other disposition of the Churchill common shares.
U.S. Federal Income Tax Considerations of the Delaware Merger to Non-U.S. Holders
This section summarizes the U.S. federal income tax considerations of the Delaware Merger for non-U.S. holders. For these purposes, a non-U.S. holder is a beneficial owner of Churchill stock or warrants who is neither a U.S. holder nor an entity that is treated as a partnership for U.S. federal income tax purposes.
A non-U.S. holder will generally be treated in the same manner as a U.S. holder for U.S. federal income tax purposes except that any such non-U.S. holder who would otherwise recognize gain under the rules described above for U.S.-holders will not be subject to U.S. federal income tax on the exchange of such non-U.S. holder’s Churchill shares or warrants unless (i) the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if required by an applicable tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States or (ii) the non-U.S. holder is a non-resident alien individual present in the United States for 183 days or more during the taxable year in which the Delaware Merger takes place and certain other requirements are met.
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U.S. Federal Income Tax Consequences of the Ownership and Disposition of Clarivate Ordinary Shares and Warrants
U.S. Holders
Distributions on Clarivate ordinary shares
Subject to the discussion below under “ Passive Foreign Investment Company Status ,” the gross amount of any distribution on Clarivate ordinary shares that is made out of Clarivate’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds Clarivate’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S. holder’s tax basis in its Clarivate ordinary shares, and thereafter as capital gain recognized on a sale or exchange. Clarivate may not maintain calculations of its earnings and profits under United States federal income tax principles and, therefore, U.S. holders should expect that the entire amount of any distribution generally will be reported as dividend income to them.
Sale, exchange, redemption or other taxable disposition of Clarivate’s ordinary shares or warrants
Subject to the discussion below under “ Passive Foreign Investment Company Status ,” a U.S. holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of Clarivate ordinary shares or warrants in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. holder’s adjusted tax basis in such shares or such warrants. Any gain or loss recognized by a U.S. holder on a taxable disposition of Clarivate ordinary shares or warrants generally will be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in such shares or such warrants exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations.
Exercise or lapse of a Clarivate warrant
Subject to the PFIC rules discussed below, a U.S. holder generally will not recognize gain or loss upon the acquisition of a Clarivate ordinary share on the exercise of a Clarivate warrant for cash. A U.S. holder’s tax basis in a Clarivate ordinary share received upon exercise of the Clarivate warrant generally will be an amount equal to the sum of the U.S. holder’s tax basis in the Clarivate warrant exchanged therefor and the exercise price. The U.S. holder’s holding period for a Clarivate ordinary share received upon exercise of the Clarivate warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Clarivate warrant and will not include the period during which the U.S. holder held the Clarivate warrant. If a warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
Characterization of Clarivate as a “Controlled Foreign Corporation” for U.S. Federal Income Tax Purposes
Special rules would apply if Clarivate is classified as a “controlled foreign corporation,” or CFC, for U.S. federal income tax purposes. Clarivate will generally be classified as a CFC if more than 50% of its outstanding shares, measured by reference to voting power or value, are owned (directly, indirectly or by attribution) by “10% U.S. Shareholders.” For this purpose, a “10% U.S. Shareholder” is any U.S. person that owns directly, indirectly or by attribution, 10% or more of the voting power of the issued and outstanding ordinary shares of Clarivate or 10% or more of the total value of shares of all classes of stock of Clarivate. If Clarivate were to be classified as a CFC, a 10% U.S. Shareholder may be subject to U.S. federal income taxation at ordinary income tax rates on all or a portion of Clarivate’s undistributed earnings and profits attributable to certain categories of passive income and certain other income described in Subpart F of the Code, and may also be subject to U.S. federal income taxation at ordinary income tax rates on any gain realized on a sale of Ordinary Shares, to the extent of the current and accumulated earnings and profits of Clarivate attributable to such shares.
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In addition, each person who is a 10% U.S. Shareholder of any CFC for a taxable year must include in gross income for U.S. federal income tax purposes such 10% U.S. Shareholder’s global intangible low-taxed income, or GILTI, for the taxable year. In general, GILTI with respect to a 10% U.S. Shareholder is the excess (if any) of its “net CFC tested income” (see below) over its “net deemed tangible income” (generally representing a 10% deemed return on tangible business assets). A 10% U.S. Shareholder’s “net CFC tested income” is generally equal to the excess of its aggregate pro rata share of the “tested income” of each CFC with respect to which it is a 10% U.S. Shareholder over its aggregate pro rata share of the “tested loss” of each such CFC. The “tested income” or “tested loss” of a CFC is generally determined by subtracting from the CFC’s gross income (excluding any Subpart F income and certain other amounts) the amount of any deductions properly allocable to such gross income. If Clarivate or one of its non-U.S. subsidiaries is a CFC, any 10% U.S. Shareholder of Clarivate who owns Clarivate ordinary shares directly, or indirectly through non-U.S. entities, on the last day in such company’s taxable year on which it is a CFC must take into account its pro rata share (based on direct or indirect ownership of value) of such company’s “tested income” or “tested loss” for purposes of determining the amount of GILTI that such 10% U.S. Shareholder must include in gross income.
If Clarivate or one of its non-U.S. subsidiaries is a CFC, the rules relating to PFICs generally would not apply to a 10% U.S. Shareholder of such company.
The CFC rules are complex and U.S. holders that are, or maybe, 10% U.S. Shareholders are urged to consult their own tax advisors regarding the possible application of the CFC rules to them in their particular circumstances.
Passive Foreign Investment Company Status
The treatment of U.S. holders of the Clarivate ordinary shares could be materially different from that described above, if Clarivate is treated as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes.
A non-U.S. corporation, such as Clarivate, will be a PFIC for U.S. federal income tax purposes for any taxable year in which, after the application of certain look-through rules either: (i) 75% or more of its gross income for such taxable year is passive income, or (ii) 50% or more of the total value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. The determination of whether Clarivate is a PFIC is based upon the composition of the Clarivate’s income and assets, (including, among others, corporations in which Clarivate owns at least a 25% interest), and the nature of Clarivate’s activities.
Based on the projected composition of its income and assets, including goodwill, it is not expected that Clarivate will be a PFIC for its taxable year that includes the date of the Delaware Merger or in the foreseeable future. The tests for determining PFIC status are applied annually after the close of the taxable year, and it is difficult to predict accurately future income and assets relevant to this determination. The fair market value of the assets of Clarivate is expected to depend, in part, upon (a) the market value of the Clarivate ordinary shares, and (b) the composition of the assets and income of Clarivate. A decrease in the market value of the Clarivate ordinary shares and/or an increase in cash or other passive assets (including as a result of the Delaware Merger) would increase the relative percentage of its passive assets. The application of the PFIC rules is subject to uncertainty in several respects and, therefore, the IRS may assert that, contrary to expectations, Clarivate is a PFIC for the taxable year that includes the date of the Delaware Merger or in a future year. Accordingly, there can no assurance that Clarivate will not be a PFIC for its taxable year that includes the date of the Delaware Merger or any future taxable year.
If Clarivate is or becomes a PFIC during any year in which a U.S. holder holds Clarivate ordinary shares, unless the U.S. holder makes a qualified electing fund (QEF) election or mark-to-market election with respect to the shares, as described below, a U.S. holder generally would be subject to additional taxes (including taxation at ordinary income rates and an interest charge) on any gain realized from a sale or other disposition of the Clarivate ordinary shares and on any “excess distributions” received from Clarivate, regardless of whether Clarivate qualifies as a PFIC in the year in which such distribution is received or gain
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is realized. For this purpose, a pledge of the Clarivate ordinary shares as security for a loan may be treated as a disposition. The U.S. holder would be treated as receiving an excess distribution in a taxable year to the extent that distributions on the shares during that year exceed 125% of the average amount of distributions received during the three preceding taxable years (or, if shorter, the U.S. holder’s holding period). To compute the tax on excess distributions or on any gain, (i) the excess distribution or gain would be allocated ratably over the U.S. holder’s holding period, (ii) the amount allocated to the current taxable year and any year before the first taxable year for which Clarivate was a PFIC would be taxed as ordinary income in the current year, and (iii) the amount allocated to other taxable years would be taxed at the highest applicable marginal rate in effect for each such year (i.e. at ordinary income tax rates) and an interest charge would be imposed to recover the deemed benefit from the deferred payment of the tax attributable to each such prior year.
If Clarivate were to be treated as a PFIC, a U.S. holder may avoid the excess distribution rules described above by electing to treat Clarivate (for the first taxable year in which the U.S. holder owns any shares) and any lower-tier PFIC (for the first taxable year in which the U.S. holder is treated as owning an equity interest in such lower-tier PFIC) as a QEF. If a U.S. holder makes an effective QEF election with respect to Clarivate (and any lower-tier PFIC), the U.S. holder will be required to include in gross income each year, whether or not Clarivate makes distributions, as capital gains, its pro rata share of Clarivate’s (and such lower-tier PFIC’s) net capital gains and, as ordinary income, its pro rata share of Clarivate’s (and such lower-tier PFIC’s) net earnings in excess of its net capital gains. U.S. holders can make a QEF election only if Clarivate (and each lower-tier PFIC) provides certain information, including the amount of its ordinary earnings and net capital gains determined under U.S. tax principles. Clarivate does not intend to provide the information necessary for you to make a qualified electing fund election if we are classified as a PFIC.
As an alternative to making a QEF election, a U.S. holder may also be able to avoid some of the adverse U.S. tax consequences of PFIC status by making an election to mark the Clarivate ordinary shares to market annually. A U.S. holder may elect to mark-to-market the Clarivate ordinary shares only if they are “marketable stock.” The Clarivate ordinary shares will be treated as “marketable stock” if they are regularly traded on a “qualified exchange.” The Clarivate Ordinary Shares will be treated as regularly traded in any calendar year in which more than a de minimis quantity of the Clarivate ordinary shares are traded on at least 15 days during each calendar quarter.
U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of the PFIC rules. If Clarivate is treated as a PFIC, each U.S. holder generally will be required to file a separate annual information return with the IRS with respect to Clarivate and any lower-tier PFICs.
Medicare surtax on net investment income
Non-corporate U.S. holders whose income exceeds certain thresholds generally will be subject to 3.8% surtax on their “net investment income” (which generally includes, among other things, dividends on, and capital gain from the sale or other taxable disposition of, the Clarivate ordinary shares). Non-corporate U.S. holders should consult their own tax advisors regarding the possible effect of such tax on their ownership and disposition of the Clarivate ordinary shares.
Additional reporting requirements
Certain U.S. holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating to Clarivate ordinary shares, subject to certain exceptions (including an exception for Clarivate ordinary shares held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return, for each year in which they hold Clarivate ordinary shares. Substantial penalties apply to any failure to file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not willful neglect. Also, in the event a U.S. holder does not file IRS Form 8938 or fails to report a specified foreign financial asset that is required to be reported, the statute of limitations on
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the assessment and collection of U.S. federal income taxes of such U.S. holder for the related taxable year may not close before the date which is three years after the date on which the required information is filed. U.S. holders should consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of Clarivate ordinary shares.
Non-U.S. Holders
In general, a non-U.S. holder of Clarivate ordinary shares or warrants will not be subject to U.S. federal income tax or, subject to the discussion below under “ Information Reporting and Backup Withholding, ” U.S. federal withholding tax on any dividends received on Ordinary Shares or any gain recognized on a sale or other disposition of Clarivate ordinary shares (including, any distribution to the extent it exceeds the adjusted tax basis in the non-U.S. holder’s Clarivate ordinary shares) or warrants unless:

the dividend or gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if required by an applicable tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or

in the case of gain only, the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the sale or disposition, and certain other requirements are met.
A non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable tax treaty) on its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.
Information Reporting and Backup Withholding
In general, information reporting requirements may apply to dividends received by U.S. holders of Clarivate ordinary shares, and the proceeds received on the sale, exchange or redemption of Clarivate ordinary shares or warrants effected within the United States (and, in certain cases, outside the United States), in each case other than U.S. holders that are exempt recipients (such as corporations). Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. holder’s broker) or is otherwise subject to backup withholding. Any redemptions treated as dividend payments with respect to Clarivate ordinary shares and proceeds from the sale, exchange, redemption or other disposition of Clarivate ordinary shares or warrants may be subject to information reporting to the IRS and possible U.S. backup withholding. U.S. holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Information returns may be filed with the IRS in connection with, and non-U.S. holders may be subject to backup withholding on, amounts received in respect of their Clarivate ordinary shares or warrants, unless the non-U.S. holder furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the non-U.S. holder otherwise establishes an exemption. Dividends paid with respect to Clarivate ordinary shares and proceeds from the sale of other disposition of Clarivate ordinary shares or warrants received in the United States by a non-U.S. holder through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding unless such non-U.S. holder provides proof an applicable exemption or complies with certain certification procedures described above, and otherwise complies with the applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the U.S. holder’s U.S. federal income tax liability, and a U.S. holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.
The conclusions expressed above are based on current law. Future legislative, administrative or judicial changes or interpretations, which can apply retroactively, could affect the accuracy of those conclusions. This discussion is intended to provide only a summary of certain United States federal income tax consequences of
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the Delaware Merger to holders of Churchill shares and/or warrants. It does not address tax consequences that may vary with, or are contingent on, your individual circumstances. In addition, the discussion does not address any non-income tax or any non-U.S. or U.S. state or local tax consequences of the business combination. Accordingly, you are strongly urged to consult with your tax advisor to determine the particular United States federal, state, local or non-U.S. income or other tax consequences to you of the business combination.
Jersey Tax Considerations
This summary of Jersey taxation issues can only provide a general overview of this area and it is not a description of all the tax considerations that may be relevant to a decision to invest in Clarivate.
The following summary of the anticipated treatment of Clarivate and holders of ordinary shares (other than residents of Jersey) is based on Jersey taxation law and practice as it is understood to apply at the date of this document and may be subject to any changes in Jersey law occurring after such date. It does not constitute legal or tax advice and does not address all aspects of Jersey tax law and practice (including such tax law and practice as it applies to any land or building situate in Jersey). Legal advice should be taken with regard to individual circumstances. Prospective investors in the ordinary shares should consult their professional advisers on the implications of acquiring, buying, selling or otherwise disposing of ordinary shares in Clarivate under the laws of any jurisdiction in which they may be liable to taxation.
Shareholders should note that tax law and interpretation can change and that, in particular, the levels and basis of, and reliefs from, taxation may change and may alter the benefits of investment in Clarivate.
Any person who is in any doubt about their tax position or who is subject to taxation in a jurisdiction other than Jersey should consult their own professional adviser.
Company Residence
Under the Income Tax (Jersey) Law 1961 (as amended) (“Tax Law”), a company shall be regarded as resident in Jersey if it is incorporated under the Jersey Companies Law unless:

its business is centrally managed and controlled outside Jersey in a country or territory where the highest rate at which any company may be charged to tax on any part of its income is 10% or higher; and

the company is resident for tax purposes in that country or territory.
It is intended that Clarivate will not be resident for tax purposes in Jersey and not subject to any rate of tax in Jersey as it will instead be resident in the United Kingdom where the tax rate is in excess of 10%.
Summary
Under current Jersey law, there are no capital gains, capital transfer, gift, wealth or inheritance taxes, or any death or estate duties. No capital or stamp duty is levied in Jersey on the issue, conversion, redemption, or transfer of ordinary shares. On the death of an individual holder of ordinary shares (whether or not such individual was domiciled in Jersey), duty at rates of up to 0.75% of the value of the relevant ordinary shares may be payable on the registration of any Jersey probate or letters of administration which may be required in order to transfer, convert, redeem, or make payments in respect of, ordinary shares held by a deceased individual sole shareholder, subject to a cap of  £100,000.
Income Tax — Clarivate
The general rate of income tax under the Tax Law on the profits of companies regarded as resident in Jersey or having a permanent establishment in Jersey is 0% (“zero tax rating”) though certain exceptions from zero tax rating might apply.
Withholding Tax — Clarivate
For so long as Clarivate is rated for tax, or is not deemed to be resident for tax purposes in Jersey, no withholding in respect of Jersey taxation will be required on payments in respect of the ordinary shares to any holder of the ordinary shares not resident in Jersey.
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Stamp Duty
In Jersey, no stamp duty is levied on the issue or transfer of the ordinary shares (unless there is any element of Jersey residential property being transferred, in which case a land transaction tax may apply pursuant to the Taxation (Land Transactions) (Jersey) Law 2009) except that stamp duty is payable on Jersey grants of probate and letters of administration, which will generally be required to transfer ordinary shares on the death of a holder of such ordinary shares if such holder was entered as the holder of the shares on the register maintained in Jersey. In the case of a grant of probate or letters of administration, stamp duty is levied according to the size of the estate (wherever situated in respect of a holder of ordinary shares domiciled in Jersey, or situated in Jersey in respect of a holder of ordinary shares domiciled outside Jersey) and is payable on a sliding scale at a rate of up to 0.75% on the value of an estate up to a maximum stamp duty charge of  £100,000. The rules for joint holders and Clarivate through a nominee are different and advice relating to this form of holding should be obtained from a professional adviser.
Jersey does not otherwise levy taxes upon capital, inheritances, capital gains or gifts nor are there otherwise estate duties.
Goods and Services Tax
Pursuant to the Goods and Services Tax (Jersey) Law 2007 (“GST Law”), a tax rate which is currently 5% applies to the supply of goods and services, unless the supply is regarded as exempt or zero rated, or the relevant supplier or recipient of such goods and services is registered as an “international services entity.”
A company must register for GST if its turnover is greater than £300,000 in any 12 month period, and will then need to charge GST to its customers. Companies can also choose to register voluntarily.
A company may apply to be registered as an International Services Entity (“ISE”) if it mainly serves non-Jersey residents. By virtue of a company being an ISE, it will not have to register for GST, will not charge GST on its supplies, and will not be charged GST on its purchases.
The Company will be an ISE within the meaning of the GST Law, as it satisfies the requirements of the Goods and Services Tax (International Services Entities) (Jersey) Regulations 2008, as amended. As long as it continues to be such an entity, a supply of goods or of a service made by or to Clarivate shall not be a taxable supply for the purposes of the GST Law.
Substance Legislation
With effect from January 1, 2019, Jersey has implemented legislation to meet EU demands for companies to have substance in certain circumstances. Broadly, part of the legislation is intended to apply to holding companies managed and controlled in Jersey. It is not intended that Clarivate be managed and controlled in Jersey but rather that it is only tax resident in the United Kingdom and so this legislation will not apply to Clarivate on this basis.
The summary of certain Jersey tax issues is based on the laws and regulations in force as of the date of this document and may be subject to any changes in Jersey laws occurring after such date. Legal advice should be taken with regard to individual circumstances. Any person who is in any doubt as to his/her tax position or where he/she is resident, or otherwise subject to taxation, in a jurisdiction other than the United States, the UK and Jersey, should consult his/her professional adviser.
Certain United Kingdom Tax Considerations
The following statements are of a general nature and do not purport to be a complete analysis of all potential UK tax consequences of acquiring, holding, and disposing of Clarivate’s ordinary shares. They are based on current UK tax law and on the current published practice of Her Majesty’s Revenue and Customs (“HMRC”) (which may not be binding on HMRC), as of the date of this proxy statement/​prospectus, all of which are subject to change, possibly with retrospective effect. They are intended to address only certain United Kingdom tax consequences for holders of Clarivate’s ordinary shares who are tax resident in (and only in) the United Kingdom, and in the case of individuals, domiciled in (and only in) the United Kingdom (except where expressly stated otherwise) who are the absolute beneficial owners of Clarivate’s ordinary shares and any dividends paid on them and who hold Clarivate’s ordinary shares as
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investments (other than in an individual savings account or a self-invested personal pension). They do not address the UK tax consequences which may be relevant to certain classes of holders of Clarivate’s ordinary shares such as traders, brokers, dealers, banks, financial institutions, insurance companies, investment companies, collective investment schemes, tax-exempt organizations, trustees, persons connected with the Company or any member of a group of which the Company forms part, persons holding their ordinary shares as part of hedging or conversion transactions, shareholders who have (or are deemed to have) acquired their ordinary shares by virtue of an office or employment, and shareholders who are or have been officers or employees of the Company or a company forming part of a group of which the Company forms part. The statements do not apply to any shareholder who either directly or indirectly holds or controls 10% or more of the Company’s share capital (or class thereof), voting power or profits.
The following is intended only as a general guide and is not intended to be, nor should it be considered to be, legal or tax advice to any particular prospective subscriber for, or purchaser of, Clarivate’s ordinary shares.
Accordingly, prospective subscribers for, or purchasers of, Clarivate’s ordinary shares who are in any doubt as to their tax position regarding the acquisition, ownership or disposition of Clarivate’s ordinary shares or who are subject to tax in a jurisdiction other than the United Kingdom should consult their own tax advisers.
The Company
It is the intention of the directors of Clarivate to conduct the affairs of Clarivate so that the central management and control of Clarivate is exercised in the United Kingdom for UK tax purposes. As a result, Clarivate is expected to conduct its affairs so that it is treated as resident in the United Kingdom for UK tax purposes. Accordingly, Clarivate is expected to be subject to UK tax on its worldwide income and gains, except where an exemption or relief applies.
It is not intended that Clarivate will be treated as a dual resident company for UK tax purposes, however, if it were to be so treated, Clarivate’s right to claim certain reliefs from UK tax may be restricted, and changes in law or practice in the United Kingdom could result in the imposition of further restrictions on Clarivate’s right to claim UK tax reliefs.
Taxation of dividends
Withholding tax
Clarivate will not be required to withhold UK tax at source when paying dividends. The amount of any liability to UK tax on dividends paid by Clarivate will depend on the individual circumstances of a holder of our ordinary shares.
Income tax
An individual holder of Clarivate’s ordinary shares who is resident for tax purposes in the United Kingdom may, depending on his or her particular circumstances, be subject to UK tax on dividends received from Clarivate. An individual holder of Clarivate’s ordinary shares who is not resident for tax purposes in the United Kingdom should not be chargeable to UK income tax on dividends received from Clarivate unless he or she carries on (whether solely or in partnership) any trade, profession, or vocation in the United Kingdom through a branch or agency to which our ordinary shares are attributable. There are certain exceptions for trading in the United Kingdom through independent agents, such as some brokers and investment managers.
All dividends received by a UK resident individual holder of Clarivate’s ordinary shares from Clarivate or from other sources will form part of that shareholder’s total income for income tax purposes and will constitute the top slice of that income. A nil rate of income tax will apply to the first £2,000 of taxable dividend income received by a holder of Clarivate’s ordinary shares in a tax year. Income within the nil rate band will be taken into account in determining whether income in excess of the nil rate band falls within the basic rate, higher rate or additional rate tax bands. Where the dividend income is above the £2,000 dividend
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allowance, the first £2,000 of the dividend income will be charged at the nil rate and any excess amount will be taxed at 7.5%, to the extent that the excess amount falls within the basic rate tax band, 32.5%, to the extent that the excess amount falls within the higher rate tax band or 38.1%, to the extent that the excess amount falls within the additional rate tax band.
Corporation tax
Corporate holders of Clarivate’s ordinary shares which are resident for tax purposes in the United Kingdom, or which are not so resident in the United Kingdom by which are carrying on a trade in the United Kingdom through a permanent establishment in connection with which Clarivate’s ordinary shares are used or held, should not be subject to UK corporation tax on any dividend received from the Company so long as the dividends qualify for exemption (as is likely) and certain conditions are met (including anti-avoidance conditions). Corporate holders of Clarivate’s ordinary shares which are not resident in the United Kingdom and which are not carrying on a trade in the United Kingdom through a permanent establishment in connection with which Clarivate’s ordinary shares are used or held or acquired will not generally be subject to UK corporation tax on dividends.
A holder of Clarivate’s ordinary shares who is resident outside the United Kingdom may be subject to non-UK taxation on dividend income under local law.
Taxation of Capital Gains
UK resident shareholders
A disposal or deemed disposal of Clarivate’s ordinary shares by an individual or corporate holder of Clarivate’s ordinary shares who is tax resident in the United Kingdom may, depending on that shareholder’s circumstances and subject to any available exemptions or reliefs, give rise to a chargeable gain or allowable loss for the purposes of UK taxation of chargeable gains.
Any chargeable gain (or allowable loss) will generally be calculated by reference to the consideration received for the disposal of Clarivate’s ordinary shares less the allowable cost to the shareholder of acquiring such ordinary shares.
The applicable tax rates for individual holders of Clarivate’s ordinary shares realizing a gain on the disposal of such shares is, broadly, 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers. For corporate holders, any chargeable gain on the disposal of such shares will be subject to corporation tax at a rate of 19% for the tax years starting April 1, 2018 and April 1, 2019, falling to 17% for the tax year starting April 1, 2020.
Non-UK shareholders
Holders of Clarivate’s ordinary shares who are not resident in the United Kingdom and, in the case of an individual shareholder, not temporarily non-resident, should not be liable for UK tax on capital gains realized on a sale or other disposal of Clarivate’s ordinary shares unless (i) such ordinary shares are used, held or acquired for the purposes of a trade, profession or vocation carried on in the United Kingdom through a branch or agency or, in the case of a corporate holder of Clarivate’s ordinary shares used, held, or acquired for the purposes of a trade carried on in the United Kingdom through a permanent establishment or (ii) based on current draft legislation, in respect of disposals made on or after April 6, 2019, the Company derives 75% or more of its gross asset value from UK land. Holders of Clarivate’s ordinary shares who are not resident in the United Kingdom may be subject to non-UK taxation on any gain under local law.
Generally, an individual holder of Clarivate’s ordinary shares who has ceased to be resident in the United Kingdom for UK tax purposes for a period of five years or less and who disposes of Clarivate’s ordinary shares during that period may be liable on their return to the United Kingdom to UK taxation on any capital gain realized (subject to any available exemption or relief).
UK Stamp Duty (“stamp duty”) and UK Stamp Duty Reserve Tax (“SDRT”)
The statements in this section are intended as a general guide to the current position relating to stamp duty and SDRT and apply to any holders of Clarivate’s ordinary shares irrespective of their place of tax
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residence. Certain categories of person, including intermediaries, brokers, dealers, and persons connected with depositary receipt arrangements and clearance services, may not be liable to stamp duty or SDRT or may be liable at a higher rate or may, although not primarily liable for the tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986.
No stamp duty or SDRT will be payable on the issue of Clarivate’s ordinary shares, subject to the comments below.
Stamp duty will in principle be payable on any instrument of transfer of Clarivate’s ordinary shares that is executed in the United Kingdom or that relates to any property situated, or to any matter or thing done or to be done, in the United Kingdom. An exemption from stamp duty is available on an instrument transferring Clarivate’s ordinary shares where the amount or value of the consideration is £1,000 or less and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. Holders of Clarivate’s ordinary shares should be aware that, even where an instrument of transfer is in principle subject to stamp duty, stamp duty is not required to be paid unless it is necessary to rely on the instrument for legal purposes, for example to register a change of ownership or in litigation in a UK court.
Provided that Clarivate’s ordinary shares are not registered in any register maintained in the United Kingdom by or on behalf of us and are not paired with any shares issued by a UK incorporated company, any agreement to transfer Clarivate’s ordinary shares will not be subject to SDRT. Clarivate currently does not intend that any register of its ordinary shares will be maintained in the United Kingdom.
If Clarivate’s ordinary shares were to be registered in a register maintained in the United Kingdom by or on behalf of us or paired with any shares issued by a UK incorporated company then, where Clarivate’s ordinary shares are transferred or issued to, or to a nominee or agent for, a person whose business is or includes the provision of clearance services or issuing depositary receipts (but not including CREST), SDRT may be payable at a rate of 1.5% of the amount or value of the consideration payable for (or, in certain circumstances, the value of) Clarivate’s ordinary shares. This liability for SDRT will strictly be accountable by the clearance service or depositary receipt system, as the case may be, but will, in practice, generally be reimbursed by participants in the clearance service or depositary receipt system.
Anticipated Accounting Treatment
The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill will be treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of Clarivate issuing ordinary shares for the net assets of Churchill, accompanied by a recapitalization.
Regulatory Matters
The Transactions are not subject to any federal or state regulatory requirement or approval, except for the filings with the State of Delaware and Jersey, Channel Islands necessary to effectuate the Transactions.
Required Vote
The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Churchill common stock entitled to vote at the meeting. Additionally, the business combination will not be consummated if Churchill has less than $5,000,001 of net tangible assets after taking into account the holders of public shares that properly demanded that Churchill redeem their public shares for their pro rata share of the trust account. Further, the Merger Agreement provides that the Company is not required to consummate the Transactions if immediately prior to the consummation of the Transactions, Churchill does not have at least $550,000,000 of Available Cash. If the Company does not waive its termination right and Churchill has less than the required amount in trust, the Transactions will not be consummated.
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The approval of the business combination proposal is a condition to the consummation of the business combination. If the business combination proposal is not approved, the other proposals (except an adjournment proposal, as described below) will not be presented to the stockholders for a vote.
THE CHURCHILL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE CHURCHILL STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.
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THE MERGER AGREEMENT
For a discussion of the merger structure and merger consideration provisions of the Merger Agreement, see the section entitled “ The Business Combination Proposal .” Such discussion and the following summary of other material provisions of the Merger Agreement is qualified by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/​prospectus. All stockholders are encouraged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the business combination.
Closing and Effective Time of the Transactions
The closing of the Transactions will take place promptly following the satisfaction of the conditions described below under the subsection entitled “— Conditions to Closing of the Transactions ,” unless Churchill and the Company agree in writing to another time or unless the Merger Agreement is terminated. The Transactions are expected to be consummated promptly after the special meeting of Churchill’s stockholders described in this proxy statement/prospectus.
Representations and Warranties
The Merger Agreement contains representations and warranties of the Company relating, among other things, to:

proper organization;

subsidiaries;

the authorization, performance and enforceability of the Merger Agreement;

no conflict;

consent, approval or authorization of governmental authorities;

current capitalization;

financial statements;

absence of undisclosed liabilities;

litigation and proceedings;

compliance with laws;

intellectual property matters;

contracts;

benefit plans;

labor matters;

tax matters;

brokers’ fees;

insurance;

assets and property;

environmental matters;

absence of certain changes or events;

transactions with affiliates;

internal controls;

permits; and

the proxy statement.
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The Merger Agreement contains representations and warranties of Clarivate, Jersey Merger Sub and Delaware Merger Sub relating, among other things, to:

proper organization;

the authorization, performance and enforceability of the Merger Agreement;

no conflict;

governmental authorities and consents;

litigation and proceedings;

capitalization;

business activities;

the proxy statement; and

brokers’ fees.
The Merger Agreement contains representations and warranties of Churchill relating, among other things, to:

proper organization;

the authorization, performance and enforceability of the Merger Agreement;

no conflict;

litigation and proceedings;

governmental authorities and consents;

financial ability and trust account;

brokers’ fees

SEC reports, financial statements and Sarbanes-Oxley Act;

business activities;

the proxy statement;

no outside reliance;

tax matters;

capitalization; and

NYSE listing.
Covenants
The parties have each agreed to use commercially reasonable efforts to obtain any required consents and approvals and to take such other actions as may be reasonably necessary to consummate the Transactions. Churchill and the Company have each also agreed to continue to operate their respective businesses in the ordinary course prior to the closing of the Transactions. The Company and Clarivate have agreed that, unless otherwise required or permitted under the Merger Agreement, and subject to certain disclosed exceptions, neither the Company nor its subsidiaries will take the following actions during the interim period between signing of the Merger Agreement and closing of the Transactions, among others, without the prior written consent of Churchill (which consent will not be unreasonably conditioned, withheld, delayed or denied):

change or amend its certificate of incorporation, bylaws or other organizational documents;

make, declare or pay any dividend or distribution to the stockholders of the Company in their capacities as stockholders;
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effect any recapitalization, reclassification, split or other change in its capitalization;

except for the issuance of up to 50,000 options to purchase ordinary shares of the Company under the Company’s 2016 Equity Incentive Plan (the “Company Stock Plan”), authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or deliver any additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue, sell, transfer, pledge, encumber or grant any right, option or other commitment for the issuance of shares of its capital stock, or split, combine or reclassify any shares of its capital stock;

except pursuant to the Company Stock Plan, repurchase, redeem or otherwise acquire or offer to repurchase redeem or otherwise acquire any shares of capital stock or other equity interests;

enter into, assume, assign, partially or completely amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms) any material contract, any lease related to the material leased real property or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) other than such agreements in the ordinary course consistent with past practice;

subject to certain exceptions, sell, transfer, lease, pledge or otherwise encumber, abandon, cancel or convey or dispose of any material assets, properties or business;

except as otherwise required by law or existing company benefit plans, policies or contracts of the Company or its subsidiaries in effect on the date of the Merger Agreement, (i) grant any material increase in compensation, benefits or severance to any employee, except in the ordinary course of business consistent with past practice with an annual base salary compensation less than $300,000 or for ordinary course annual salary increases for 2019 for all employees that do not exceed, in the aggregate, 4% of the aggregate salary paid by the Company and its subsidiaries in the calendar year 2018, (ii) except in the ordinary course of business, adopt, enter into or materially amend any company benefit plan (other than the Company Stock Plan and awards thereunder), (iii) grant or provide any severance or termination payments or benefits to any employee, except in connection with the hiring or firing of any employee in the ordinary course of business consistent with past practice, or (iv) hire any employee or any other individual who is providing or will provide services to the Company or its subsidiaries other than any employee with an annual base salary below $300,000 in the ordinary course of business consistent with past practice;

fail to maintain its existence;

acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material portion of assets, securities, properties, or businesses;

adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its subsidiaries;

make any capital expenditures (or commitment to make any capital expenditures) that in the aggregate exceed $2,000,000, other than any capital expenditures consistent in all material respects with the Company’s annual capital expenditure budget;

make any loans or advances to any third-party, except any made in the ordinary course of business consistent with past practice;

make or change any material tax election or adopt or change any material tax accounting method, file any amendment to a material tax return, enter into any agreement with a governmental authority with respect to taxes, settle or compromise any claim or assessment in respect of material taxes, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of taxes, or take or fail to take any similar action that could have the effect of materially increasing the present or future tax liability or materially decreasing any present or future tax asset of Clarivate and its Affiliates in a manner that will disproportionately affect Churchill’s stockholders (as compared to the Company Owners) after the closing of the Transactions;
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take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the intended tax treatment of the Transactions;

enter into any agreement that restricts the ability to engage or compete in any line of business, or enter into any agreement that restricts the ability to enter a new line of business;

enter into, renew or amend in any material respect any agreement with an affiliate;

waive, release, compromise, settle or satisfy any pending or threatened material claim or compromise or settle any material liability, other than in the ordinary course of business or that does not exceed $2,500,000 in the aggregate (net of insurance recoveries);

incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, other than in connection with borrowings, extensions of credit and other financial accommodations under the Company’s existing Credit Facilities, provided, that, in no event shall any such borrowing, extension of credit or other financial accommodation be subject to any prepayment fee or penalty or similar arrangement or amend, restate or modify any terms of or any agreement with respect to any outstanding indebtedness, other than as set forth in the Merger Agreement;

make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations, except insofar as may have been required by a change in U.S. GAAP;

voluntarily fail to maintain, cancel or materially change coverage under any insurance policy in form and amount equivalent in all material respects to the insurance coverage currently maintained with respect to the Company and its subsidiaries and their assets and properties; and

enter into any agreement to do any of the foregoing.
The Merger Agreement also contains additional covenants of the parties, including among other things covenants providing for:

the protection of confidential information of the parties and, subject to the confidentiality requirements, the provision of reasonable access to information;

the parties to prepare and file this proxy statement/prospectus and to solicit proxies from the Churchill stockholders to vote on the proposals that will be presented for consideration at the special meeting;

customary indemnification of, and provision of insurance with respect to, former and current officers and directors of Churchill and the Company; and

each party to use commercially reasonable efforts to effect the intended tax treatment of the Transactions.
Conditions to Closing of the Transactions
General Conditions
Consummation of the Transactions is conditioned on the approval of the business combination proposal and the charter proposals as described in this proxy statement/prospectus.
In addition, the consummation of the Transactions contemplated by the Merger Agreement is conditioned upon, among other things:

the early termination or expiration of the waiting period under the Hart-Scott-Rodino Act (which has already been obtained);

no order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority or statute, rule or regulation that is in effect and prohibits or enjoins the consummation of the Transactions;
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the redemption offer for shares of Churchill common stock shall have been completed;

Churchill having at least $5,000,001 of net tangible assets remaining after the closing;

the memorandum of association and articles of association of Clarivate shall have been amended and restated in their entirety in the form attached to the Merger Agreement;

this proxy statement/prospectus shall have become effective, no stop order shall have been issued that remains in effect and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC which remains pending;

the delivery by each party to the other party of a certificate with respect to the truth and accuracy of such party’s representations and warranties as of execution of the merger agreement and as of the closing as well as the performance by such party of covenants contained in the merger agreement required to by complied with by such party prior to the closing; and

the approval for listing by the NYSE of the shares to be issued in connection with the business combination.
Churchill’s Conditions to Closing
The obligations of Churchill to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of the Company, Clarivate, Jersey Merger Sub and Delaware Merger Sub (subject to customary bring-down standards);

the covenants of the Company, Clarivate, Jersey Merger Sub and Delaware Merger Sub have been performed in all material respects;

the delivery by Clarivate of an executed Director Nomination Agreement; and

the delivery by Clarivate of an executed Registrations Rights Agreement.
The Company’s Conditions to Closing
The obligations of the Company, Clarivate, Delaware Merger Sub and Jersey Merger Sub to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of Churchill (subject to customary bring-down standards);

the covenants of Churchill have been performed in all material respects;

there is at least $550,000,000 of Available Cash; and

the covenants of the sponsor, the founders and Garden State under the Sponsor Agreement shall have been performed in all material respects, and no such person shall have threatened (i) that the Sponsor Agreement is not valid, binding and in full force and effect, (ii) that Clarivate or the Company is in breach of or default under the Sponsor Agreement or (iii) to terminate the Sponsor Agreement.
Waiver
Any party to the Merger Agreement may, at any time prior to the closing of the Transactions, by action taken by its board of directors, or officers thereunto duly authorized, waive any of the terms or conditions of the Merger Agreement. Notwithstanding the foregoing, pursuant to Churchill’s current amended and restated certificate of incorporation, Churchill cannot consummate the proposed business combination if it has less than $5,000,001 of net tangible assets remaining after the closing.
The existence of the financial and personal interests of the directors may result in a conflict of interest on the part of one or more of them between what he may believe is best for Churchill and what he may believe is best for himself in determining whether or not to grant a waiver in a specific situation.
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Termination
The Merger Agreement may be terminated at any time, but not later than the closing of the Transactions, as follows:

by mutual written consent of Churchill and the Company;

by either Churchill or the Company if the transactions are not consummated on or before July 31, 2019;

by either Churchill or the Company if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Mergers, which order, decree, judgment, ruling or other action is final and nonappealable;

by either Churchill or the Company if the other party has breached any of its covenants or representations and warranties in any material respect which would cause the conditions to closing of the Transactions not to be satisfied and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party is itself not in breach;

by either Churchill or the Company if, at the Churchill stockholder meeting, the Transactions shall fail to be approved by holders of Churchill’s outstanding shares (subject to any adjournment or recess of the meeting); or

by Churchill if, within two days from the date of the Merger Agreement, (i) the shareholder approval of each of the Company and Jersey Merger Sub to the Jersey Merger is not obtained or (ii) the adoption of the Merger Agreement by Clarivate in its capacity as the sole stockholder of Delaware Merger Sub is not obtained. Each of the requirements set forth in the foregoing clauses (i) and (ii) was satisfied prior to the date that was two days after the date of the Merger Agreement and, therefore, Churchill may not terminate the Merger Agreement as described in this bullet point.
Effect of Termination
In the event of proper termination by either Churchill or the Company, the Merger Agreement will become void and have no effect (other than with respect to certain surviving obligations specified in the Merger Agreement), without any liability on the part of any party thereto or its respective affiliates, officers, directors, employees or stockholders, other than liability of any party thereto for any intentional and willful breach of the Merger Agreement by such party occurring prior to such termination.
Fees and Expenses
Except as provided for in the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the Transactions contemplated thereby will be paid by the party incurring such expenses whether or not the Transactions are consummated.
Amendments
The Merger Agreement may be amended by the parties thereto at any time by execution of an instrument in writing signed on behalf of each of the parties. Churchill would file a Current Report on Form 8-K and issue a press release to disclose any amendment to the Merger Agreement entered into by the parties. If such amendment is material to investors, a proxy statement supplement would also be sent to holders of Churchill common stock as promptly as practicable.
Governing Law; Consent to Jurisdiction
The Merger Agreement is governed by the laws of the State of Delaware, except that the Jersey Merger shall be governed by the Jersey Companies Law. The parties to the Merger Agreement have irrevocably submitted to the exclusive jurisdiction of federal and state courts the State of Delaware.
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THE CHARTER PROPOSALS
The charter proposals, if approved, will approve the following material differences between the constitutional documents of Clarivate that will be in effect upon the closing of the Transactions and Churchill’s current amended and restated certificate of incorporation:

the name of the new public entity will be “Clarivate Analytics Plc” as opposed to “Churchill Capital Corp”;

Clarivate will have no limit on the number of shares which Clarivate is authorized to issue, as opposed to Churchill having 220,000,000 authorized shares of common stock and 1,000,000 authorized shares of preferred stock; and

Clarivate’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that Churchill’s amended and restated certificate of incorporation contains.
This vote, however, will not actually result in stockholders of Churchill approving Clarivate’s constitutional documents or amendments to Churchill’s corporate governing documents but instead will simply approve the aforementioned material differences in the two sets of documents.
In the judgment of Churchill’s board of directors, the charter proposals are desirable for the following reasons:

The name of the new public entity is desirable to reflect the business combination with the Company and the combined business going forward.

The unlimited number of shares of capital stock is desirable for Clarivate to have sufficient shares to issue to the holders of common stock and warrants of Churchill and the Company Owners to complete the business combination and have additional authorized shares for financing their businesses, for acquiring other businesses, for forming strategic partnerships and alliances and for stock dividends and stock splits.

The provisions that relate to the operation of Churchill as a blank check company prior to the consummation of its initial business combination and would not be applicable to Clarivate (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time).
Notwithstanding the foregoing, the unlimited number of authorized but unissued ordinary shares may enable Clarivate’s board of directors to render it more difficult or to discourage an attempt to obtain control of Clarivate and thereby protect continuity of or entrench its management, which may adversely affect the market price of Clarivate’s securities. If, in the due exercise of its fiduciary obligations, for example, Clarivate’s board of directors were to determine that a takeover proposal were not in the best interests of Clarivate, such shares could be issued by the board of directors without shareholder approval in one or more private placements or other transactions that might prevent or render more difficult or make more costly the completion of any attempted takeover transaction by diluting voting or other rights of the proposed acquirer or insurgent stockholder group, by creating a substantial voting block in institutional or other hands that might support the position of the incumbent board of directors, by effect effecting an acquisition that might complicate or preclude the takeover, or otherwise. The unlimited number of additional authorized shares will, however, enable Clarivate to have the flexibility to authorize the issuance of shares in the future for financing its business, for acquiring other businesses, for forming strategic partnerships and alliances and for stock dividends and stock splits. Clarivate currently has no such plans, proposals, or arrangements, written or otherwise, to issue any of the additional authorized shares for such purposes.
Vote Required
If the business combination proposal is not approved, the charter proposals will not be presented at the special meeting.
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The approval of each charter proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Churchill common stock on the record date.
Under the Merger Agreement, the approval of the charter proposals is a condition to the adoption of the business combination proposal and vice versa.
A copy of Clarivate’s constitutional documents, as will be in effect assuming approval of all of the charter proposals and upon consummation of the business combination and filing with the Jersey Financial Services Commission, is attached to this proxy statement/prospectus as Annex B .
CHURCHILL’S BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF EACH OF THE CHARTER PROPOSALS.
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INFORMATION ABOUT EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES
At the effective time of the business combination, in accordance with the terms of the Merger Agreement, the board of directors and executive officers of Clarivate will be as follows:
Name
Age
Position
Jay Nadler
54
Chief Executive Officer and Director
Richard Hanks
54
Chief Financial Officer
Stephen Hartman
49
General Counsel and Global Head of Corporate Development
Jerre Stead
75
Executive Chairman of the Board of Directors
Anthony Munk
59
Director Nominee
Balakrishnan S. Iyer
62
Director Nominee
Charles E. Moran
64
Director Nominee
Charles J. Neral
60
Director Nominee
Karen G. Mills
65
Director Nominee
Kosty Gilis
45
Director
Matthew Scattarella
37
Director Nominee
Martin Broughton
71
Director Nominee
Michael Klein
55
Director Nominee
Nicholas Macksey
39
Director Nominee
Amir Motamedi
38
Director Nominee
Sheryl von Blucher
57
Director Nominee
(1)
Member of the Audit Committee
(2)
Member of the Nominating Committee
(3)
Member of the Compensation Committee
(4)
Member of the Risk Committee
Jay Nadler has been Chief Executive Officer of the Company and a member of its the Company’s board since January 2017. Mr. Nadler previously served as a Board member of MLM Holdings, SNL Financial, and Intellectual Property Technology Exchange. Mr. Nadler served as an advisor to RS Energy Group from March 2016 to November 2016 and to iParadigms from August 2008 to July 2014. Mr. Nadler also served as Executive in Residence at Warburg Pincus from March 2016 to October 2016 where he advised the Technology, Media and Telecommunications group and the Industrials and Business Services group. Prior to that, Mr. Nadler held senior executive roles at several private equity-sponsored companies including Chief Operating Officer of Interactive Data Corporation from October 2010 to January 2016, President of MLM Information Services from September 2005 to October 2010, and multiple roles at Information Holdings Inc. (NYSE: IHI) from April 2000 to June 2005. From 1988 to 2000, Mr. Nadler served as a Senior Executive of Thomson Financial where he served as President of individual and multiple businesses in various markets including investment banking, investment management, investor relations, sales and trading, and wealth management. Mr. Nadler is a graduate of The Wharton School at the University of Pennsylvania, where he earned a Bachelor of Science degree in Economics. Mr. Nadler was selected to serve on the board of directors due to his significant experience as a senior executive in information services.
Richard Hanks has been the Chief Financial Officer of the Company since March 2017. Mr. Hanks served as Chief Financial Officer of BDP International from April 2013 to March 2017 and as Chief Financial Officer and an Executive Vice President of infoGROUP, Inc. from 2010 to 2013. Prior to that, Mr. Hanks served as Chief Operating Officer of Enterprise Media Group (EMG) of Dow Jones & Company Inc. from 2007 to 2010 and served as its Chief Commercial Officer and Senior Vice President of Financial & Enterprise Markets where he led the corporate and financial market verticals with
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responsibility for finance, sales, marketing and product strategy. From 1999 to 2006, Mr. Hanks served as Chief Financial Officer of Factiva, LLC. Prior to that, he served as Finance Director for the Corporate and Media Information Division of Reuters, Finance Director for the Financial Times Business Limited, Director of Operations Research and Internal Audit for SmithKline Beecham PLC and Senior Manager of Corporate Finance and Restructuring at PriceWaterhouseCoopers. Mr. Hanks is a Chartered Accountant and is a graduate of the University of Nottingham, where he earned a bachelor’s degree in Industrial Economics.
Stephen Hartman has been General Counsel and Global Head of Corporate Development of the Company since July 2014. Prior to that, Mr. Hartman served as Deputy General Counsel, TR Professional, General Counsel for Thomson Scientific and as Chief Counsel (EMEA) for Thomson Financial. Before joining Thomson Reuters in 2000, Mr. Hartman served as European counsel for Primark. Mr. Hartman is a graduate of the University of Nottingham.
Jerre Stead has been the Chief Executive Officer of Churchill and a member of its Board since August 2018. Mr. Stead served as Chairman and Chief Executive Officer of IHS Markit Ltd. (Nasdaq: INFO), a world leader in critical information, analytics and solutions, from its formation in 2016 through 2017 and as Executive Chairman of its predecessor company, IHS, Inc., from 2000 through 2016 and as both Chairman and Chief Executive Officer from 2015 through 2016 and from 2006 through 2013. Mr. Stead previously served as Co-Chief Executive Officer of DTN LLC, which provides services in relation to the delivery of weather, agricultural, energy and commodity market information from 2017 to 2018 and also previously served as its Executive Chairman. Mr. Stead previously served as Chairman and CEO of Ingram Micro from 1996 to 2000 and as Chairman and CEO of Legent Corporation in 1995. Mr. Stead has also previously served as Chairman and CEO of Honeywell-Phillips Medical Electronics, Chairman and CEO of Square D Company and Chairman and CEO of AT&T Global Information Solutions. Mr. Stead has served on over 30 corporate boards during his career and in 2017 received the B. Kenneth West Lifetime Achievement Award from the National Association of Corporate Directors. Mr. Stead is a graduate of the University of Iowa in Iowa City, Iowa, where he earned a bachelor’s degree in business administration, and of the Harvard University Advanced Management Program in Switzerland. Mr. Stead was selected to serve on the board of directors due to his significant experience leading and growing companies in information services.
Anthony Munk has been a member of the Company’s Board since October 2016. Mr. Munk is a Senior Managing Director at Onex. Since joining Onex in 1988, Mr. Munk has worked on numerous private equity transactions, including the acquisitions and realizations of Husky Injection Molding Systems Ltd., RSI Home Products, Tomkins plc, Vencap Equities Alberta Ltd., Imperial Parking Ltd., ProSource Inc., and Loews Cineplex; and the initial public offering of the Cineplex Galaxy Income Fund, which acquired the Canadian operations of Loews Cineplex, Cineplex Odeon, and the operations of Onex’ subsidiary, Galaxy Entertainment. More recently, Mr. Munk was involved in the acquisitions by Onex of Ryan LLC, Jeld-Wen Holdings Inc., Jack’s Family Restaurants and Moran Foods, LLC (“Save-A-Lot”). Mr. Munk also currently serves on the boards of directors of Ryan LLC, SMG, Save-A-Lot, and Jeld-Wen. Mr. Munk previously served on the board of directors of Barrick Gold Corporation, RSI Home Products, Husky Injection Molding Systems Ltd., Cineplex Inc., and Jack’s Family Restaurants. Prior to joining Onex, Mr. Munk was a Vice President with First Boston Corporation in London, England and an Analyst with Guardian Capital in Toronto. Mr. Munk is a graduate of Queen’s University, where he earned a bachelor’s degree in Economics. Mr. Munk was selected to serve on the board of directors due to his significant experience in a variety of strategic and financing transactions and investments.
Balakrishnan S. Iyer has been a member of Churchill’s Board since September 2018. Mr. Iyer has served as a Board member of IHS Markit Ltd. (previously IHS Inc.) since 2003. Mr. Iyer also has served on the Board of Directors of Skyworks Solutions Inc. since 2002 and Power Integrations, Inc. since 2004. Previously, Mr. Iyer was Senior Vice President and Chief Financial Officer of Conexant Systems, Inc. from 1998 to 2003. He held various leadership positions at VLSI Technology Inc., including Senior Vice President and Chief Financial Officer from 1997 to 1998 and Vice President, Corporate Controller from 1993 to 1997. Mr. Iyer served on the Board of Directors of Conexant Systems from 2002 to 2011, Life Technologies (and its predecessor Invitrogen) from 2001 to 2014 and QLogic Corporation from 2003 to 2016. Mr. Iyer holds a B.Tech in Mechanical Engineering from the Indian Institute of Technology, Madras,
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an MS in Industrial Engineering from the University of California, Berkeley and an MBA in Finance from the Wharton School of the University of Pennsylvania. Mr. Iyer was selected to serve on the board of directors due to his significant financial and corporate governance experience in information services.
Charles E. Moran is the founder and former President and Chief Executive Officer of Skillsoft Corporation, a leading global provider of cloud-based learning and talent management solutions. Mr. Moran held those positions from 1998 to 2015 and remained on as the Chairman from 2015 to 2016. From 1995 to 1997, Mr. Moran served as the President and Chief Executive Officer of NETg, a subsidiary of National Education Corporation, and a provider of computer-based training for IT professionals. From 1993 to 1994, he served as the Chief Operating Officer and Chief Financial Officer of SoftDesk, a leading architecture, engineering and construction/computer-aided design software application company, which was acquired by Autodesk. From 1992 to 1993, he served as the President of Sytron Corp, a data management software subsidiary of Rexon, Inc. From 1989 to 1992, he was Vice President of Sales and Marketing at Insite Peripherals, a manufacturer of floppy disk drives. Prior to joining Insite Peripherals, his experience included various business management positions with Archive Corporation, Florida Data, and Hamilton-Avnet Corporation. From 2009 to 2014, Mr. Moran served on the board of directors of Higher One, Inc., a leading payment technology provider for higher education. From 1997 to 2001, he served on the board of directors of Workgroup Technology, a client/server product data management solution. Mr. Moran has also served as a member of the board of directors of Manhattan Associates, Inc. since May 2017 and Commvault since July 2018. Mr. Moran holds a B.S. from Boston College and an MBA from Suffolk University. Mr. Moran was selected to serve on the board due to his significant business and leadership experience in information services.
Charles J. Neral has been a member of the Company’s Board since July 2017 and also serves on the Board of Directors of SAI Global. In 2016, he founded Neral Associates, LLC which provides advisory services to public and private clients. Prior to that, from July 2012 to January 2016, Mr. Neral served as the Senior Vice President and Chief Financial Officer of SunGard. He also served as the Senior Vice President and Chief Financial Officer of SafeNet from October 2009 to June 2012. From 1981 to 2009, Mr. Neral served in a variety of positions across IBM’s Sales, Server, Global Services and Software Business lines including executive roles in Asia Pacific, IBM Corporate Headquarters and ultimately serving as the Chief Financial Executive of IBM’s Software Segment (2004 to 2009). Mr. Neral holds a B.S. in Computer Science from Indiana University of Pennsylvania and an MBA in Finance from New York University. Mr. Neral was selected to serve on the board of directors due to his significant business and advisory experience.
Karen G. Mills has been a member of Churchill’s Board since September 2018. Ms. Mills is currently a Senior Fellow at Harvard Business School and Harvard Kennedy School, focusing on technology, U.S. competitiveness, and entrepreneurship. Ms. Mills was a member of President Barack Obama’s Cabinet, serving as the Administrator of the U.S. Small Business Administration from 2009 to 2013. She is President of MMP Group, which invests in financial services, consumer products and technology solutions businesses. Prior to this, Ms. Mills held leadership positions in the private sector, including as a partner in several private equity firms. Ms. Mills is Vice Chair of the immigration services company Envoy Global and a past director of Arrow Electronics and Scotts Miracle-Gro. She also serves as a co-chair of the Bipartisan Policy Center’s Main Street Finance Task Force and as a member of the Harvard Corporation. Ms. Mills holds an AB in economics from Harvard University and an MBA from Harvard Business School. Ms. Mills was selected to serve on the board of directors due to her significant experience in government, academia and investment.
Kosty Gilis has been a member of the Company’s board since October 2016 and Clarivate’s board since its formation in January 2019. Mr. Gilis is a Managing Director of Onex. Since joining Onex in 2004, Mr. Gilis has worked on numerous private equity transactions including the acquisitions and realizations of Allison Transmission and Tomkins plc, and more recently the acquisition of Emerald Expositions, WireCo Worldgroup and SMG. He currently also serves on the Board of Emerald Expositions Events, Inc. and previously served on the boards of Allison Transmission Holdings, Inc., Gates Global Inc. and WireCo Worldgroup Inc. Prior to joining Onex, Mr. Gilis was a Vice President at Willis Stein & Partners, a Chicago-based private equity firm and was a management consultant at Bain & Company in Toronto,
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Canada and Johannesburg, South Africa. Mr. Gilis is a graduate of The Wharton School of the University of Pennsylvania, where he earned a B.S. in Economics, and Harvard Business School, where he earned an MBA. Mr. Gilis was selected to serve on the board of directors due to his significant experience in a variety of financing transactions and investments.
Matthew Scattarella is a Principal with BPEA. Since joining BPEA in 2009, Mr. Scattarella has worked on numerous cross-border private equity transactions, including St. George’s University, Solera Holdings and Prometric Inc. Prior to joining BPEA, Mr. Scattarella worked with Golden Gate Capital and Bain & Company. Mr. Scattarella holds a Bachelor of Science in Economics and an MBA, both from the Wharton School at the University of Pennsylvania. Mr. Scattarella was selected to serve on the board due to his business and investment experience.
Sir Martin Broughton has been a member of Churchill’s Board since September 2018. Sir Martin is the Chairman of Supponer, a company specializing in augmented digital reality technologies for real-time broadcasting of sporting events and streaming of in-venue advertising, which he joined in 2019. Sir Martin served as Deputy Chairman of International Consolidated Airlines Group from 2011 to 2016 as well as Chairman of British Airways from 2004 to 2013. He joined Sports Investment Partners in 2010, and currently serves as Chairman of Sports Investment Partners. He served as Chairman of British American Tobacco Company from 1997 to 2004 after having served in various roles at the company since 1971. Sir Martin was Chairman of Liverpool Football Club in 2010 and also served as President of the Confederation of British Industry from 2008 to 2010. Sir Martin was selected to serve on the board due to his significant business, investment and leadership experience.
Michael Klein has been Churchill’s Chairman since August 2018. Mr. Klein currently serves as a Director for Credit Suisse Group AG and Credit Suisse AG. Mr. Klein is the founder and managing partner of M. Klein and Company, which he founded in 2012. M. Klein and Company is a global strategic advisory firm that provides its clients a variety of advice tailored to their objectives. Mr. Klein is a strategic advisor to global companies, boards of directors, senior executives, governments and institutional investors. Mr. Klein’s background in strategic advisory work was built during his 30-year career, including more than two decades at Citi and its predecessors, during which he initiated and executed strategic advisory transactions. He began his career as an investment banker in the M&A Advisory Group at Salomon Smith Barney and subsequently became Chairman and Co-Chief Executive Officer of Citi Markets and Banking, with responsibilities for global corporate and investment banking and Global Transaction Services across Citi. Mr. Klein is a graduate of The Wharton School of the University of Pennsylvania, where he earned his Bachelors of Science in Economics with concentrations in finance and accounting. Mr. Klein was selected to serve on the board of directors due to his significant investment banking and advisory experience, including for companies in information services.
Nicholas Macksey has been a member of the Company’s Board since October 2016. Mr. Macksey is a Managing Director of BPEA. Since joining BPEA in 2006, Mr. Macksey has worked on numerous private equity transactions. These transactions include Courts Asia Limited, Nord Anglia Education Inc., Vistra Group Limited, SAI Global Limited, Giant Interactive Group Inc. Prior to joining Baring Mr. Macksey was a Senior Associate at Westpac Institutional Bank. Mr. Macksey graduated with a Bachelor of Commerce and a Bachelor of Economics from the University of Queensland and is also a CFA charter holder. Mr. Macksey was selected to serve on the board due to his significant investment and business services experience.
Amir Motamedi has been a member of the Company’s board since October 2016. Mr. Motamedi is a Managing Director of Onex. Since joining Onex in 2007, Mr. Motamedi has worked on numerous business services transactions including BBAM, Advanced Integration Technology, Emerald Expositions, SMG, and Ryan LLC. He currently serves on the boards of Emerald Expositions, SMG, and Ryan LLC and previously served on the board of BBAM. Prior to joining Onex, Mr. Motamedi was an analyst at Goldman Sachs. Mr. Motamedi is a graduate of McGill University where he earned bachelor of arts and bachelor of commerce degrees. Mr. Motamedi was selected to serve on the board of directors due to his significant experience in a variety of business services transactions.
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Sheryl von Blucher has been Churchill’s Chief Operations Officer and a member of its Board since August 2018. Ms. von Blucher has over 30 years of experience in a variety of roles in the global integrated energy, information services, technology services and software, and public and non-profit sectors. She has led strategic and portfolio planning, operations, and corporate finance and development for both domestic and international organizations. Ms. von Blucher served as Co-Chief Executive Officer of DTN LLC from 2017 to 2018. Prior to this, she joined IHS in 2000 as Senior Vice President of Planning and Corporate Development, and then served as an Advisor to the Chairman & CEO of the company from 2007 through 2017. Ms. von Blucher has also worked in private-equity portfolio management as a partner and managing director for the JMJS Group, a private equity partnership. Ms. von Blucher currently serves on the Board of Directors of Washington Prime Group, Inc; Capital Canyon Club and Golf Development LLC; and on the Board of Trustees for the not-for-profits Guideposts; IWF, a museum and designated U.S. National Historic Site; and UAHT, United Against Human Trafficking. Ms. von Blucher holds a bachelor’s degree from Rice University and a master’s degree from Harvard University. Ms. von Blucher was selected to serve on the board of directors due to her significant experience as a senior executive in information services.
Board Designees
The parties to the Merger Agreement agreed that the initial board would be comprised of the 14 persons set forth above.
Family Relationships
There are no family relationships between any of Clarivate’s executive officers and directors or director nominees.
Independence of Directors
As a result of its ordinary shares being listed on the NYSE following consummation of the business combination, Clarivate will adhere to the rules of such exchange in determining whether a director is independent. The board of directors of Clarivate has consulted, and will consult, with its counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The NYSE listing standards generally define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The parties have determined that            ,            ,            ,            ,             and             will be considered independent directors. Clarivate’s independent directors will have regularly scheduled meetings at which only independent directors are present.
Controlled Company Status
For purposes of NYSE rules, Clarivate will be a “controlled company” after completion of the Transactions. Controlled companies under those rules are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Upon completion of the Transaction, Onex and Baring will continue to control more than 50% of the voting power of Clarivate’s ordinary shares and will have certain director nomination rights. For more information relating to Onex’s and Baring’s respective director nomination rights, see the section entitled “ The Business Combination Proposal Related Agreements Amended and Restated Shareholders Agreement ”. Accordingly, it is anticipated that Clarivate will be eligible to, and the parties intend to, take advantage of certain exemptions from corporate governance requirements provided in the NYSE rules. Specifically, as a controlled company, Clarivate will not be required to have (1) a majority of independent directors, (2) a nominating and corporate governance committee composed entirely of independent directors, (3) a compensation committee composed entirely of independent directors or (4) an annual performance evaluation of the Nominating and corporate governance committee and compensation committee. Therefore, following consummation of the Transactions, Clarivate may not have a majority of independent directors, its compensation, nominating and corporate governance committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations.
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Accordingly, you will not have the same protections afforded to shareholders of listed companies that are subject to all of the applicable corporate governance requirements. In the event that Clarivate ceases to be a controlled company, it will be required to comply with those requirements within specified transition periods.
The controlled company exemption does not modify the independence requirements for the audit committee, and Clarivate intends to comply with the requirements of the NYSE rules with respect thereto.
Risk Committee Information and Risk Oversight
Effective upon consummation of the business combination, the board of directors of Clarivate will establish a risk committee. It is expected that the risk committee will initially consist of            . The risk committee will have a written charter. The purpose of the risk committee will be to assist the board of directors in overseeing the risk management activities designed and implemented by Clarivate’s management. Clarivate’s risk committee and board of directors will also consider specific risk topics, including risks associated with Clarivate’s strategic initiatives, business plans and capital structure. Clarivate’s management, including its executive officers, is primarily responsible for managing the risks associated with operation and business of the company and will provide appropriate updates to the board of directors and the audit committee. Clarivate’s board of directors will delegate to the audit committee oversight of its risk management process, and Clarivate’s other committees will also consider risk as they perform their respective committee responsibilities. All committees will report to the board of directors as appropriate, including when a matter rises to the level of material or enterprise risk.
Meetings and Committees of the Board of Directors
Upon consummation of the business combination, Clarivate will establish a separately standing audit committee, corporate governance and nominating committee and compensation committee.
Audit Committee Information
Effective upon consummation of the business combination, Clarivate will establish an audit committee comprised of independent directors. It is expected that the audit committee will initially consist of            . Each of the member of the audit committee will be independent under the applicable listing standards. The audit committee will have a written charter. The purpose of the audit committee will be, among other things, to appoint, retain, set compensation of, and supervise Clarivate’s independent accountants, review the results and scope of the audit and other accounting related services and review Clarivate’s accounting practices and systems of internal accounting and disclosure controls.
Financial Experts on Audit Committee
The audit committee will at all times be composed exclusively of  “independent directors,” as defined for audit committee members under the NYSE listing standards and the rules and regulations of the SEC, who are “financially literate.” “Financially literate” generally means being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, Clarivate will be required to certify to the exchange that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
            will serve as a financial expert on the audit committee.
Corporate Governance and Nominating Committee Information
Effective upon consummation of the business combination, Clarivate will establish a corporate governance and nominating committee of the board of directors comprised of            . The corporate governance and nominating committee will have a written charter. The corporate governance and nominating committee will be responsible for overseeing the selection of persons to be nominated to serve on Clarivate’s board of directors.
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Guidelines for Selecting Director Nominees
The corporate governance and nominating committee will consider persons identified by its members, management, stockholders, investment bankers and others. The guidelines for selecting nominees, which are specified in the corporate governance and nominating committee charter, generally provide that persons to be nominated:

should have demonstrated notable or significant achievements in business, education or public service;

should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.
The corporate governance and nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The corporate governance and nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The corporate governance and nominating committee will not distinguish among nominees recommended by stockholders and other persons.
Compensation Committee Information
Effective upon consummation of the business combination, the board of directors of Clarivate will establish a compensation committee. It is expected that the compensation committee will initially consist of       . The compensation committee will have a written charter. The purpose of the compensation committee will be to review and approve compensation paid to Clarivate’s officers and directors and to administer Clarivate’s incentive compensation plans, including authority to make and modify awards under such plans.
Any award made pursuant to an individual subject to the requirements of Section 16 of the Exchange Act must consist of a committee of two or more members of the board who are “nonemployee directors” as defined in Rule 16b-3(d)(1) under the Exchange Act.
Code of Ethics
Clarivate will adopt a Code of Ethics that applies to all of its employees, officers, and directors. This includes Clarivate’s principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. The full text of Clarivate’s Code of Ethics will be posted on its website at https://www.clarivate.com/terms-of-business. Clarivate intends to disclose on its website any future amendments of the Code of Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or Clarivate’s directors from provisions in the Code of Ethics.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation committee is currently, or has been at any time, one of Clarivate’s officers or employees. None of Clarivate’s executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of Clarivate’s board of directors or compensation committee.
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Shareholder and Interested Party Communications
Prior to the Transactions, Clarivate’s board of directors did not provide a process for shareholders or other interested parties to send communications to the board of directors because management believed that it was premature to develop such processes given the limited liquidity of Clarivate’s ordinary shares at that time. However, management of Clarivate following the Transactions may establish a process for shareholder and interested party communications in the future.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Company Director and Executive Officer Compensation
2018 Compensation
The aggregate compensation awarded to, earned by and paid to the current directors and executive officers of Clarivate who were employed by, or otherwise performed services for, the Company for the fiscal year ended December 31, 2018 was approximately $3,194,725 (using an exchange rate as of December 31, 2018 of 1.2759 British Pounds Sterling to one U.S. dollar). The total amount set aside or accrued by Clarivate to provide pension, retirement or similar benefits to the current directors and executive officers of Clarivate who were employed by, or otherwise performed services for, the Company with respect to the fiscal year ended December 31, 2018 was approximately $37,370 (using an exchange rate as of December 31, 2018 of 1.2759 British Pounds Sterling to one U.S. dollar).
In 2018, the executive officers of Clarivate who were employed by the Company had the opportunity to earn annual cash bonuses to compensate them for attaining short-term company and individual performance goals. Each officer had an annual target bonus for 2018 that is expressed as a percentage of his or her annual base salary. Awards under the bonus plan for 2018 were generally based on financial metrics, including revenues, EBITDA, one-time costs and capital expenditures and on individual contributions. As of the time of filing this proxy statement/prospectus, annual bonus award amounts for 2018 have not yet been determined.
Employee Share Plans
Prior to the business combination, the Company granted awards to eligible participants under the Camelot Holdings (Jersey) Limited 2016 Equity Incentive Plan (the “Prior Plan”). Options to purchase ordinary shares of the Company, which are referred to herein as Company shares, granted under the Prior Plan typically were divided into four tiers, with distinct escalating exercise prices for each tier. In addition, certain participants were previously given an opportunity to make a cash investment to purchase Company shares and those participants who made such a cash investment received additional options under the Prior Plan that had a single exercise price. All options granted under the Prior Plan are eligible to vest in five equal annual installments generally following the date of grant of such options. Vesting will accelerate at such time as Onex and Baring have collectively sold for cash 70% of the total Clarivate ordinary shares received by them in the business combination.
Effective as of the effective time of the Jersey Merger, each option to purchase Company shares, to the extent then outstanding and unexercised, shall automatically, without any action on the part of the holder thereof, be converted into an option to purchase ordinary shares of Clarivate (a “Rollover Option”), on the same terms, conditions and vesting schedules as previously applied, with adjustments to the number of shares and exercise price, in each case based on an exchange ratio that is intended to preserve the intrinsic value and overall economics of the outstanding options. Prior to such conversion, the exercise price of outstanding options to purchase Company shares will be reduced by the per share value of the Tax Receivable Agreement (which is currently expected to be equal to $1.02). The conversion and adjustment of the options to purchase the Company’s shares as described above is referred to herein as the Option Conversion.
In addition, in connection with the business combination, Clarivate intends to adopt the Clarivate Analytics Plc 2019 Incentive Award Plan, or the 2019 Plan, under which Clarivate may grant cash and equity-based incentive awards to eligible service providers in order to attract, retain and motivate the persons who make important contributions to Clarivate. The 2019 Plan is intended to be the successor plan to the Prior Plan and, upon the effectiveness of the 2019 Plan, the Rollover Options will cease to be subject to the terms of the Prior Plan and will instead be governed by the terms and conditions of the 2019 Plan. The 2019 Plan will become effective immediately prior to the consummation of the business combination. The following summarizes the material features of the 2019 Plan.
Eligibility and Administration
Employees, consultants and directors of Clarivate, and employees and consultants of subsidiaries of Clarivate, will be eligible to receive awards under the 2019 Plan. The 2019 Plan will be administered by the
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Clarivate board of directors, which may delegate its duties and responsibilities to one or more committees of the directors and/or officers of Clarivate (referred to collectively as the plan administrator below), subject to the limitations imposed under the 2019 Plan, Section 16 of the Exchange Act, stock exchange rules and other applicable laws. The plan administrator will have the authority to take all actions and make all determinations under the 2019 Plan, to interpret the 2019 Plan and award agreements and to adopt, amend and repeal rules for the administration of the 2019 Plan as it deems advisable. The plan administrator will also have the authority to grant awards, determine which eligible service providers receive awards and set the terms and conditions of all awards under the 2019 Plan, including any vesting and vesting acceleration provisions, subject to the conditions and limitations in the 2019 Plan.
Award Limits
An aggregate pool of              Clarivate ordinary shares will initially be available for issuance under the 2019 Plan. Shares issued upon exercise of the Rollover Options and shares issued in respect of all future awards will come out of this pool. No more than              Clarivate ordinary shares may be issued under the 2019 Plan upon the exercise of options that are intended to qualify as incentive stock options under Section 422 of the Code. Shares issued under the 2019 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares.
If an award under the 2019 Plan (including the Rollover Options) expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, redeemed, canceled without having been fully exercised or forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the 2019 Plan. Awards granted under the 2019 Plan in substitution for any options or other shares or share-based awards granted by an entity before the entity’s merger or consolidation with Clarivate or Clarivate’s acquisition of the entity’s property or shares will not reduce the shares available for grant under the 2019 Plan, but will count against the maximum number of shares that may be issued upon the exercise of options that are intended to qualify as incentive stock options under Section 422 of the Code.
Awards
The 2019 Plan provides for the grant of options, including options that are intended to qualify as incentive stock options under Section 422 of the Code and nonqualified options, share appreciation rights, restricted shares, dividend equivalents, restricted share units and other share or cash based awards. Certain awards under the 2019 Plan may constitute or provide for payment of  “nonqualified deferred compensation” under Section 409A of the Code. All awards under the 2019 Plan will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms and post-termination exercise limitations. A brief description of each award type follows.

Options and Share Appreciation Rights.   Options provide for the purchase of ordinary shares in the future at an exercise price set on the grant date. Options that are intended to qualify as incentive stock options under Section 422 of the Code, in contrast to nonqualified options, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. Share appreciation rights entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The plan administrator will determine the number of shares covered by each option and share appreciation right, the exercise price of each option and share appreciation right and the conditions and limitations applicable to the exercise of each option and share appreciation right. The exercise price of an option or share appreciation right will not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of options that are intended to qualify as incentive stock options under Section 422 of the Code granted to certain significant shareholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of an option or share appreciation right may not be longer than ten years (or five years in the case of options that are intended to qualify as incentive stock options under Section 422 of the Code granted to certain significant shareholders).

Restricted Shares and Restricted Share Units.   Restricted shares are awards of nontransferable ordinary shares that remain forfeitable unless and until specified conditions are met and which
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may be subject to a purchase price. Restricted share units are contractual promises to deliver ordinary shares in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on ordinary shares prior to the delivery of the underlying shares. The plan administrator may provide that the delivery of the shares underlying restricted share units will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to restricted shares and restricted share units will be determined by the plan administrator, subject to the conditions and limitations contained in the 2019 Plan.

Other Share or Cash Based Awards.   Other share or cash based awards are awards of cash, fully vested ordinary shares and other awards valued wholly or partially by referring to, or otherwise based on, ordinary shares or other property. Other share or cash based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled. The plan administrator will determine the terms and conditions of other share or cash based awards, which may include any purchase price, performance goal, transfer restrictions and vesting conditions.
Performance Criteria
The plan administrator may select performance criteria for an award to establish performance goals for a performance period. Performance criteria under the 2019 Plan may include, but are not limited to, the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenues or sales or revenues growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on shareholders’ equity; total shareholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/​growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the company’s performance or the performance of a subsidiary, division, business segment or product line of the company or a subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies. When determining performance goals, the plan administrator may provide for exclusion of the impact of an event or occurrence which the plan administrator determines should appropriately be excluded, including, without limitation, non-recurring charges or events, acquisitions or divestitures, changes in the corporate or capital structure, events unrelated to the business or outside of the control of management, foreign exchange considerations, and legal, regulatory, tax or accounting changes.
Certain Transactions
In connection with certain corporate transactions and events affecting the ordinary shares of Clarivate, including a change in control, or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action under the 2019 Plan to prevent the dilution or enlargement of intended benefits, facilitate the transaction or event or give effect to the change in applicable
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laws or accounting principles. This includes canceling awards for cash or property, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares subject to outstanding awards and/or with respect to which awards may be granted under the 2019 Plan and replacing or terminating awards under the 2019 Plan. In addition, in the event of certain non-reciprocal transactions with the shareholders of Clarivate, the plan administrator will make equitable adjustments to awards outstanding under the 2019 Plan as it deems appropriate to reflect the transaction.
Plan Amendment and Termination
The Clarivate board of directors may amend or terminate the 2019 Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the 2019 Plan, may materially and adversely affect an award outstanding under the 2019 Plan without the consent of the affected participant and shareholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. The 2019 Plan will remain in effect until the tenth anniversary of its effective date, unless earlier terminated by the Clarivate board of directors. No awards may be granted under the 2019 Plan after its termination.
Claw-Back Provisions, Transferability and Participant Payments
All awards will be subject to any company claw-back policy as set forth in such claw-back policy or the applicable award agreement. Except as the plan administrator may determine or provide in an award agreement, awards under the 2019 Plan are generally non-transferrable, except by will or the laws of descent and distribution, or, subject to the plan administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the 2019 Plan and exercise price obligations arising in connection with the exercise of options under the 2019 Plan, the plan administrator may, in its discretion, accept cash, wire transfer or check, Shares that meet specified conditions, a promissory note, a “market sell order,” such other consideration as the plan administrator deems suitable or any combination of the foregoing.
The following table summarizes for Company employees, directors and service providers: (i) the outstanding Rollover Options held as of December 31, 2018 (after giving effect to the Option Conversion) and (ii) the number of Clarivate shares to be received in the business combination, based on their number of Company shares held as of December 31, 2018:
Name
Company
Shares
Company
Shares
Underlying
Options
Exercise
Price Per
Share
Grant
Date
Expiration
Date
Jay Nadler
462,422
462,422 6.56 3/3/2017 3/2/2027
2,758,282 6.56 3/3/2017 3/2/2027
1,970,182 10.34 3/3/2017 3/2/2027
1,970,182 14.12 3/3/2017 3/2/2027
1,182,083 17.91 3/3/2017 3/2/2027
Richard Hanks
23,781
23,781 6.56 5/23/2017 5/22/2027
369,937 6.56 3/3/2017 3/2/2027
264,241 10.34 3/3/2017 3/2/2027
264,241 14.12 3/3/2017 3/2/2027
158,544 17.91 3/3/2017 3/2/2027
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Name
Company
Shares
Company
Shares
Underlying
Options
Exercise
Price Per
Share
Grant
Date
Expiration
Date
Stephen Hartman
132,120
132,120 6.56 5/23/2017 5/22/2027
84,425 6.56 3/3/2017 3/2/2027
60,247 10.34 3/3/2017 3/2/2027
60,247 14.12 3/3/2017 3/2/2027
36,201 17.91 3/3/2017 3/2/2027
84,425 8.08 11/13/2018 11/13/2028
60,247 12.63 11/13/2018 11/13/2028
60,247 17.18 11/13/2018 11/13/2028
36,201 21.73 11/13/2018 11/13/2028
Charles Neral
26,424
All non-executive employees as a group
14,483,458
    (1)
Various Various (2)
(1)
Vested and unvested options have various exercise prices ranging from $6.56 to $21.73. The estimated weighted average exercise price of all outstanding options as of 12/31/2018 (after giving effect to the Option Conversion) is $11.02.
(2)
The weighted average remaining contractual life of all outstanding options as of 12/31/2018 is 8.5 years.
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THE ADJOURNMENT PROPOSAL
The adjournment proposal allows Churchill’s board of directors to submit a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event Churchill is unable to consummate the business combination. In no event will Churchill solicit proxies to adjourn the special meeting or consummate the business combination beyond the date by which it may properly do so under its amended and restated certificate of incorporation and Delaware law. The purpose of the adjournment proposal is to provide more time for the sponsor, the founders, Garden State, the Company, the Company Owners and/or their respective affiliates to make purchases of public shares or other arrangements that would increase the likelihood of obtaining a favorable vote on the business combination proposal and to meet the requirements that are necessary to consummate the business combination. See the section entitled “ The Business Combination Proposal — Interests of Churchill’s Directors and Officers in the Business Combination .”
In addition to an adjournment of the special meeting upon approval of an adjournment proposal, the board of directors of Churchill is empowered under Delaware law to postpone the meeting at any time prior to the special meeting being called to order. In such event, Churchill will issue a press release and take such other steps as it believes are necessary and practical in the circumstances to inform its stockholders of the postponement.
Consequences if the Adjournment Proposal is not Approved
If an adjournment proposal is presented at the special meeting and is not approved by the stockholders, Churchill’s board of directors may not be able to adjourn the special meeting to a later date if Churchill is unable to consummate the business combination (because either the business combination proposal is not approved or the conditions to consummating the business combination have not been met). In such event, the business combination would not be completed.
Required Vote
Adoption of the adjournment proposal requires the affirmative vote of a majority of the issued and outstanding shares of Churchill’s common stock represented in person or by proxy at the special meeting and entitled to vote thereon. Adoption of the adjournment proposal is not conditioned upon the adoption of any of the other proposals.
THE CHURCHILL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT CHURCHILL STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
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OTHER INFORMATION RELATED TO CHURCHILL
Introduction
Churchill was incorporated on June 20, 2018 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. Churchill’s efforts to identify a prospective target business were not limited to any particular industry or geographic region. Prior to executing the Merger Agreement, Churchill’s efforts were limited to organizational activities, completion of its initial public offering and the evaluation of possible business combinations.
Initial Public Offering and Simultaneous Private Placement
On September 11, 2018, Churchill consummated its initial public offering of 69,000,000 units, including 9,000,000 units under the underwriters’ over-allotment option, with each unit consisting of one share of common stock and one half of one warrant, each whole warrant to purchase one share of common stock. The units were sold at an offering price of  $10.00 per unit, generating gross proceeds of $690,000,000. Simultaneously with the consummation of the initial public offering, Churchill consummated the private placement of 18,300,000 warrants at a price of  $1.00 per warrant, generating total proceeds of $18,300,000.
After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to Churchill from the initial public offering and private placement were $690,000,000 (up to an additional $24,150,000 of deferred underwriting expenses may be paid upon the completion of a business combination) and $18,300,000, respectively. Of these amounts, $690,000,000 was deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. Except as described in the prospectus for Churchill’s initial public offering and described in the subsection below entitled “ — Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” these proceeds will not be released until the earlier of the completion of an initial business combination and Churchill’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the required time period.
Fair Market Value of Target Business
The target business or businesses that Churchill acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for its initial business combination, although Churchill may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. Churchill’s board of directors determined that this test was met in connection with the proposed business combination with the Company as described in the section titled “ The Business Combination Proposal ” above.
Stockholder Approval of Business Combination
Under Churchill’s amended and restated certificate of incorporation, in connection with any proposed business combination, Churchill must seek stockholder approval of an initial business combination at a meeting called for such purpose at which public stockholders may seek to redeem their public shares for cash, regardless of whether they vote for or against the proposed business combination, subject to the limitations described in the prospectus for Churchill’s initial public offering. Accordingly, in connection with the business combination with the Company, the Churchill public stockholders may seek to redeem their public shares for cash in accordance with the procedures set forth in this proxy statement/prospectus.
Voting Restrictions in Connection with Stockholder Meeting
In connection with any vote for a proposed business combination, including the vote with respect to the business combination proposal, all of Churchill’s initial stockholders, including all of its officers and directors, have agreed to vote the founder shares as well as any shares of common stock acquired in the aftermarket in favor of such proposed business combination.
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At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Churchill or its securities, the sponsor, the founders, Garden State, the Company, the Company Owners and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from them in the future, or they may enter into transactions with such persons and others to provide them with incentives to acquire shares of Churchill’s common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the business combination be approved where it appears that such requirements would otherwise not be met. All shares repurchased by Churchill’s affiliates pursuant to such arrangements would be voted in favor of the proposed business combination. As of the date of this proxy statement/prospectus, no agreements dealing with the above have been entered into by the sponsor, the founders, Garden State, the Company, the Company Owners or their respective affiliates.
Liquidation if No Business Combination
Under Churchill’s amended and restated certificate of incorporation, if Churchill does not complete a business combination by September 11, 2020, Churchill will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Churchill’s remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of  (ii) and (iii) above) to Churchill’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. At such time, the warrants will expire. Holders of warrants will receive nothing upon a liquidation with respect to such rights and the warrants will be worthless.
The sponsor, the founders and Garden State has each agreed to waive its rights to participate in any distribution from Churchill’s trust account or other assets with respect to the founder shares. There will be no distribution from the trust account with respect to Churchill’s warrants, which will expire worthless if Churchill is liquidated.
The proceeds deposited in the trust account could, however, become subject to the claims of Churchill’s creditors which would be prior to the claims of the Churchill public stockholders. Although Churchill has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses Churchill has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, and although Churchill will seek such waivers from vendors it engages in the future, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Accordingly, the actual per-share redemption price could be less than approximately $10.00, plus interest, due to claims of creditors. Additionally, if Churchill is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in Churchill’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Churchill’s stockholders. To the extent any bankruptcy claims deplete the trust account, Churchill cannot assure you it will be able to return to the Churchill public stockholders at least approximately $10.00 per share. Churchill’s public stockholders are entitled to receive funds from the trust account only in the event of its failure to complete a business combination within the required time periods or if the stockholders properly seek to have Churchill redeem their respective shares for cash upon a business combination which is actually completed by Churchill. In no other circumstances does a stockholder have any right or interest of any kind to or in the trust account.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The portion of Churchill’s trust account distributed to the Churchill public stockholders upon the redemption of 100% of its outstanding public shares in the event Churchill does not complete its initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable
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provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the portion of Churchill’s trust account distributed to the Churchill public stockholders upon the redemption of 100% of its public shares in the event Churchill does not complete its initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six -years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution. If Churchill is unable to complete a business combination within the prescribed time frame, it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, which redemption will completely extinguish the Churchill public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Churchill’s remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of  (ii) and (iii) above) to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, if a business combination does not occur, it is Churchill’s intention to redeem its public shares as soon as reasonably possible following the expiration of the time periods described above and, therefore, Churchill does not intend to comply with the procedures required by Section 280 of the DGCL, which would limit the amount and duration of Churchill’s stockholders’ liability with respect to liquidating distributions as described above. As such, Churchill’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of Churchill’s stockholders may extend well beyond the third anniversary of such date.
Because Churchill will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires Churchill to adopt a plan, based on facts known to it at such time that will provide for its payment of all existing and pending claims or claims that may be potentially brought against it within the subsequent 10 years. However, because Churchill is a blank check company, rather than an operating company, and Churchill’s operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from its vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.
Churchill will pay the costs of any subsequent liquidation from its remaining assets outside of the trust account. If such funds are insufficient, Churchill’s executive officers have agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek repayment for such expenses.
Facilities
Churchill currently maintains its principal executive offices at 640 Fifth Avenue, 12 th Floor, New York, NY 10019 and maintains other offices as provided to it by its officers. The cost for this space is included in the $31,250 per-month aggregate fee an affiliate of the sponsor charges Churchill for general and administrative services pursuant to a letter agreement between Churchill and such affiliate of the sponsor. Churchill believes, based on rents and fees for similar services in the relevant areas, that the fee charged by such affiliate of the sponsor is at least as favorable as Churchill could have obtained from an unaffiliated person. Churchill also maintains office space in Scottsdale, Arizona. Churchill considers its current office space, combined with the other office space otherwise available to its executive officers, adequate for its current operations.
Upon consummation of the business combination, the principal executive offices of Churchill will be those of the Company, at which time nothing more will be paid to such affiliate of the sponsor.
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Employees
Churchill has three executive officers. These individuals are not obligated to devote any specific number of hours to Churchill’s matters and intend to devote only as much time as they deem necessary to its affairs. Churchill does not intend to have any full time employees prior to the consummation of a business combination.
Directors and Executive Officers
Churchill’s current directors and executive officers are as follows:
Name
Age
Position
Jerre Stead
75 Chief Executive Officer and Director
Michael Klein
55 Chairman of the Board of Directors and Director
Sheryl von Blucher
57 Chief Operations Officer and Director
Peter M. Phelan
58 Chief Financial Officer
Balakrishnan S. Iyer
62 Director
Karen G. Mills
65 Director
Malcolm S. McDermid
39 Director
Martin S. Broughton
71 Director
The biographies of Churchill’s current directors are set forth under the section titled “ Information about Executive Officers, Directors and Nominees ” above.
Peter M. Phelan has been Churchill’s Chief Financial Officer since August 2018. Mr. Phelan is a managing director at M. Klein and Company, a global strategic advisory firm, which he joined in 2013. During that time, he has worked on a variety of transactions including notable mergers of public companies, activist defense assignments and both buy side and sell side M&A engagements. From 1991 to 2012, Mr. Phelan was at Citigroup Global Markets and its predecessor companies, Smith Barney and Salomon Smith Barney, where he held a variety of roles in the investment banking department including co-head of the financial sponsor coverage group in the U.S. Mr. Phelan’s work in investment banking at Citi spanned across most relevant product areas with a particular focus on working with the portfolio companies of private equity firms. Mr. Phelan holds a bachelor’s degree from Tulane University and a master’s degree in business administration from Columbia Business School.
Malcolm Stephen McDermid has been a director at Churchill since September 2018. Mr. McDermid is a Managing Director with Emerson Collective where he has led Emerson Collective’s venture capital investing efforts since August 2017. He was previously a Partner with Andreessen Horowitz, a venture capital firm based in Menlo Park, CA from 2013 until 2017. Prior to Andreessen Horowitz, Mr. McDermid was a Director with Stifel Nicolaus, formerly Thomas Weisel Partners, a technology focused investment bank in San Francisco. He began his career at Citigroup as a financial analyst. Mr. McDermid graduated from Tufts University with degrees in Quantitative Economics and Computer Science. He also earned a Masters in Law and Diplomacy from the Fletcher School of Law and Diplomacy at Tufts University.
Legal Proceedings
There is no material litigation, arbitration, governmental proceeding or any other legal proceeding currently pending or known to be contemplated against Churchill, and Churchill has not been subject to any such proceeding in the 10 years preceding the date of this proxy statement/prospectus.
Periodic Reporting and Audited Financial Statements
Churchill has registered its securities under the Exchange Act and has reporting obligations, including the requirement to file annual and quarterly reports with the SEC. In accordance with the requirements of the Exchange Act, Churchill’s annual reports contain financial statements audited and reported on by Churchill’s independent registered public accounting firm.
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Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of Churchill’s financial condition and results of operations should be read in conjunction with Churchill’s consolidated financial statements and notes to those statements included in this proxy statement/prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Please see “ Cautionary Note Regarding Forward-Looking Statements ” and “ Risk Factors ” in this proxy statement/prospectus.
Critical Accounting Policies
For a more detailed discussion of Churchill’s Accounting Policies, please see Note 2 to the consolidated financial statements of Churchill included elsewhere in this proxy statement/prospectus.
Common Stock Subject to Possible Redemption
Churchill accounts for its common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within Churchill’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Churchill’s common stock features certain redemption rights that are considered by Churchill to be outside of Churchill’s control and subject to the occurrence of uncertain future events.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Results of Operations
Churchill has not generated any revenues to date. Churchill’s entire activity from inception up to the closing of the initial public offering on September 11, 2018 was in preparation for that event. Since the offering, Churchill’s activity has been limited to the evaluation of business combination candidates, and Churchill will not generate any operating revenues until the closing and completion of its initial business combination. Churchill expects to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). Churchill currently incurs increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the period from June 20, 2018 (inception) through December 31, 2018, Churchill had losses from operations of approximately $2,525,364 representing formation and operating costs. These costs consisted mainly of professional and consulting fees, rent and office administrative costs.
Financial Condition and Liquidity
The net proceeds from Churchill’s initial public offering and private placement were $694,425,228. Of this amount, $690,000,000 was placed in the trust account. $4,425,228 of net proceeds not in trust have been, and will continue to be, used for working capital purposes.
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Churchill intends to use the net proceeds of its initial public offering and simultaneous private placement, including the funds held in the trust account and funds made available to it by Churchill’s officers and directors, to acquire a target business and to pay its expenses relating thereto. To the extent that Churchill’s capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining proceeds held in the trust account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing and R&D of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees, which Churchill had incurred prior to the completion of Churchill’s Business Combination if the funds available to Churchill outside of the trust account were insufficient to cover such expenses.
Generally, the proceeds held in the trust account will not be released to Churchill until the earlier of Churchill’s completion of an initial Business Combination and its redemption of 100% of the outstanding public shares upon our failure to consummate a Business Combination prior to September 11, 2020. Notwithstanding the foregoing, there can be released to Churchill from the trust account any interest earned on the funds in the trust account that Churchill needs to pay its income or other tax obligations.
As of December 31, 2018, Churchill had cash of approximately $3,528,190. In addition, Churchill had $694,574,904 in cash and equivalents held in trust for use in a business combination.
Until consummation of an initial business combination, Churchill will be using the funds not held in the trust account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
Commencing on September 7, 2018 and ending upon the consummation of a Business Combination or its liquidation, Churchill began incurring a fee payable to an affiliate of the sponsor of  $31,250 per month for providing it with office space and certain general and administrative services. Additionally, the company maintains office space in Scottsdale, Arizona, for which it will owe approximately $99,000 in minimum lease payments for the year ended December 31, 2019.
Off-Balance Sheet Arrangements
Churchill did not have any off-balance sheet arrangements as of December 31, 2018.
Code of Ethics
In September 2018, Churchill’s board of directors adopted a code of ethics that applies to all of Churchill’s executive officers, directors and employees. The code of ethics codifies the business and ethical principles that govern all aspects of Churchill’s business. Churchill will provide, without charge, upon request, copies of its code of ethics. Requests for copies of Churchill’s code of ethics should be sent in writing to Churchill Capital Corp, 640 Fifth Avenue, 12 th Floor, New York, NY 10019.
Upon the consummation of the business combination, Clarivate will adopt the Company’s code of ethics that will apply to Clarivate’s executive officers, directors and employees as well as those of its subsidiaries.
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BUSINESS OF CLARIVATE
In this section “we,” “us” and “our” refer to the Company prior to the business combination and to Clarivate following the business combination.
Overview
We are the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets. We provide structured information and analytics to facilitate the discovery, protection and commercialization of scientific research, innovations and brands. We believe that we hold a #1 or #2 global market position by revenues across our key offerings. We serve a large, diverse and global customer base, and as of the year ended December 31, 2018 we served over 40,000 entities in more than 180 countries as well as the top 30 pharmaceutical companies by revenues, 40 global patent and trademark offices and the 10 most trafficked corporate website domain portfolios. We believe the strong value proposition of our content, user interfaces, visualization and analytical tools, combined with our products and services’ integration into customers’ daily workflows, leads to our substantial customer loyalty as evidenced by their high propensity to renew their subscriptions with us.
Corporations, government agencies, universities, law firms and other professional services organizations around the world depend on our high-value, curated content, analytics and services. Unstructured data has grown exponentially over the last decade. This trend has resulted in a critical need for unstructured data to be meaningfully filtered, analyzed and curated into relevant information that facilitates key operational and strategic decisions made by businesses, academic institutions and governments worldwide. Our highly-curated, proprietary information created through our sourcing, aggregation, verification, translation and categorization of data, has resulted in our solutions being embedded in our customers’ workflow and decision-making processes.
For the year ended December 31, 2018, we generated $969 million of revenues, a net loss of $242 million, which reflects significant charges, many of which are non-cash and/or non-recurring, related to the 2016 Transaction and transition to a standalone entity, and $311 million of Standalone Adjusted EBITDA and incurred $45.4 million of capital expenditures. For a reconciliation of Standalone Adjusted EBITDA to net loss, see footnote 2 to “ Summary Historical Financial Information — Summary Historical Financial Information — Company .” We generate recurring revenues through our subscription-based model, which accounted for 82% of our revenues for the year ended December 31, 2018. In each of the past two years, we have also achieved annual revenue renewal rates in excess of 90%. See the section entitled “ —Our Competitive Strengths — Attractive Business Model with Strong Free Cash Flow Profile .” No single customer accounted for more than 1% of revenues and our ten largest customers represented only 6% of revenues for the year ended December 31, 2018.
The following charts illustrate our revenue for the year ended December 31, 2018 by group, type and geography:
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Our product portfolio includes well-established, market leading brands such as Web of Science, Derwent Innovation, Cortellis, CompuMark and MarkMonitor.
Science Group
Intellectual Property Group
Product Lines
Web of Science
Life Sciences
Derwent
CompuMark
MarkMonitor
Notable Products
Web of Science, InCites, Scholar One, EndNote, Kopernio, Publons
Cortellis, Newport, MetaCore, Integrity
Derwent Innovation, Techstreet
Trademark Screen, Trademark Search, Trademark Watch
Domain Management, Brand Protection, Anti-Piracy, Anti-Fraud
Our History
The Company’s predecessors date back to the acquisition of two industry-leading information services businesses: Derwent World Patents Index (“DWPI”) and Institute for Scientific Information (“ISI”). DWPI was founded in 1951 by Monte Hyams who first began abstracting and publishing British patents on a weekly basis. This platform was then launched as the first online patent search tool in 1974. ISI was founded in 1957 by Dr. Eugene Garfield as a series of databases which laid the foundation for modern day bibliometrics and the influential Journal Impact Factor indicator. Thomson Reuters acquired DWPI in 1984 and ISI in 1992; it made further investments in complementary businesses centered on life science research, domain management and brand protection.
Since Thomson Reuters acquired DWPI and ISI, the business now known as Clarivate has emerged as the leading global information services and analytics company serving the scientific research, intellectual property and life sciences end-markets. Through product development, investment and acquisitions, we have developed a full suite of solutions providing high-value structured information that facilitates the discovery, protection and commercialization of scientific research, innovations and brands.
During the majority of its time under prior ownership, the Company was operated as a set of non-core, separate divisions and Thomson Reuters decided in 2015 to divest them. This decision led to two key transformative events.
The first transformative event occurred in October 2016, when Onex and Baring acquired certain direct and indirect subsidiaries and assets comprising the intellectual property and science business of Thomson Reuters and formed Clarivate. Since the 2016 Transaction, the Company has been established as a standalone entity, and the new owners and management developed a robust, independent technology platform to serve customers’ needs.
Onex, Baring and a new executive team have focused on transitioning the Company to be independent and have completed a substantial number of operational improvements, including the following:

building a new senior executive management team to navigate skillfully through the Transition;

investing in our core products to upgrade their content, functionality, analytical tools and user interfaces;

completing the smaller acquisitions of Publons, Kopernio and TrademarkVision to complement our product offerings;

implementing initial cost savings initiatives; and

completing the Transition of the business on-schedule from Thomson Reuters in 2019.
The second transformative event occurred in January 2019, when Churchill announced that it would combine with Clarivate. With the Transition largely complete, proven business operator Jerre Stead, former Chairman and CEO of IHS Markit, will join Clarivate as Executive Chairman. Mr. Stead and CEO Jay Nadler will lead Clarivate’s skilled management team and intend to grow Clarivate through significant revenues enhancement and to maximize cash flow generation through operational improvements.
Our Transformation Strategy
The Clarivate management team, led by Executive Chairman Jerre Stead and CEO Jay Nadler, will implement a transformational strategy designed to improve operations, increase cash flow and accelerate
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revenues growth. The 2016 Transaction and transition to standalone operations has required extensive management time and focus and involved significant expenditures, including sizeable payments to Thomson Reuters under the TSA. We believe the completion of the transition to a standalone company positions us to implement our transformational strategy and to improve our below average productivity compared to leaders in the information services sector, such as IHS Markit, on a revenues per employee basis and in terms of Standalone Adjusted EBITDA margins.
Operational Improvement Initiatives
After the Transactions, Clarivate is expected to implement several cost-savings and margin improvement initiatives to generate substantial incremental cash flow, including:

decreasing costs by simplifying organization structures and trimming general and administrative functions to enhance a customer-centric focus;

using artificial intelligence and the latest technologies to reduce costs and increase efficiencies for content sourcing and curation;

moving work performed by contractors in-house to best-cost geographic locations;

achieving headcount productivity benchmarks and operational efficiency metrics based on alignment with quantified sector leader benchmarks;

expanding existing operations in best-cost geographic locations, aligning with business objectives;

minimizing our real estate footprint by reducing facility locations substantially over the next three years;

completing the TSA with Thomson Reuters; and

divesting non-core assets.
We believe that these initiatives will increase our Standalone Adjusted EBITDA margins to levels that are closer to sector leaders’ adjusted EBITDA margins by the end of 2020.
Revenues Growth Initiatives
Despite having a high percentage of subscription-based revenues, we have not grown revenues at rates consistent with information services sector leaders. We believe a significant opportunity exists for us to accelerate revenues growth by increasing the value of our products and services, developing new products, cross-selling certain products and optimizing sales force productivity. Actions to achieve such revenues growth are expected to include:

developing new value-added products and services;

offering additional analytics that enhance existing products and services;

expanding our footprint with new and existing customers, with significant opportunity for growth in APAC and Emerging Markets;

optimizing product pricing and packaging based on customer needs;

increasing salesforce focus on large accounts; and

restructuring our incentive plans to drive new business as well as cross-selling among similar products and overlapping buying centers.
Pursue Acquisition Opportunities
Given the fragmented nature of the broader information services industry, we track and, where appropriate, will continue to pursue opportunities across our product groups. In 2017 and 2018, we completed three small add-on acquisitions to augment our existing portfolio of assets and provide
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additional datasets and services for our customers. Our completed acquisitions include Publons and Kopernio in Science and TrademarkVision in IP. These acquisitions are in the early stages of being fully integrated into our platform, and we believe they have already provided additional value to our customers.
We plan to evaluate additional acquisition opportunities to supplement our existing platform and enable us to enter new markets. We intend to focus on disciplined and accretive investments that leverage our core strengths and enhance our current product, market, geographic and customer strategies. We believe the combination of Jerre Stead’s successful acquisition track record and our scale and status as a global information services leader uniquely position us to create value through additional acquisitions.
Our Competitive Strengths
Leading Market Positions in Attractive and Growing Global Markets
We offer a collection of high-quality, market leading information and analytic products and solutions serving the intellectual property, scientific research, and life-sciences end-markets. Through our products and services, we address the large and growing demand from corporations, government agencies, universities, law firms and other professional services organizations worldwide for comprehensive, industry-specific content and analytical tools to facilitate the discovery, development, protection, commercialization and measurement of scientific research, innovations and brands. We believe that we hold a #1 or #2 global market position by revenues across our key offerings. We also believe that the outlook for growth in each of our product lines is compelling because of customer demand for curated high-quality data, underpinned by favorable end-market trends, such as rising global R&D spending, growing demand for information services in emerging markets, the acceleration of e-commerce and the increasing number of patent and trademark applications.
A Trusted Partner Delivering Highly Curated Content Embedded Within Customer Workflows
We believe the substantial increase in unstructured data over the last decade has increased the importance of our proprietary, curated databases to our customers. This trend has resulted in a critical need for unstructured data to be meaningfully filtered, analyzed and curated into relevant information that facilitates key operational and strategic decisions made by businesses, academic institutions and governments worldwide. Our suite of branded information and analytic solutions provides access to content that has been collected, curated and standardized over decades, making our products and services highly valued and increasingly important for our customers. Our content curation and editorial teams include over 950 employees, approximately half of whom have master’s degrees or PhDs in technical fields as of December 31, 2018, who clean, analyze and classify unstructured data to ensure high-quality content and an enhanced user experience. We believe our solutions and commitment to excellence provide us with a significant advantage in both retaining existing and attracting new customers.
Attractive Business Model with Strong Free Cash Flow Profile
Approximately 82% of revenues for the year ended December 31, 2018, was generated through annual or multi-year subscription agreements. In addition, we have been able to achieve annual revenues renewal rates in excess of 90% over the past two years. We believe our business has strong and attractive free cash flow characteristics due to our visible and recurring subscription revenues stream, attractive Standalone Adjusted EBITDA margins, low capital expenditure requirements and favorable net working capital characteristics. Anticipated revenues growth, margin improvement and effective working capital management are expected to result in strong free cash flow generation. We believe this will create capacity to invest further into the business so that we can grow and maximize shareholder returns.
Diversified Product Lines with Longstanding Customer Relationships
We believe that the diversified nature of our product lines enhances the stability of our entire platform as we are not dependent on any one end market, product, service or customer. We serve a large, diverse and global customer base, and as of the year ended December 31, 2018 we served over 40,000 entities in more than 180 countries as well as the top 30 pharmaceutical companies by revenues, 40 global patent and trademark offices and the 10 most trafficked corporate website domain portfolios. No single customer
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accounted for more than 1% of revenues and our ten largest customers represented only 6% of revenues for the year ended December 31, 2018. We believe the strong value proposition offered by our content, combined with the integration of our products and services into our customers’ daily workflows and decision-making processes, leads to substantial customer loyalty. Our relationships with our top 50 customers by revenues span an average of over 15 years. Our diverse global footprint is highlighted by the distribution of our 2018 revenues by geography: North America (46%), Europe (25%), APAC (22%) and Emerging Markets (7%).
Resilience through Economic Cycles
We believe our business is resilient across economic cycles because our products and services are an integral part of our customers’ decision-making processes. We believe multi-year agreements also help to maintain this resiliency. During the most recent economic downturn, three of our key products — Web of Science, Cortellis and Derwent Innovation — realized year-over-year revenues increases from 2008 to 2009. Our diverse global footprint reduces our exposure to national and regional economic downturns.
Proven and Experienced Leadership
Mr. Stead is a proven operator with demonstrated success in shareholder value creation. He has served in an executive capacity at several Fortune 500 companies, most notably at IHS Markit. At Clarivate, Mr. Stead will bring his decades of expertise in the information services sector to guide a talented management team. Mr. Stead will work alongside Mr. Nadler, an experienced executive who previously was COO of Interactive Data Corporation and has held leadership roles at other information services companies, to implement a transformational strategy for Clarivate.
Our Product Lines
SCIENCE GROUP (56% of 2018 Revenues)
Our Science Group consists of our Web of Science and Life Science Product Lines. Both provide curated, high-value, structured information that is delivered and embedded into the workflows of our customers, which include research intensive corporations, life science organizations and universities world-wide.
Web of Science Product Line
Our Web of Science Product Line (“WOSPL”) provides products and services to organizations that plan, fund, implement and utilize research. We deliver search and discovery services to researchers with proprietary scientific data; we help researchers cite their research with workflow tools; we provide data and analytics to allow for global measures of research excellence and university rankings; we support governments and policy makers worldwide in assessment programs; and we inform a wide range of sector specific consultation and reporting activities to national and institutional research agencies across the G20 countries. We believe that the high quality and unique nature of WOSPL’s products and the informed approach of our professional service expertise has resulted in our information, services and workflow tools becoming embedded within the fabric of the research community. Key products include Web of Science, InCites, Journal Citation Reports, EndNote, ScholarOne, Converis, Publons and Kopernio.
Web of Science (“WOS”), our flagship product, holds a unique and pivotal role in the infrastructure of R&D and is frequently utilized as a reference standard in the academic, institutional and corporate sectors. It provides publication records and essential metadata from trusted published assets and is linked and indexed together via over one billion tracked citations. It is also highly selective with more than 3,000 journal titles reviewed annually and only approximately 10% are accepted for inclusion into the three core indices collection. A key metric we provide is the Journal Impact Factor’ (“JIF”), which we believe is the most influential and best-known research metric of the last 50 years. Its primary value is as a journal-level metric to assess what journals are the most impactful, but universities and research funders use JIF to inform their evaluation of research excellence when assessing faculty and selecting funding grantees. Researchers also rely on the JIF to identify top-tier journals where they should publish their content.
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Example Use Cases

A physics professor planning a research program and making a grant proposal accesses WOS to evaluate the current state of research in her discipline, identify emerging trends within highly regarded and relevant scientific journals and select a research topic, while the grant-making institutions will use WOS’s analytic tools to measure the professor’s credentials.

A university provost interested in evaluating her university’s chemistry department accesses WOS and our analytical tool InCites to measure the strength of the university’s research output and benchmark it against comparable institutions and find the best researchers to bolster the university’s ranking and improve the caliber of research, and find highly-cited researchers, departments and laboratories.
Life Sciences Product Line
Our Life Sciences Product Line (“LSPL”) provides products and services primarily to pharmaceutical and biotechnology companies. Our products are market leaders in regulatory intelligence and competitive intelligence, and our clinical trial offering is rapidly gaining share. We believe we provide a unique end-to-end proposition, which links to early research workflows, and believe there is an opportunity to stretch further into the approval and post-approval phases of drug development. Key products include Cortellis, Newport and Integrity.
Cortellis, our flagship LSPL product, is used by strategy, business development, drug development, medical affairs and clinical professionals at pharmaceutical and biotechnology companies to support research, market intelligence and competitive monitoring in connection with the development and commercialization of new drugs. Our customers use the database to access and evaluate scientific data, drug pipeline data, clinical trial information, drug monographs, pharmaceutical M&A data and regulatory information, all of which has been aggregated, curated and classified by our team of scientific experts who evaluate and select data for inclusion in the database from a wide array of sources. In addition, our team of experts creates high-value content from this data, such as analytics, abstracts, conference summaries and regulatory reports. Our data includes more than 70,000 drug program records and more than 300,000 clinical trial records.
Example Use Case

An analyst at a pharmaceutical firm who is evaluating several potential R&D programs will access the Cortellis database to assess competitive products in the drug development pipeline, review clinical trial data, and summarize regulatory information.
INTELLECTUAL PROPERTY GROUP (44% of 2018 Revenues)
Our Intellectual Property Group consists of our Derwent, CompuMark and MarkMonitor Product Lines. These product lines help manage customer’s end-to-end portfolio of intellectual property from patents to trademarks to corporate website domains.
Derwent Product Line
Our Derwent Product Line (“DPL”) enables customers to evaluate the novelty of potential new products, confirm freedom to operate with respect to their product design, help them secure patent protection, assess the competitive technology landscape and ensure their products comply with required industry standards. We provide a range of analytics capabilities and data visualization tools to improve the efficiency and accuracy of IP-driven decisions. Key products include Derwent Innovation, Techstreet and IP Professional Services.
Derwent Innovation, our flagship DPL product, is used by R&D professionals and lawyers to monitor patent filings, search existing patents and analyze data to support R&D decision-making. It is a critical resource to help our customers secure patent protection and address litigation of patent infringement. The product is powered by The Derwent World Patents Index, our proprietary database of over 80 million patent publications from 50 patent and trademark offices, which represented 98% of all patents published
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globally in 2017, that has been developed and curated for over 50 years. The database combines data science with our team of domain experts who correct, enrich and abstract over four million global patents per year in over 25 languages. We provide customers with easy-to-understand summaries of patent filings that are prepared by our domain experts, who index and translate the highly technical and intentionally obscure patent filings into understandable abstracts that provide insights into a patent’s novelty, use and advantage over prior patents.
Example Use Case

An employee developing a new product or idea (e.g., a chemical engineer or a product designer) will access the Derwent Innovation database of patents to evaluate the novelty and determine the patentability of the new product or idea.
CompuMark Product Line
Our CompuMark Product Line (“CPL”) provides trademark research and protection services for businesses and law firms globally and relies on our leading trademark database. CompuMark’s offerings span the entire lifecycle of a trademark, from determining availability of a proposed trademark to monitoring for infringement post registration. CPL provides global trademark research and protection to corporations and law firms globally. Over the last 30 years, the organization has curated content from more than 180 patent and trademark offices. Coupled with industry specific sources, including over 15 industrial design databases and 70 Pharma In-Use Databases, CompuMark delivers the most comprehensive data set for trademark professionals available.
Key products include trademark screening, trademark searching and trademark watching. We do this by (i) providing customers with sophisticated self-service tools to narrow large lists of potential trademarks, which we refer to as “screening”; (ii) preparing detailed, custom reports post screening that uncover potential risks related to a proposed trademark, which we refer to as “clearance searching”; and (iii) monitoring trademark applications and other data sources on a recurring subscription revenues basis to alert clients to potential instances of infringement post registration, which we refer to as “watching.”
Example Use Case

An attorney for a large law firm helps clear a trademark for use by its corporate customer as part of a new product launch. The attorney first conducts a “knock-out” search as part of a preliminary screening process using our trademark research tool and then later orders an analyst curated “Full Search” report by CompuMark to ensure the availability of the proposed trademark in the markets the customer will be operating in. In this way, the attorney can clear both the word and image mark for use by his/her client. The lawyer will then subscribe to CompuMark’s trademark watching services to continually ensure that none of their customers’ valuable trademarks are being infringed upon.
MarkMonitor Product Line
Our MarkMonitor Product Line (“MPL”) helps enterprises establish and manage portfolios of website domains and protect their brands and content from online infringement. MPL provides a mission-critical suite of services for brand managers, technology managers and legal counsel in large corporations globally to secure their online branding and content. The heightened level of e-commerce and digital engagement with customers, partners and employees has increased the need for corporations to have a service provider that offers a high level of security and accuracy in managing domain name registrations, and protecting against product counterfeiting, trademark infringement, phishing and illegal distribution of proprietary content.
Domain Management helps enterprise customers register and manage portfolios of website domain names. The product enables enterprises to customize registration recommendations based on specific attributes, such as top-level domain type and rank, restrictions, region, country and price. This allows customers to achieve the right balance of being easily found online globally without overpaying for domains that generate little to no traffic. Domain provides insights which help enterprises effectively manage their
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portfolios, and mitigate cyber squatters attempts to register domains aimed to dupe consumers. Brand Protection uses proprietary software and detection algorithms to monitor ecommerce marketplaces, websites and social media on an ongoing basis to detect instances of brand infringement. Once detected, the service reports infringements to customers and then initiates actions with internet retailers and auction sites to delist counterfeit goods and inform Internet Service Providers.
Example Use Case

An in-house counsel uses MarkMonitor Domain Management to ensure that their domains are protected from security threats such as domain hijacking and to ensure the timeliness of payments to registries around the world.
Customers
We serve a large, diverse and global customer base of over 40,000 entities in more than 180 countries as well as the top 30 pharmaceutical companies by revenue, 40 global patent and trademark offices and the 10 most trafficked corporate website domains portfolios. Our customers either use our databases on an exclusive basis or on a dual-sourced basis.
No single customer accounted for more than 1% of revenues and our ten largest customers represented only 6% and 7% of revenues for the years ended December 31, 2018 and 2017, respectively.
Competitive Environment
We believe the principal competitive factors in our business include the quality of content embedded in our databases and those of our competitors, customers’ perception of our products relative to the value that they deliver, user interface of the products and the quality and breadth of our overall offerings. We believe we compete favorably with respect to each of these factors.
We believe no single competitor currently offers the same scope of services and market coverage we provide. The breadth of markets we serve exposes us to a broad range of competitors as described below.
Our primary competitors for each of our product lines include the following:

Science Group: Digital Science, Elsevier, Evaluate, Global Data, Informa, IQVIA, ProQuest, Qiagen

Intellectual Property Group: Corsearch, Corporation Service Company, CPA Global, Friend MTS, IHS Markit, Incopro, LexisNexis, Markify, PatBase, PhishLabs, Questel, SAI Global, TrademarkNow, Yellow Brand Protection
Sources of Data
The data supporting our products and services is sourced principally through two different kinds of arrangements. First, we source data generally at little or no cost from public sources including federal, state and local governments. Second, we purchase data from third-party data aggregators under contracts that reflect prevailing market pricing for the data elements purchased.
Technology
Our information technology systems are fundamental to our success. They are used for the storage, processing, access and delivery of the data which forms the foundation of our business and the development and delivery of our solutions provided to our customers.
Much of the technology we use and provide to our customers is developed, maintained and supported by approximately 850 employees. We also utilize approximately 800 contractors to support our technology operations. We generally own or have secured ongoing rights to use for the purposes of our business all the customer-facing applications which are material to our operations.
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We are continually transforming our content, products, services and company to better meet our customers’ needs. We also are focused on securing our customer data and global systems as we implement and enhance our security programs. We are migrating the infrastructure for several of our customer applications and content databases to a third party service provider, which provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service.
Intellectual Property
As of December 31, 2018, we owned approximately 556 registered trademarks, 174 trademark applications, 2,679 domain names, 56 granted patents and 58 patent applications. We also own certain proprietary software. In addition, we are licensed to use certain third-party software, and obtain significant content and data through third-party licensing arrangements with content providers. We consider our trademarks, service marks, databases, software and other IP to be proprietary, and rely on a combination of statutory (e.g., copyright, trademark, trade secret and patent), contractual and technical safeguards to protect our IP rights. We believe that the IP we own and license is sufficient to permit us to carry on our business as presently conducted.
Our agreements with our customers and business partners place certain restrictions on the use of our IP. As a general practice, employees, contractors and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our IP and confidential information.
New Product Development
We believe that innovation is essential to our success and is one of our primary bases of competition. We believe we are in a unique position to help shape how professionals find, evaluate, interact with, consume and act upon information. We are focused on developing capabilities to help our products’ user interfaces, analytical tools, searching algorithms and content curation processes. Our current focus includes building out a technology platform focused on search technologies, big data and analytics, machine learning, social computing and natural language technologies. This will enable more rapid product development as we shift our investment focus toward new products rather than maintenance of legacy technology.
We also add to our business line offerings through acquisitions. Since the consummation of the 2016 Transaction, we have completed three small add-on acquisitions to augment our existing portfolio of assets and provide additional datasets and services for our customers. Given the fragmented nature of the broader information services industry, we track and, where appropriate, have pursued opportunities across our product lines. These include Publons and Kopernio in WOSPL, and Trademark Vision in CMPL. These acquired firms are in the early stages of being fully integrated into our platform, and we believe have already provided additional value to our customers.
When we find it advantageous, we augment our proprietary data sources and systems by forming alliances with other leading information providers and technology companies and integrating their product offerings into our offerings. This approach gives our customers the opportunity to obtain the information they need from a single source and more easily integrate the information into their workflows.
Marketing, Sales and Customer Support
We primarily sell our products and services directly to our customers, although some of our products and services are sold through partners. Focusing some of our sales and marketing efforts on digital sales and marketing has allowed us to broaden our range of customers and reduce sales and marketing costs. We have a dedicated global sales force, which, as of December 31, 2018, consisted of approximately 1,120 people.
We annually develop sales, distribution and marketing strategies on a product-by-product and service-by-service basis. We leverage customer data, business and market intelligence and competitive profiling to retain customers and cross-sell products and services, while also working to promote unified brand recognition across all our products and services.
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Our sales teams participate in both service and sales activities. They provide direct support, interacting frequently with assigned customers to assure a positive experience using our products and services. Sales people primarily seek out new sales opportunities, including existing customer retention and upsell, and work with the various sales teams to coordinate sales activity and provide the best solutions for our customers. A portion of our sales people’s compensation is tied to revenues retention. We believe our sales people’s product knowledge and local presence differentiates us from our competition.
In addition, we employ product specialists who are subject-matter experts and work with sales people on specific opportunities for their assigned products. Both sales people and product specialists have responsibility for identifying new sales opportunities. A team approach and a common customer relationship management system allow for effective coordination between the two groups.
Employees
As of December 31, 2018, approximately 4,450 full-time and approximately 130 part-time employees support our business operations. None of our employees in the United States are represented by unions; however, customary representation by unions and works councils applies for certain of our non-U.S. employees. We consider our relationship with our employees to be good and have not experienced interruptions to operations due to labor disagreements.
Regulatory Environment
Certain of our product lines provide authorized customers with products and services such as access to public records. Our product lines that provide such products and services are subject to applicable privacy and consumer information laws and regulations, including U.S. federal and state and EU and member state regulation. Our compliance obligations vary from regulator to regulator, and may include, among other things, strict data security programs, submissions of regulatory reports, providing consumers with certain notices and correcting inaccuracies in applicable reports. Many of these laws and regulations are complex and their application to us, our customers or the specific services and relationships we have with our customers are not always clear. Our failure to anticipate accurately the application of these laws and regulations, or any failure to comply, could create liability for us, result in adverse publicity and otherwise negatively affect our business. See “ Risk Factors ” for more information about the impact of government regulation on our company.
Properties
The Company’s primary office spaces are represented in the table below:
Location
Space Leased
Lease Expiration
London, UK
49,794 square feet
December 2028
Philadelphia, Pennsylvania, USA
123,853 square feet
October 2029
Hyderabad, India
54,064 square feet
July 2023
Chennai, India
47,522 square feet
February 2020
Boston, Massachusetts, USA
35,023 square feet
October 2024
Barcelona, Spain
33,387 square feet
October 2023
Tokyo, Japan
29,787 square feet
May 2022
Antwerp, Belgium
27,459 square feet
December 2024
Meridian, Idaho, USA
40,805 square feet
February 2025
San Francisco, California, USA
18,905 square feet
October 2025
Beijing, China
17,039 square feet
August 2020
Legal Proceedings
From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations or cash flows.
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Introduction
Clarivate is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.
Churchill Capital Corp is a special purpose acquisition company incorporated in Delaware on June 20, 2018. On September 11, 2018, Churchill consummated the Churchill IPO. Upon the closing of the Churchill IPO, overallotment option and the private placements, $690.0 million of the net proceeds therefrom were placed in a trust account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by Churchill, until the earlier of: (i) the consummation of a business combination or (ii) the distribution of the trust account, except that interest earned on the trust account can be released to Churchill to pay its tax obligations. As of December 31, 2018, there was $694.6 million held in the trust account. As a special purpose acquisition company, Churchill’s purpose is to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities.
On January 14, 2019, Churchill entered into the Merger Agreement with Clarivate, the Company, Delaware Merger Sub and Jersey Merger Sub. Pursuant to the Merger Agreement, a combination of Churchill and the Company will be effected through the Delaware Merger and the Jersey Merger and the Company Owners will be issued an aggregate of 217,500,000 ordinary shares of Clarivate (subject to certain adjustments). At the closing of the Transactions, the Company Owners will hold approximately 71% of the issued and outstanding ordinary shares of Clarivate and current stockholders of Churchill will hold approximately 29% of the issued and outstanding ordinary shares of Clarivate (assuming no redemptions by Churchill public shareholders).
The following unaudited pro forma condensed combined balance sheet as of December 31, 2018 assumes that the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, have occurred on December 31, 2018. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 present pro forma effect to the Transactions, including the related issuance of 1,500,000 shares of Churchill common stock to certain founders, as if they had been completed on January 1, 2018.
The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated. The pro forma combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The historical financial information of Churchill was derived from the audited financial statements of Churchill as of December 31, 2018 and for the period from June 20, 2018 (inception) through December 31, 2018, included elsewhere in this proxy statement/prospectus. The historical financial information of the Company was derived from the audited consolidated financial statements of the Company as of and for the year ended December 31, 2018, included elsewhere in this proxy statement/prospectus. This information should be read together with Churchill’s and the Company’s audited financial statements and related notes, the sections titled “ Other Information Related to Churchill — Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” and “ Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and other financial information included elsewhere in this proxy statement/prospectus.
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The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America. Under this method of accounting, Churchill will be treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of Clarivate issuing ordinary shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be recognized at fair value (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded.
The Company has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

The Company Owners will have the majority ownership interest and voting interest in the combined entity under the no redemptions and maximum redemptions scenarios with over 71% and 74% ownership voting interest, respectively;

the combined company’s board of directors will initially consist of 14 directors; nine of whom will initially be appointed by Onex and Baring and four of whom will initially be appointed by Churchill. Martin Broughton will also be appointed as a director. Mr. Broughton is not expected to be re-nominated in 2020 when his term ends and the size of the Board will be reduced to 13; and

the Company is the larger entity, in terms of both revenues and total assets.
Other factors were considered, including composition of management, purpose and intent of the Transactions and the location of the combined company’s headquarters, noting that the preponderance of evidence as described above is indicative that the Company is the accounting acquirer in the Transactions.
Description of the Transactions
Pursuant to the Merger Agreement, the aggregate stock consideration issued by Clarivate in the Transactions will be $3,052.5 million, consisting of 305,250,000 newly issued ordinary shares of Clarivate valued at $10.00 per share, assuming no Churchill public shareholder seeks redemption of Churchill public shares and subject to certain adjustments described below. Of the $3,052.5 million, the Company Owners will receive $2,175.0 million in the form of 217,500,000 newly issued ordinary shares of Clarivate, provided that the number of newly issued ordinary shares of Clarivate issued to the Company Owners will be increased by the amount of Excess Expenses (as defined in the Merger Agreement) divided by $10.00. Excess Expenses as defined in the Merger Agreement is the sum of  (a) outstanding expenses of Churchill and (b) the sum of outstanding deferred, unpaid or contingent underwriting, broker’s or similar fees, commissions or expenses owed by Churchill (if not included in (a)), less (c) certain previously agreed upon expense amounts. In addition, of the $3,052.5 million, Churchill public shareholders will receive $690.0 million in the form of 69,000,000 newly issued ordinary shares of Clarivate and the sponsor, including shares distributable to the founders and Garden State, will receive $187.5 million in the form of 17,250,000 ordinary shares of Clarivate issued to the sponsor and 1,500,000 additional ordinary shares of Clarivate issued to Michael Klein and an affiliate of Jerre Stead in respect of 1,500,000 shares of Churchill common stock to be purchased by them prior to the Delaware Merger (as further described in the Sponsor Agreement). The following represents the consideration at closing of the Transactions (the “Closing”):
(in millions)
Assuming No
Redemptions
Assuming
Maximum
Redemptions
Ordinary share issuance to the Company Owners (1)
$ 2,175.0 $ 2,175.0
Ordinary share issuance to Churchill public shareholders (1)
690.0 574.5
Ordinary share issuance to sponsor (1)
172.5 172.5
Additional purchase of ordinary shares by certain founders (1) (2)
15.0 15.0
Share Consideration – at Closing
$ 3,052.5 $ 2,937.0
(1)
Ordinary shares of Clarivate issued as set forth in the Merger Agreement at a price of  $10.00 per share.
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(2)
Additional shares of Churchill common stock purchased by certain founders as set forth in Section 5(a) of the Sponsor Agreement issued at a price of  $10.00 per share.
The value of share consideration issuable at the Closing is assumed to be $10.00 per share. The Transactions are accounted for as a reverse recapitalization, therefore any change in Clarivate’s trading price will not impact the pro forma financial statements because Clarivate will account for the acquisition of Churchill based on the amount of net assets acquired upon consummation. The consideration to be issued at the Closing as presented above does not include any warrants or options that are described below in Note 3 to Unaudited Pro Forma Condensed Combined Financial Information, “Earnings Per Share.”
In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement. Pursuant to the Sponsor Agreement, founder Jerre Stead (personally or through his designee, JMJS Group-II, LP) and founder Michael Klein agreed to purchase an aggregate of 1,500,000 newly-issued shares of Churchill common stock immediately prior to the completion of the Transactions for an aggregate purchase price of  $15,000,000. In addition, if a $20.00 Stock Price Level (as described below) is achieved on or before the sixth anniversary of the Closing, up to 5,000,000 newly-issued ordinary shares of Clarivate shall be allotted and issued to the persons designated by Jerre Stead and Michael Klein (or, in the event of death or incapacity of either, by his respective successor).
As described in greater detail under “ Certain Relationships and Related P erson Transactions — Company Related Person Transactions — Tax Receivable Agreement ,” prior to the Closing, the Company will enter into a Tax Receivable Agreement with the Company Owners. The Tax Receivable Agreement will generally provide for the payment by the Company to the Company Owners of 85% of certain tax benefits realized or deemed realized by the Company and its subsidiaries, as defined in the Tax Receivable Agreement. The term of the Tax Receivable Agreement will commence upon the execution date of the Tax Receivable Agreement and will continue indefinitely until all tax benefits that are subject to the Tax Receivable Agreement have been utilized, deemed utilized, or expired unless the Company exercises its right to terminate the Tax Receivable Agreement early or there is otherwise a deemed early termination. If there is an early termination or a deemed early termination, the Company’s obligations under the Tax Receivable Agreement would accelerate and it generally would be required to make an immediate payment equal to the present value of the deemed anticipated future payments to be made by it under the Tax Receivable Agreement, calculated in accordance with certain valuation assumptions set forth in the Tax Receivable Agreement. Any publicly traded parent entity of the Company may consummate a public offering of shares and use net proceeds of such offering to settle its obligations. In lieu thereof, the Company Owners may waive the payment in cash and instead receive stock consideration to the extent mutually agreeable to Company and the TRA Party Representative and to the extent practicable.
The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of cash redemptions of Churchill’s common stock:

Assuming No Redemptions:   This presentation assumes that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account. Under the no redemptions scenario, $649.5 million will be used to pay down the Term Loan Facility (with principal payments payable in $0.5 million increments).

Assuming Maximum Redemptions:   This presentation assumes that Churchill public stockholders holding 11,553,523 of Churchill’s public shares exercise their redemption rights and that such shares are redeemed for their pro rata share ($10.07 per share) of the funds in Churchill’s trust account for aggregate redemption proceeds of  $116.3 million. Under the Merger Agreement, the consummation of the Transactions is conditioned upon, among other things, the amount of Available Cash not being less than $550 .0 million. This scenario gives effect to the maximum number of redemptions that meet all of the conditions to permit consummation of the Transactions. Under the maximum redemptions scenario, the amount available for the paydown of the Term Loan Facility is reduced by the cash used for redemptions, resulting in a $533.0 million pay down the Term Loan Facility (with principal payments payable in $0.5 million increments).
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The following summarizes the pro forma Clarivate ordinary shares outstanding under the two scenarios:
Assuming No Redemptions
Assuming Maximum
Redemptions
(Shares)
%
(Shares)
%
Clarivate ordinary shares issued to the Company Owners (1)
217,500,000 217,500,000
Total Company Owners ordinary shares
217,500,000 71 % 217,500,000 74 %
Shares held by current Churchill public shareholders
69,000,000 69,000,000
Less: public shares redeemed (2)
(11,553,523 )
Total Churchill shares
69,000,000 23 % 57,446,477 20 %
Sponsor shares
17,250,000 17,250,000
Plus: Shares purchased by certain founders immediately prior to Closing
1,500,000 1,500,000
Net sponsor and founder shares
18,750,000 6 % 18,750,000 6 %
Pro Forma Shares Outstanding (3)
305,250,000
100 %
293,696,477
100 %
(1)
Shares are not adjusted for shares issued in connection with excess transaction costs incurred by Churchill.
(2)
Public shares estimated to be redeemed calculated as $116,301,259 ($694,574,904 from Churchill’s trust account, plus $3,528,190 cash on pro forma balance sheet, less $901,835 used to pay Churchill’s income and franchise tax obligations, less $45,900,000 for outstanding Churchill expenses, plus $15,000,000 for aggregate cash received from certain founders, less $550,000,000 cash balance) divided by $10.07 redemption value per share ($694,574,904 from Churchill’s trust account on pro forma balance sheet divided by 69,000,000 public shares).
(3)
Pro Forma Shares Outstanding includes the 10.6 million ordinary shares of Clarivate subject to the vesting restrictions but does not give effect to 52,800,000 warrants, the additional 5,000,000 shares issuable upon the achievement of a $20.00 Stock Price Level, or 185,601 Company management options that (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018) will be converted in the Mergers into 24,521,719 options to purchase ordinary shares of Clarivate.
The following unaudited pro forma condensed combined balance sheet as of December 31, 2018 and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 are based on the historical financial statements of Churchill and the Company. The unaudited pro forma adjustments are based on information currently available, assumptions, and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information. Certain amounts that appear in this section may not sum due to rounding.
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Unaudited Pro Forma Condensed Combined Balance Sheet
(In thousands)
As of December 31, 2018
Pro Forma
Adjustments
(Assuming
No
Redemptions)
As of
December 31,
2018
Additional
Pro Forma
Adjustments
(Assuming
Maximum
Redemptions)
As of
December 31,
2018
Company
(Historical)
Churchill
(Historical)
Pro Forma
Combined
(Assuming
No
Redemptions)
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
ASSETS
Current assets
Cash and cash equivalents
$ 25,575 $ 3,528 $ 694,575
(A )
$ 26,796 $ (116,301 )
(O )
$ 26,995
(24,150 )
(B )
(16,750 )
(C )
(20,580 )
(D )
15,000
(E )
(649,500 )
(F )
(116,500 )
(P )
(902 )
(G )
Restricted cash
9 9 9
Accounts receivable, net of allowance for doubtful accounts
331,295 331,295 331,295
Prepaid expenses
31,021 317
(H )
31,338 31,338
Prepaid expenses and other current assets
335 (335 )
(H )
Other current assets
20,712 18
(H )
20,730 20,730
Total Current Assets
408,612 3,863 (2,307 ) 410,168 199 410,367
Marketable securities held in Trust Account
694,575 (694,575 )
(A )
Computer hardware and other property, net
20,641 20,641 20,641
Identifiable intangible assets, net
1,958,520 1,958,520 1,958,520
Goodwill
1,282,919 1,282,919 1,282,919
Other non-current assets
26,556 26,556 26,556
Deferred income taxes
12,426 12,426 12,426
Total Assets
$ 3,709,674 $ 698,438 $ (696,882 ) $ 3,711,230 $ 199 $ 3,711,429
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$ 38,418 $ $ (364 )
(D )
$ 38,057 $ $ 38,057
3
(H )
Accounts payable and accrued expenses
1,936 (1,798 )
(C )
(107 )
(G )
(31 )
(H )
Accrued expenses and other current liabilities
153,849 28
(H )
153,890 153,890
13
(H )
Current portion of deferred revenues
391,102 391,102 391,102
Short-term debt, including current portion of long-term debt
60,345 60,345 60,345
Deferred tax liability
13 (13 )
(H )
Income taxes payable
795 (795 )
(G )
Total Current Liabilities
643,714 2,744 (3,064 ) 643,394 643,394
Long-term debt
1,930,177 (649,500 )
(F )
1,291,780 116,500
(P )
1,406,288
11,103
(F )
(1,992 )
(Q )
Non-current portion of deferred revenues
17,112 17,112 17,112
Deferred underwriting fee payable
24,150 (24,150 )
(B )
Other non-current liabilities
24,838 5,000
(C )
29,838 29,838
Tax receivable liability
[•]
(N )
[•] [•]
Deferred income taxes
43,226 43,226 43,226
Total Liabilities
2,659,067 26,894 [•] [•] 114,508 [•]
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As of December 31, 2018
Pro Forma
Adjustments
(Assuming
No
Redemptions)
As of
December 31,
2018
Additional
Pro Forma
Adjustments
(Assuming
Maximum
Redemptions)
As of
December 31,
2018
Company
(Historical)
Churchill
(Historical)
Pro Forma
Combined
(Assuming
No
Redemptions)
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
Commitments and Contingencies
Common stock subject to possible
redemption
666,543 (666,543 )
(I )
Shareholders’ Equity
Ordinary shares in Clarivate
15,000
(E )
[•] (116,301 )
(O )
[•]
666,543
(I )
2
(J )
16
(K )
[•]
(N )
1,677,494
(L )
3,757
(L )
(18,710 )
(M )
Preferred stock
Class A common stock – Churchill
0 0
(J )
Class B common stock – Churchill
2 (2 )
(J )
Share capital
16 (16 )
(K )
Additional paid-in capital
1,677,494 3,757 (1,677,494 )
(L )
(3,757 )
(L )
Accumulated other comprehensive
income/(loss)
5,358 5,358 5,358
Accumulated deficit
(632,261 ) (20,216 )
(D )
(663,580 ) (661,588 )
(11,103 )
(F )
1,992
(Q )
Retained earnings
1,242 (19,952 )
(C )
(18,710 )
(M )
Total Shareholders’ Equity
1,050,607 5,000 [•] [•] (114,309 ) [•]
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$

3,709,674
$ 698,438 $ [•] $ [•] $ 199 $ [•]
See accompanying notes to unaudited pro forma condensed combined financial information.
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Unaudited Pro Forma Condensed Combined Statement of Operations
(In thousands, except per share amounts)
Twelve
Months
Ended
December 31,
2018
For the
Period from
June 20,
2018
(inception)
thru
December 31,
2018
Pro Forma
Adjustments
(Assuming
No
Redemptions)
Twelve
Months
Ended
December 31,
2018
Additional
Pro Forma
Adjustments
(Assuming
Maximum
Redemptions)
Twelve
Months
Ended
December 31,
2018
Company
(Historical)
Churchill
(Historical)
Pro Forma
Combined
(Assuming
No
Redemptions)
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
Revenues, net
$ 968,468 $ $ $ 968,468 $ $ 968,468
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization
396,499 396,499 396,499
Operating costs
2,525 (2,525 )
(AA )
Selling, general and administrative costs, excluding depreciation and
amortization
369,377 369,377 369,377
Share-based compensation expense
13,715 13,715 13,715
Depreciation
9,422 9,422 9,422
Amortization
227,803 227,803 227,803
Transaction expenses
2,457 (364 )
(BB )
2,093 2,093
Transition, integration and other
61,282 61,282 61,282
Other operating expense (income)
(6,379 ) (6,379 ) (6,379 )
Total operating expenses
1,074,176 2,525 (2,889 ) 1,073,812 1,073,812
Loss from operations
(105,708 ) (2,525 ) 2,889 (105,344 ) (105,344 )
Other income:
Interest income
4,513 (4,513 )
(AA )
Interest expense, net
(130,805 ) 37,172
(CC )
(93,633 ) (6,699 )
(DD )
(100,332 )
Unrealized gain on marketable securities held in Trust Account
62 (62 )
(AA )
Other income, net
(130,805 ) 4,575 32,597 (93,633 ) (6,699 ) (100,332 )
Income/(loss) before income tax
(236,513 ) 2,050 35,486 (198,977 ) (6,699 ) (205,676 )
Benefit (provision) for income tax (1)
(5,649 ) (808 ) 808
(AA )
(5,649 ) (5,649 )
Net income (loss)
$ (242,162 ) $ 1,242 $ 36,294 $ (204,626 ) $ (6,699 ) $ (211,325 )
Per share:
Basic and diluted net loss per common
share
$ (147.14 ) $ (0.13 ) $ (0.67 ) $ (0.72 )
Weighted average shares outstanding, basic and diluted
1,645,818 17,706,822 305,250,000 293,696,477
(1)
The pro forma income statement adjustments do not have an income tax effect due to the pro forma net loss position and existing valuation allowance.
See accompanying notes to unaudited pro forma condensed combined financial information.
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Notes to Unaudited Pro Forma Condensed Combined Financial Information
1.   Basis of Presentation
The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the Company Owners being the majority stockholder and holding majority voting power in the combined company, the Company’s senior management comprising the majority of the senior management of the combined company, and the ongoing operations of the Company comprising the ongoing operations of the combined company. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of Clarivate issuing ordinary shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of the Company.
The unaudited pro forma condensed combined balance sheet as of December 31, 2018 assumes that the Transactions occurred on December 31, 2018. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2018 present the pro forma effect of the Transactions as if they had been completed on January 1, 2018. These periods are presented on the basis of the Company as the accounting acquirer.
The unaudited pro forma condensed combined balance sheet as of December 31, 2018 has been prepared using and should be read in conjunction with the following:

Churchill’s audited balance sheet as of December 31, 2018 and the related notes for the period ended December 31, 2018, included elsewhere in this proxy statement/prospectus; and

the Company’s audited consolidated balance sheet as of December 31, 2018 and the related notes for the year ended December 31, 2018, included elsewhere in this proxy statement/prospectus.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 has been prepared using and should be read in conjunction with the following:

Churchill’s audited statement of operations for the period from June 20, 2018 (inception) through December 31, 2018 and the related notes, included elsewhere in this proxy statement/prospectus; and

the Company’s audited consolidated statement of operations for the year ended December 31, 2018 and the related notes, included elsewhere in this proxy statement/prospectus.
Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Transactions. Management is currently finalizing certain equity agreements for the combined company. As these agreements are preliminary and not yet executed, management has not included a pro forma adjustment to reflect these equity agreements because such amounts are not known and not deemed factually supportable.
As of December 31, 2018, the sponsor, the founders and Garden State held 17,250,000 founder shares. In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement. Pursuant to the Sponsor Agreement, 10,619,425 of the founder shares to be converted into ordinary shares of Clarivate to the sponsor in connection with the Delaware Merger and available for distribution to Jerre Stead, Michael Klein and Sheryl von Blucher will be subject to certain time and performance-based vesting provisions. The remaining 6,630,575 founder shares to be converted into ordinary shares of Clarivate are not subject to time or performance-based vesting provisions. Of the 10,619,425 ordinary shares of Clarivate subject to vesting considerations (the “Unvested Founders Shares”), 50% of the Unvested Founders Shares shall vest in three equal annual installments, with the first,
   
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second and third installments vesting on the first, second and third anniversaries of the Closing date, respectively. The other 50% of the Unvested Founders Shares will vest at the achievement of two Stock Price Levels, defined in the Sponsor Agreement as when the last reported sale price per Clarivate ordinary share on the New York Stock Exchange equals or exceeds the applicable threshold for any 40 trading days during a 60 consecutive trading day period, which 60 consecutive trading day period will not commence until the earlier of  (i) the date on which Onex or Baring sell any of their respective ordinary shares of Clarivate to a third party that is not an affiliate of Onex, Baring, any founder, the sponsor or Garden State or (ii) the first anniversary of the Closing date. 25% of the Unvested Founders Shares shall vest at such time as a $15.25 Stock Price Level is achieved on or before the date that is 42 months after the Closing date; provided, however, that none of such Unvested Founders Shares shall vest prior to the first anniversary of the Closing date, not more than 1/3 of such Unvested Founders Shares shall vest prior to the second anniversary of the Closing date and not more than 2/3 of such Unvested Founders Shares shall vest prior to the third anniversary of the Closing date. 25% of the Unvested Founders Shares shall vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the Closing date; provided, however, that none of such Unvested Founders Shares shall vest prior to the first anniversary of the Closing date, not more than 1/3 of such Unvested Founders Shares shall vest prior to the second anniversary of the Closing date and not more than 2/3 of such Unvested Founders Shares shall vest prior to the third anniversary of the Closing date. If a $15.25 Stock Price Level is not achieved on or before the date that is 42 months after the Closing date, then the Unvested Founders Shares subject to vesting at the $15.25 Stock Price Level shall be eligible to vest with the Unvested Founders Shares subject to the $17.50 Stock Price Level. In the event of certain sale transactions involving the ordinary shares of Clarivate or all or substantially all of the assets of Clarivate, the Unvested Founders Shares subject only to time-based vesting shall automatically become vested. The Unvested Founders Shares subject to performance-based vesting will vest if the per share price implied in such sale transaction is equal to or greater than the applicable Stock Price Level. The Unvested Founders Shares that are subject to performance-based vesting will be forfeited for no consideration to the Company Owners if they do not vest in accordance with the Sponsor Agreement.
The pro forma adjustments reflecting the consummation of the Transactions are based on certain currently available information and certain assumptions and methodologies that the Company believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. Churchill believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transactions contemplated based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company. They should be read in conjunction with the audited financial statements and notes thereto of each of Churchill and the Company included elsewhere in this proxy statement/prospectus.
2.   Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Transactions and has been prepared for informational purposes only.
The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to events that are (1) directly attributable to the Transactions, (2) factually supportable, and (3) with respect to the statement of operations, expected to have a continuing impact on the results of the combined company. The Company and Churchill have not had any historical relationship prior to the Transactions. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
   
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The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the combined company filed consolidated income tax returns during the periods presented.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of the Company’s shares outstanding, assuming the Transactions occurred on January 1, 2018.
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
The adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2018 are as follows:
(A)
Reflects the reclassification of cash and cash equivalents held in the Churchill trust account that becomes available in connection with the Transactions.
(B)
Reflects the settlement of deferred underwriters’ fees incurred during the Churchill IPO due upon completion of the Transactions.
(C)
Reflects adjustments related to the payment of the anticipated transaction costs by Churchill including, but not limited to, advisory fees, legal fees and registration fees. This adjustment includes a reduction to accrued liabilities for any previously incurred transaction costs that are expected to be paid in connection with the consummation of the Transactions. A portion of the fees are not payable until after 2020 and are accrued for as a non-current liability.
(D)
Reflects adjustments related to the payment of anticipated transaction costs by the Company including, but not limited to, advisory fees, legal fees and registration fees. This adjustment includes a reduction to accounts payable for any previously incurred transaction costs that are expected to be paid in connection with the consummation of the Transactions.
(E)
Reflects 1.5 million additional shares of Churchill common stock purchased by certain founders for $15.0 million in connection with the Transactions.
(F)
Reflects paydown of the Term Loan Facility with the cash acquired from Churchill, less total estimated transaction expenses and cash moved to the balance sheet for working capital purposes assuming no redemptions by Churchill public stockholders. The principal paydown is in increments of  $0.5 million. The paydown results in the following adjustments:

$649.5 million reduction in long-term debt, offset by a proportional write-down of $11.1 million of unamortized deferred issuance costs and debt discount.
(G)
Reflects the payment of Churchill’s income and franchise tax obligations with cash held in Churchill’s trust account.
(H)
Reflects the reclassification of Churchill’s financial statement captions to the Company’s respective financial statement captions.
(I)
Reflects the reclassification of Churchill common stock subject to possible redemption to permanent equity assuming no redemptions.
(J)
Represents the re-capitalization of shares of Churchill’s Class A and Class B common stock to ordinary shares of Clarivate.
(K)
Represents the re-capitalization of ordinary shares of the Company to ordinary shares of Clarivate.
(L)
Represents the reclassification of additional paid-in capital of the Company and Clarivate to ordinary shares of Clarivate, which has no par value.
(M)
Elimination of Churchill’s retained earnings, which is inclusive of historical retained earnings.
(N)
Will reflect the liability estimate for the Tax Receivable Agreement among the Company and the other parties to the Tax Receivable Agreement such that the Company will pay 85% of all future realized (or deemed realized) tax benefits that are covered by the Tax Receivable Agreement to
   
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such other parties. This adjustment will represent the estimated liability. The Tax Receivable Agreement liability is based on the tax attributes at the Closing and is subject to estimates and assumptions that may change materially. See “ Certain Relationships and Related Person Transactions — Company Related Person Transactions ” for further discussion of the expected payments due under the Tax Receivable Agreement. We preliminarily estimate the fair value of the Company’s Tax Receivable Agreement liability at approximately $225.6 million, based on an estimated gross value of Covered Tax Assets (as defined in the Tax Receivable Agreement) of $565.1 million.
(O)
Reflects the withdrawal of funds from the Churchill trust account and cash on hand to fund the redemption of 11,553,523 shares of ordinary shares at $10.07 per share. The amount of  $10.07 per share utilized in the above computation is derived from $694.6 million in trust account per the pro forma condensed combined balance sheet divided by 69,000,000 Churchill public shares per the capitalization table herein (see “ Unaudited Pro Forma Condensed Combined Financial Statements ” for further information on this calculation).
(P)
Reflects the reduction in the paydown of the Term Loan Facility of  $116.5 million (payable in increments of  $0.5 million) due to the $116.3 million of proceeds used for cash redemptions assuming maximum redemptions by Churchill public stockholders that would have otherwise been used to pay down the Term Loan Facility, assuming no redemptions.
(Q)
Reflects the incremental and proportional increase to the Term Loan Facility discount and deferred issuance costs as a result of a lesser amount of net Term Loan Facility paydown. Under the maximum redemption scenario, a maximum of  $533.0 million of the Term Loan can be paid down, which is $116.5 million less than under the no redemption scenario.
Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 are as follows:
(AA)
Reflects the elimination of Churchill historical operating costs, interest income and unrealized gain on the trust account and related tax impacts that would not have been incurred had the Transactions been consummated on January 1, 2018.
(BB)
Elimination of transaction expenses related to the Transactions incurred in the year ended December 31, 2018.
(CC)
Reflects the reduction in interest expense related to the paydown of the Term Loan Facility, assuming no redemptions by Churchill public stockholders. Interest expense may not be reduced as much as set forth in the unaudited pro forma condensed consolidated statement of operations above if used for general corporate purposes. For every $1 million that the Term Loan Facility is not reduced, adjusted interest expense will increase by $56,873.
(DD)
Reflects adjustment to interest expense, based on the reduced cash available to pay down the Term Loan Facility assuming maximum redemptions by Churchill public stockholders.
3.   Earnings per Share
Represents the net earnings per share calculated using the historical weighted average ordinary shares of the Company and the issuance of additional ordinary shares in connection with the Transactions, assuming the ordinary shares were outstanding since January 1, 2018. As the Transactions, including related proposed equity purchases, are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average ordinary shares outstanding for basic and diluted net income (loss) per ordinary share assumes that the ordinary shares issuable in connection with the Transactions have been outstanding for the entire period presented. If the maximum number of shares of common stock of Churchill are redeemed, this calculation is retroactively adjusted to eliminate such shares for the entire periods.
   
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The unaudited pro forma condensed combined financial information has been prepared assuming the no redemption and maximum redemption scenarios:
(Net loss presented in thousands of dollars)
Assuming No
Redemptions
Assuming
Maximum
Redemptions
Pro Forma Basic and Diluted Loss Per Share
Twelve Months
Ended
December 31,
2018
Twelve Months
Ended
December 31,
2018
Pro Forma net loss attributable to shareholders
$ (204,626 ) $ (211,325 )
Weighted average ordinary shares outstanding, basic and diluted
305,250,000 293,696,477
Basic and diluted net loss per ordinary share
$ (0.67 ) $ (0.72 )
Pro Forma Weighted Average Shares – Basic and Diluted
Clarivate ordinary shares issued to the Company Owners
217,500,000 217,500,000
Total Clarivate ordinary shares issued to the sponsor and the founders
18,750,000 18,750,000
Clarivate ordinary shares issued to current Churchill public shareholders
69,000,000 57,446,477
Pro Forma Weighted Average Ordinary Shares – Basic and Diluted
305,250,000 293,696,477
As a result of the pro forma net loss, the earnings per share amounts exclude the dilutive impact from the following securities:

The 34,500,000 warrants sold during the Churchill IPO that will be converted in the Mergers into warrants to purchase up to a total of 34,500,000 Clarivate ordinary shares, which are exercisable at $11.50 per share;

The 18,300,000 private placement warrants sold concurrently with the Churchill IPO that will be converted in the Mergers into warrants to purchase up to a total of 18,300,000 Clarivate ordinary shares. Approximately 17,265,826 of these private placement warrants are held by the sponsor, and available for distribution to certain founders and Garden State, exercisable at $11.50 per share but subject to vesting only when a $17.50 Stock Price Level is achieved. The remainder of the private placement warrants are not subject to such vesting threshold and are exercisable at $11.50;

The 5,000,000 newly-issued ordinary shares of Clarivate shall be allotted and issued to the persons designated by Jerre Stead and Michael Klein (or, in the event of death or incapacity of either, by his respective successor) if a $20.00 Stock Price Level is achieved on or before the sixth anniversary of the Closing; and

The 185,601 management options of the Company (based on the number of options to purchase Company ordinary shares outstanding as of December 31, 2018) that will be converted in the Mergers into 24,521,719 options to purchase ordinary shares of Clarivate pursuant to the Clarivate Analytics Plc 2019 Incentive Award Plan, of which 6,654,229 will be vested and 17,867,490 will be unvested and have weighted average exercise prices of  $10.85 and $11.08, respectively, after giving effect to the expected adjustment to exercise prices of the management options of the Company in connection with the Tax Receivable Agreement. The number of outstanding management options assumes that no Company options will be exercised prior to the Closing.
   
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SELECTED HISTORICAL FINANCIAL INFORMATION
Churchill is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Transactions.
Churchill’s balance sheet data as of December 31, 2018 and statement of operations data for the period from June 20, 2018 (inception) through December 31, 2018 are derived from Churchill’s audited financial statements, included elsewhere in this proxy statement/prospectus.
The Company’s consolidated balance sheet data as of December 31, 2018 and 2017 and consolidated statements of operations, comprehensive loss and cash flow data for the fiscal years ended December 31, 2018 and 2017 are derived from the Company’s audited financial statements, included elsewhere in this proxy statement/prospectus.
The information is only a summary and should be read in conjunction with each of the Company’s and Churchill’s consolidated financial statements and related notes and “ Other Information Related to Churchill — Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of the Company or Churchill. All amounts are in US dollars. Certain amounts that appear in this section may not sum due to rounding.
Selected Historical Financial Information — Churchill
Period from
June 20, 2018
(inception)
through
December 31,
2018
Income Statement Data:
Revenues $ 0
Loss from operations
(2,525,364 )
Interest income
4,512,532
Net income
1,241,506
Basic and diluted net loss per share (1)
(0.13 )
Weighted average shares outstanding excluding shares subject to possible redemption – basic and diluted
17,706,822
As of
December 31,
2018
Balance Sheet Data:
Working capital
$ 2,020,292
Trust account, restricted
694,574,904
Total assets
698,437,748
Total liabilities
26,894,387
Value of common stock which may be redeemed for cash ($10.00 per share)
666,543,359
Stockholders’ equity
5,000,002
(1)
Net loss per share — basic and diluted — excludes income attributable to common stock subject to possible redemption of  $3,529,452 for the period presented.
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Selected Historical Financial Information — Company
Year Ended December 31
($ in millions)
2018
2017
Revenues, net
$ 968.5 $ 917.6
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization
(396.5 ) (394.2 )
Selling, general and administrative costs, excluding depreciation and amortization
(369.4 ) (343.1 )
Share-based compensation expense
(13.7 ) (17.7 )
Depreciation .
(9.4 ) (7.0 )
Amortization
(227.8 ) (221.5 )
Transaction expenses
(2.5 ) (2.2 )
Transition, integration and other
(61.3 ) (78.7 )
Other operating income (expense), net
6.4 (0.2 )
Total operating expenses
(1,074.2 ) (1,064.6 )
Loss from operations
(105.7 ) (147.0 )
Interest expense, net
(130.8 ) (138.2 )
Loss before income tax
(236.5 ) (285.2 )
Benefit (provision) for income taxes
(5.7 ) 21.3
Net loss
$ (242.2 ) $ (263.9 )
Other comprehensive income (loss):
Interest rate swaps, net of  $0 tax in all periods
2.5 1.1
Defined benefit pension plans, net of tax (benefit) of  $(0.1) and $0.4, respectively
(0.0 ) 0.9
Foreign currency translation adjustments
(11.1 ) 15.5
Total other comprehensive income (loss):
(8.6 ) 17.4
Comprehensive loss
$ (250.8 ) $ (246.5 )
Per share:
Basic
$ (147.14 ) $ (160.83 )
Diluted
$ (147.14 ) $ (160.83 )
Statements of Cash Flow Data:
Net cash provided by (used in):
Operating activities
$ (26.1 ) $ 6.7
Investing activities
11.9 (40.2 )
Financing activities
(32.6 ) 22.8
Balance Sheet Data:
As of December 31
($ in millions)
2018
2017
Total cash and cash equivalents, and restricted cash, end of period
$ 25.6 $ 77.5
Total assets
3,709.7 4,005.1
Long-term debt
1,930.2 1,967.7
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COMPANY’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with “Unaudited Pro Forma Condensed Combined Financial Statements,” “Selected Historical Financial Information” and our audited consolidated financial statements, including the notes thereto, included elsewhere in this proxy statement/prospectus. Certain statements in this “ Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations and intentions. Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.” “We,” “us,” and “our” as used herein refer to Camelot Holdings (Jersey) Limited and its subsidiaries prior to the consummation of the business combination and to Clarivate Analytics Plc and its subsidiaries (including Camelot Holdings (Jersey) Limited) following the consummation of the business combination. Certain income statement amounts discussed herein are presented on an actual and on a constant currency basis. We calculate constant currency by converting the non-U.S. dollar income statement balances for the most current year to U.S. dollars by applying the average exchange rates of the preceding year.
Overview
We offer a collection of high quality, market leading information and analytic products and solutions through our Science and IP Groups. Our Science Group consists of our Word of Science and Life Science Product Lines, and our IP Group consists of our Derwent, CompuMark and MarkMonitor Product Lines. Our highly curated Web of Science products are offered primarily to universities, helping them navigate scientific literature, facilitate research and evaluate and measure the quality of researchers, institutions and scientific journals across various academic disciplines. Our Derwent product line offerings help patent and legal professionals in R&D intensive businesses evaluate the novelty and patentability of new ideas and products. Our Cortellis product line offerings serve the content and analytical needs of pharmaceutical and biotechnology companies across the drug development lifecycle, including content on discovery and pre-clinical research, competitive intelligence, regulatory information and clinical trials. Our CompuMark products and services allow businesses and legal professionals to access our comprehensive trademark database. Finally, our MarkMonitor offerings include enterprise web domain portfolio management and online brand protection products and services.
Factors Affecting the Comparability of Our Results of Operations
The following factors have affected the comparability of our results of operations between the periods presented in this proxy statement/prospectus and may affect the comparability of our results of operations in future periods.
2016 Transaction and Transition to Operations as a Standalone Business
Our Company is the result of an October 2016 acquisition, by Onex and Baring, of certain direct and indirect subsidiaries and assets comprising the intellectual property and science business of Thomson Reuters for approximately $3,600 million (the “2016 Transaction”).
Transition Services Agreement
At the time of the 2016 Transaction, we entered into a Transition Services Agreement with Thomson Reuters, pursuant to which Thomson Reuters provided us with certain transitional support services, including facilities management, human resources, accounting and finance, sourcing, sales and marketing and other back office services, and continues to provide us with certain data center services. As of the date of this proxy statement/prospectus, we have replaced substantially all Transition Services Agreement services by building up comparable internal functions during the course of 2017 and 2018, though we continue to rely to a limited extent on certain Thomson Reuters data center services until we complete our product migration to either Amazon Web Services, or our own systems. Pursuant to the Transition Services Agreement, we pay Thomson Reuters a fee based on Thomson Reuters’ historical allocation for such services to our business when it was owned by Thomson Reuters. These Transition Services Agreement fees
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amounted to $55.8 million and $89.9 million in the years ended December 31, 2018 and 2017, respectively, and are expected to be approximately $9.6 million in 2019, until the scheduled expiry of the Transition Services Agreement in September 2019. Our standalone operating costs have differed substantially from the historical costs of services under the Transition Services Agreement and may differ substantially in the future, which may impact the comparability of our results of operations between the periods presented in this proxy statement/prospectus and with those for future periods.
Purchase Accounting Impact of the 2016 Transaction
In addition, the purchase accounting adjustments related to the 2016 Transaction included a revaluation of deferred revenues to account for the difference in value between the customer advances retained by us upon the consummation of the 2016 Transaction and our outstanding performance obligations related to those advances. The difference in value is written down as an adjustment to revenues as the related performance obligations, which cannot be recognized as revenues under GAAP, are fulfilled. This resulted in negative adjustments to revenues of  $3.2 million and $49.7 million in the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, the relevant performance obligations have been substantially fulfilled and the valuation difference has been substantially written down. As a result, our consolidated revenues and margins are not comparable between the periods presented in this proxy statement/prospectus and may not be comparable with those for future periods. To facilitate comparability between periods we present Adjusted Revenues in this proxy statement/prospectus to eliminate, among other things, the impact of the deferred revenues adjustment. See “— Certain Non-GAAP Measures — Adjusted Revenues .”
The Transactions
In January 2019, we entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated February 26, 2019, the “Merger Agreement”) by and among Churchill, Clarivate Analytics Plc (“Clarivate”), a public limited company newly incorporated under the laws of Jersey, Channel Islands, and currently owned 50% by Onex Partners IV LP and 50% by Onex Partners IV GP LP, CCC Merger Sub, Inc., a newly formed Delaware corporation and wholly owned subsidiary of Clarivate (“Delaware Merger Sub”), Camelot Merger Sub (Jersey) Limited, a newly formed private limited company organized under the laws of Jersey, Channel Islands and wholly owned subsidiary of Clarivate (“Jersey Merger Sub”), and Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of Jersey, Channel Islands (“Company”), which, among other things, provides for (i) Jersey Merger Sub to be merged with and into the Company with the Company being the surviving company in the merger (the “Jersey Merger”) and (ii) Delaware Merger Sub to be merged with and into Churchill with Churchill being the surviving corporation in the merger (the “Delaware Merger”, and together with the Jersey Merger the “Mergers” and the Mergers, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). Upon the consummation of the Transactions, we expect available cash to increase by approximately $710 million (assuming no holder of Churchill’s public shares exercises redemption rights as described in this proxy statement/prospectus), up to $649.5 million of which we currently intend to apply to paying down our existing debt and the remainder to pay costs related to the Transactions and for general corporate purposes. As a result, our pro forma interest expense would have been approximately $93.9 million in 2018. Following the consummation of the Transactions, the shares of our new parent holding company on the New York Stock Exchange, will require us to develop the functions and resources necessary to operate as a public company, including employee-related costs and equity compensation, which may result in increased operating expenses, which we estimate to be approximately $4 million per year.
Tax Receivable Agreement
Prior to the consummation of the Mergers, Camelot Holdings (Jersey) Limited expects to enter into a tax receivable agreement with the TRA Parties, including Onex and Baring (the “Tax Receivable Agreement”). The Tax Receivable Agreement, which will be accounted for as a long-term liability for financial reporting purposes, will generally require the Company to pay the TRA Parties 85% of the amount of cash savings, if any, realized (or, in some cases, deemed to be realized) as a result of the utilization of Covered Tax Assets (as defined in the Tax Receivable Agreement). Under the Tax Receivable
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Agreement, the aggregate reduction in income taxes payable will be computed by comparing the actual tax liability of Camelot Holdings (Jersey) Limited and its subsidiaries with the estimated tax liability of applicable entities had such entities not been able to utilize the Covered Tax Assets, taking into account several assumptions including, for example, that the relevant entities will pay U.S. state and local taxes at a rate of 7%, the tax assets existing at the time of the Company’s entry into the Tax Receivable Agreement are deemed to be utilized and give rise to a tax savings before certain other tax benefits, and certain asset or equity transfers by certain of the Company’s subsidiaries will be treated under the Tax Receivable Agreement as giving rise to tax benefits associated with the Covered Tax Assets implicated by such asset or equity transfers. Payments under the Tax Receivable Agreement will generally be made annually in cash, and the amounts payable will be subject to interest from the due date (without extensions) of the applicable tax filing that reflects a covered savings until the payment under the Tax Receivable Agreement is made. Tax Receivable Agreement payments are expected to commence in 2021 (with respect to the 2019 tax year) and will be subject to deferral, at the Company’s election, for payment amounts in excess of  $30 million with respect to the Tax Receivable Agreement payments to be made in 2021 (for taxable periods ending during 2019) and 2022 (for taxable periods ending during 2020), but will not be subject to deferral thereafter. Amounts deferred under the preceding sentence will accrue interest until paid in accordance with the terms of the Tax Receivable Agreement. The Tax Receivable Agreement is subject to certain events that may give rise to an acceleration of the Company’s obligations under the Tax Receivable Agreement. The Tax Receivable Agreement may, subject to certain conditions and deferral rights of the TRA Party Representative, be terminated by the Company at any time. Upon any such termination, the Company’s obligations under the Tax Receivable Agreement would be accelerated. An acceleration of the Company’s obligations under the Tax Receivable Agreement will generally result in us being required to make a payment to each applicable TRA Party equal to the present value of future Tax Receivable Agreement payments that we would be obligated to make, calculated using certain assumptions. The Tax Receivable Agreement will remain in effect until all such Covered Tax Assets have been used or expired, unless the agreement is terminated early.
IPM Product Line Divestiture
In October 2018, we sold certain subsidiaries and assets related to our intellectual property management (IPM) Product Line for a total purchase price of  $100.1 million gross of restricted cash and cash included in normalized working capital and related adjustments, of which $31.4 million was used to satisfy our term loan obligation. As a result, we recorded a net gain on sale of  $36.1 million, inclusive of incurred transaction costs of  $3.0 million, for the year ended December 31, 2018. Our audited consolidated financial statements included elsewhere in this proxy statement/prospectus include the results of operations related to our divested IPM Product Line through the date of divestiture, including revenues of $20.5 million and $31.9 million for the years ended December 31, 2018 and 2017, respectively. The divestiture did not represent a strategic shift, and is not expected to have a significant effect on our financial results or operations in future periods, although as a result our consolidated revenues and profits for the periods presented in this proxy statement/prospectus may not be comparable between periods or with those for future periods. To facilitate comparability between periods we present Adjusted Revenues in this proxy statement/prospectus to eliminate, among other things, IPM Product Line revenues for 2018 and 2017. See “— Certain Non-GAAP Measures — Adjusted Revenues.”
Effect of Currency Fluctuations
As a result of our geographic reach and operations across regions, we are exposed to currency transaction and currency translation impacts. Currency transaction exposure results when we generate revenues in one currency and incur expenses in another. While we seek to limit our currency transaction exposure by matching revenues and expenses, we are not always able to do so. For example, for the years ended December 31, 2018 and 2017, our revenues were denominated approximately 79% in U.S. dollars, 7% in euros, 7% in British pounds and 7% in other currencies in each of these years, while our direct expenses before depreciation and amortization, tax and interest in 2018 and 2017, were denominated approximately 70% and 73% in U.S. dollars, 9% and 8% in euros, 11% and 11% in British pounds and 10% and 8% in various other currencies, respectively.
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The financial statements of the Company’s subsidiaries outside the U.S. are typically measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the balance sheet date exchange rates, while income and expense items are translated at the average monthly exchange rates. Resulting translation adjustments are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.
Subsidiary monetary assets and liabilities that are denominated in currencies other than the functional currency are remeasured using the month-end exchange rate in effect during each fiscal month, with any related gain or loss recorded in Other operating income (expense), net within the Consolidated Statements of Operations.
We do not currently hedge our foreign currency transaction or translation exposure. As a result, significant currency fluctuations could impact the comparability of our results between periods, while such fluctuations coupled with material mismatches in revenues and expenses could also adversely impact our cash flows. See “ Quantitative and Qualitative Disclosures About Market Risk.
Key Performance Indicators
We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions.
Adjusted Revenues
Adjusted Revenues, which excludes the impact of the deferred revenues purchase accounting adjustment (recorded in connection with the 2016 Transaction) and the revenues from IPM Product Line prior to its divestiture, is presented because it facilitates comparability between periods, which we believe is useful to readers to better understand the underlying trends in our operations. See “ — Certain Non-GAAP Measures — Adjusted Revenues ” below for important information on the limitations of Adjusted Revenues and its reconciliation to Revenues under GAAP.
Standalone Adjusted EBITDA
Standalone Adjusted EBITDA is presented because it is a basis upon which our management assesses our performance and we believe it more accurately reflects the underlying trends of our operations. Standalone Adjusted EBITDA represents net (loss) income before provision for income taxes, depreciation and amortization and interest income and expense adjusted to exclude acquisition or disposal-related transaction costs (such costs include net income from continuing operations before provision for income taxes, depreciation and amortization and interest income and expense from the IPM Product Line which was divested in October 2018), losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses), Transition Services Agreement costs, separation and integration costs, transformational and restructuring expenses, acquisition-related adjustments to deferred revenues, non-cash income/(loss) on equity and cost method investments, non-operating income or expense, the impact of certain non-cash and other items that are included in net income for the period that the Company does not consider indicative of its ongoing operating performance, certain unusual items impacting results in a particular period to more accurately reflect management’s view of the recurring profitability of the business, the difference between annualized run-rate savings and savings realized during that same fiscal year as well as the difference in the Company’s actual standalone costs incurred relative to the steady state standalone cost estimate that the Company expects to achieve after completion of the Transition and optimization of the standalone functions by 2021. Standalone Adjusted EBITDA is also substantially identical to a key measure used in the covenants under our Credit Facilities and the Notes, with which we must comply to avoid default or to make certain dividend and other payments, investments or be able to incur additional debt. See “— Certain Non-GAAP Measures — Standalone Adjusted EBITDA ” below for important information on the limitations of Standalone Adjusted EBITDA and its reconciliation to our Net income (loss) under GAAP.
Annualized Contract Value
Annualized Contract Value (“ACV”), at a given point in time, represents the annualized value for the next 12 months of subscription-based client license agreements, assuming that all license agreements that
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come up for renewal during that period are renewed. License agreements may cover more than one product and the standard subscription period for each license agreement typically runs for no less than 12 months. The renewal period for our subscriptions starts 90 days before the end of the current subscription period, during which customers must provide notice of whether they intend to renew or cancel the license agreement.
An initial subscription period for new customers may be for a term of less than 12 months, in certain circumstances. Some of our customers, however, opt to enter into a full 12-month initial subscription period, resulting in renewal periods spread throughout the calendar year. Customers that license more than one subscription-based product may, at any point during the renewal period, provide notice of their intent to renew only certain subscriptions within the license agreement and cancel other subscriptions, which we typically refer to as a downgrade. In other instances, customers may upgrade their license agreements by adding additional subscription-based products to the original agreement. Our calculation of ACV includes the impact of downgrades, upgrades, and cancellations that have occurred as of the reporting period. For avoidance of doubt, ACV does not include fees associated with transactional revenues.
We monitor ACV because it represents a leading indicator of the potential subscription revenues that may be generated from our existing customer base over the upcoming 12-month period. Measurement of subscription revenues as a key operating metric is particularly relevant because a majority of our revenues are generated through subscription-based products, which accounted for 82% and 80% of our total revenues for the years ended December 31, 2018 and 2017, respectively. We calculate and monitor ACV for each of our Groups (except the IPM Product Line, which we sold in October 2018), and use the metric as part of our evaluation of our business and trends.
The amount of actual subscription revenues that we earn over any 12-month period are likely to differ from ACV at the beginning of that period, sometimes significantly. This may occur for numerous reasons, including subsequent changes in annual revenue renewal rates, license agreement cancellations, upgrades and downgrades, and acquisitions and divestitures.
We calculate the ACV on a constant currency basis to exclude the effect of foreign currency fluctuations.
The following table presents ACV as of the dates indicated:
December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Annualized Contract Value
$ 764.4 $ 737.5 $ 26.9 4 %
Annual Revenue Renewal Rates
Our revenues are primarily subscription based, which leads to high revenues predictability. Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for the subsequent reporting period.
“Annual revenue renewal rate” is the metric we use to determine renewal levels by existing customers across all of our Groups, and is a leading indicator of renewal trends, which impact our ACV and results of operations. We calculate the annual revenue renewal rate for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements. “Open renewals,” which we define as existing subscription product license agreements that come up for renewal, but are neither renewed nor cancelled by customers during the applicable reposting period, are excluded from both the numerator and denominator of the calculation. We calculate the annual revenue renewal rate to reflect the value of product downgrades but not the value of product upgrades upon renewal, because upgrades reflect the purchase of additional services.
The impact of upgrades, new subscriptions and product price increases is reflected in ACV, but not in annual revenue renewal rates. Our annual revenue renewal rates were 91% for both the years ended December 31, 2018 and 2017.
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Key Components of Our Results of Operations
Revenues, net
We categorize our revenues into two categories: subscription and transactional.
Subscription.    Subscription-based revenues are recurring revenues that are earned under annual, multi-year, or evergreen contracts, pursuant to which we license the right to use our products to our customers. Revenues from the sale of subscription data and analytics solutions are typically invoiced annually in advance and recognized ratably over the year as revenues are earned. Subscription revenues are driven by annual revenue renewal rates, new subscription business, price increases on existing subscription business and subscription upgrades and downgrades from recurring customers. Substantially all of our historical deferred revenues purchase accounting adjustments are related to subscription revenues.
Transactional.    Transactional revenues are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription-based revenues. Transactional products and services are invoiced according to the terms of the contract, typically in arrears. Transactional content sales are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized. Transactional revenues also include, to a lesser extent, professional services, which are typically performed under contracts that vary in length from several months to years for multi-year projects and are typically invoiced based on the achievement of milestones. The most significant components of our transactional revenues include our “clearance searching” and “backfiles” products.
Cost of Revenues, Excluding Depreciation and Amortization
Cost of revenues consists of costs related to the production, servicing and maintenance of our products and are comprised primarily of related personnel costs, such as salaries, benefits and bonuses for employees, fees for contracted labor, and data center services and licensing costs. Cost of revenues also includes the costs to acquire or produce content, royalties payable and non-capitalized R&D expenses. Cost of revenues does not include production costs related to internally generated software, which are capitalized.
Selling, General and Administrative, Excluding Depreciation and Amortization
Selling, general and administrative costs consist primarily of salaries, benefits, commission and bonuses for the executive, finance and accounting, human resources, administrative, sales and marketing personnel, third-party professional services fees, such as legal and accounting expenses, facilities rent and utilities and technology costs associated with our corporate infrastructure.
Depreciation
Depreciation expense relates to our fixed assets, including mainly computer hardware and leasehold improvements, furniture and fixtures. These assets are depreciated over their expected useful lives, and in the case of leasehold improvements over the shorter of their useful life or the duration of the related lease.
Amortization
Amortization expense relates to our finite-lived intangible assets, including mainly databases and content, customer relationships and internally generated computer software. These assets are amortized over periods of between two and 20 years. Definite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value based on discounted cash flows. No impairment of intangible assets has been identified during any financial period included in our accompanying audited consolidated financial statements.
Share-based Compensation
Share-based compensation expense includes costs associated with stock options granted to certain members of management.
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Transaction Expenses
Transaction expenses are incurred to complete business combination transactions, including acquisitions and disposals, and typically include advisory, legal and other professional and consulting costs.
Transition, Integration and Other Related Expenses
Transition, integration and other related expenses, including transformation expenses, mainly reflect the costs of transitioning certain activities performed under the Transition Services Agreement by Thomson Reuters and certain consulting costs related to standing up our back-office systems to enable our operation on a stand-alone basis. These costs include labor costs of full time employees currently working on migration projects, including primarily employees whose labor costs are capitalized in other circumstances (such as employees working on application development).
Other Operating Income (Expense), net
Other operating income (expense) consists of gains or losses related to the disposal of our assets, asset impairments or write-downs and the consolidated impact of re-measurement of the assets and liabilities of our company and our subsidiaries that are denominated in currencies other than each relevant entity’s functional currency.
Interest Expense
Interest expense consists of interest expense related to our borrowings under the Term Loan Facility and the Notes, as well as the amortization of debt issuance costs and interest related to certain derivative instruments.
Benefit (Provision) for Income Taxes
A provision for income tax is calculated for each of the jurisdictions in which we operate. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Interest accrued related to unrecognized tax benefits and income tax related penalties are included in the provision for income taxes.
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Results of Operations
Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017
The following table presents the results of operations for the years ended December 31, 2018 and 2017:
Years Ended December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Revenues, net
$ 968.5 $ 917.6 $ 50.9 6 %
Cost of revenues, excluding depreciation and amortization
(396.5 ) (394.2 ) (2.3 ) 1 %
Selling, general and administrative, excluding depreciation and amortization
(369.4 ) (343.1 ) (26.3 ) 8 %
Share-based compensation
(13.7 ) (17.7 ) 4.0 (23 )%
Depreciation
(9.4 ) (7.0 ) (2.4 ) 34 %
Amortization
(227.8 ) (221.5 ) (6.3 ) 3 %
Transaction expenses
(2.5 ) (2.2 ) (0.3 ) 14 %
Transition, integration and other related
expenses
(61.3 ) (78.7 ) 17.4 (22 )%
Other operating income (expense), net
6.4 (0.2 ) 6.6 (3,300 )%
Total operating expenses
(1,074.2 ) (1,064.6 ) (9.6 ) 1 %
Loss from operations
(105.7 ) (147.0 ) 41.3 (28 )%
Interest expense, net
(130.8 ) (138.2 ) 7.4 (5 )%
Loss before income tax
(236.5 ) (285.2 ) 48.7 (17 )%
Benefit (provision) for income taxes
(5.7 ) 21.3 (26.9 ) (126 )%
Net Loss
$ (242.2 ) $ (263.9 ) $ 21.8 (8 )%
Revenues, net
Revenues, net increased by $50.9 million, or 6%, from $917.6 million in 2017 to $968.5 million in 2018. Adjusted Revenues, which exclude the impact of the deferred revenues adjustment and revenues from the IPM Product Line prior its date of divestiture, increased $15.8 million, or 2%, to $951.2 million in 2018 from $935.4 million in 2017. For an explanation of our calculation of Adjusted Revenues and the limitations as to its usefulness, see “— Certain Non-GAAP Measures — Adjusted Revenues .”
The comparability of our Revenues, net between periods was impacted by several factors described under “— Factors Affecting the Comparability of Our Results of Operations ” above. In addition to the deferred revenues adjustment and the divestiture of the IPM Product Line, our results were also impacted by foreign currency effects, as discussed below.
The table below presents the items that impacted the change in our revenues, net between periods.
Variance 2018 vs. 2017
(in millions, except percentages)
$
%
Revenues change driver
Decrease in deferred revenues adjustment
$ 46.5 5 %
Decrease in consolidated IPM Product Line revenues
(11.4 )    (1 )%
Foreign currency translation
6.0 1 %
Revenues increase from ongoing business
9.8 1 %
Revenues, net (total change)
$ 50.9 6 %
Revenues, net from our ongoing business improved for both our Groups, led by Science, reflecting a trend consistent with the increase in our ACV between periods, mainly due to product price increases. The evolution of our recurring business is discussed further below by Group.
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The following table presents the amounts of our subscription and transactional revenues, including as a percentage of our total revenues, for the periods indicated.
Years Ended December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Subscription Revenues
$ 790.9 82 % $ 736.0 80 % $ 54.9 8 %
Transactional Revenues
177.6 18 % 181.6 20 % (4.0 ) (2 %)
Revenues, net
$ 968.5 100 % $ 917.6 100 % $ 50.9 6 %
The increase in subscription revenues between periods mainly reflected the effect of the deferred revenues purchase accounting adjustment and product price increases.
The table below presents our revenues split by geographic region, separating the impacts of the deferred revenues adjustment and the IPM Product Line:
Years Ended December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Revenues by Geography
North America
$ 430.7 $ 429.2 $ 1.5 %
Europe
241.9 239.3 2.6 1 %
APAC
209.1 200.0 9.1 5 %
Emerging Markets
69.5 66.9 2.6 4 %
Impact of deferred revenues adjustment (1)
(3.2 ) (49.7 ) 46.5 (94 )%
IPM Product Line (2)
20.5 31.9 (11.4 ) (36 )%
Total Revenues, net
$ 968.5 $ 917.6 $ 50.9 6 %
(1)
Reflects the deferred revenues adjustment made as a result of purchase accounting related to the 2016 Transaction. See “—  Factors Affecting the Comparability of Our Results of Operations — 2016 Transaction and Transition to Operations as a Standalone Business — Purchase Accounting Impact of the 2016 Transaction .”
(2)
Reflects the revenues generated by the IPM Product Line until its divestiture on October 3, 2018. See “— Factors Affecting the Comparability of Our Results of Operations — IPM Product Line Divestiture .” IPM Product Line revenues were concentrated in North America.
APAC revenues, which we expect to increase as a proportion of our total revenues in future years, increased primarily due to expanded sales and marketing efforts in China and Japan fueling new sales, and a modest improvement in our annual revenues renewal rate for subscription based products.
The following table, and the discussion that follows, presents our revenues by Group for the periods indicated.
Years Ended December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Science Group
$ 531.2 $ 522.2 $ 9.0 2 %
Intellectual Property Group
420.0 413.2 6.8 2 %
IPM Product Line (1)
20.5 31.9 (11.4 ) (36 )%
Deferred revenues adjustment (2)
(3.2 ) (49.7 ) 46.5 (94 )%
Total Revenues, net
$ 968.5 $ 917.6 $ 50.9 6 %
(1)
Reflects nine months of revenues for the year ended December 31, 2018 prior to our divestiture of the IPM Product Line on October 3, 2018.
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(2)
Reflects the deferred revenues adjustment resulting from purchase accounting attributable to the 2016 Transaction. See “ — Factors Affecting the Comparability of Our Results of Operations — The 2016 Transaction and Transition to Operations as a Standalone Business — Purchase Accounting Impact of the 2016 Transaction.
Science Group:    Revenues increased by $9.0 million, or 2%, from $522.2 million in 2017 to $531.2 million in 2018. Of the $9.0 million increase, $2.3 million was attributable to foreign currency translation effects. Exclusive of these currency translation effects, subscription revenues increased mainly due to net price increases on our subscription revenues products and new subscription business across our Product Lines. The increase in subscription revenues was partially offset by a decrease in transactional revenues across several products, reflecting our product and sales strategy to enhance our subscription product offerings.
Intellectual Property Group:    Revenues increased by $6.8 million, or 2%, from $413.2 million in 2017 to $420.0 million in 2018. Of the $6.8 million increase, $3.8 million was attributable to foreign currency translation effects. Exclusive of these currency translation effects, subscription revenues increased mainly due to net price increases on our subscription revenues products and new subscription business across our Product Lines. The increase in subscription revenues was partially offset by a decrease in transactional revenues across several products, reflecting our product and sales strategy as discussed above.
IPM Product Line:    Revenues decreased by $11.4 million, or 36%, from $31.9 million in 2017 to $20.5 million in 2018, as 2017 included a full year of the IPM Product Line revenues while 2018 included only nine full months of activity preceding the sale of the IPM Product Line in October 2018.
Cost of Revenues, Excluding Depreciation and Amortization
Cost of revenues increased by $2.3 million, or 1%, from $394.2 million in 2017 to $396.5 million in 2018. Excluding the $3.8 million of cost attributable to foreign currency translation effects, cost of revenues declined slightly between periods. The change also reflected a $23.3 million decrease in Transition Services Agreement fees allocated to Cost of revenues and a $9.0 million decrease in consulting fees for outside services as well as an increase of  $36.0 million in technology related costs attributable to the in-house establishment of functions for maintaining our product content to replace services previously provided by Thomson Reuters, mainly cloud computing and data service centers.
Selling, General and Administrative, Excluding Depreciation and Amortization
Selling, general and administrative expense, excluding depreciation and amortization, increased by $26.3 million, or 8%, from $343.1 million in 2017 to $369.4 million in 2018. Excluding the $2.0 million of cost attributable to foreign currency translation effects, the increase was driven by a $16.0 million increase in people related cost such as salaries and recruitment costs which were driven by an increase in headcount and merit raises, a $6.0 million increase in professional fees such as audit and tax fees due to an increase in required reporting, and a $4.0 million increase in telecommunication costs. These increases in cost were offset by a net $1.0 million decline in cost primarily associated with facility, technology, and advertising cost incurred as a standalone company compared to the cost that would have been paid to our former parent.
Share-based Compensation
Share-based compensation expense decreased by $4.0 million, or 23%, from $17.7 million in 2017 to $13.7 million in 2018, reflecting a net decrease in equity compensation vesting attributable to a decline in grants in 2018 from 2017 and 2017 from 2016.
Depreciation
Depreciation expense increased by $2.4 million, or 34%, from $7.0 million in 2017 to $9.4 million in 2018. The increase relates primarily to increased purchases of fixed assets, particularly computer hardware.
Amortization
Amortization expense increased by $6.3 million, or 3%, from $221.5 million in 2017 to $227.8 million in 2018. The increase primarily relates to an increase in intangible assets related to the Publons acquisition,
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and computer software associated with the capitalization of internal and external labor during 2018. This was partially offset by a reduction in intangible amortization due to the divestiture of the IPM Product Line and related assets.
Transaction Expenses
Transaction expenses increased by $0.3 million, or 14%, from $2.2 million in 2017 to $2.5 million in 2018. Transaction expenses primarily relate to acquisitions and dispositions that occurred during the applicable period.
Transition, Integration and Other Related Expenses
Transition, integration, and other expenses decreased by $17.4 million, or 22%, from $78.7 million in 2017 to $61.3 million in 2018. The decrease reflects the gradual slowing in the pace of costs incurred to stand up our standalone company infrastructure as we completed the establishment of necessary functions, systems and processes. We expect the pace of costs incurred to continue to slow.
Other Operating Income (Expense), net
Other operating income was $6.4 million in 2018, compared to other operating expense of  $0.2 million in 2017. Of the $6.6 million change between periods, $3.5 million was attributable to the consolidated impact of the remeasurement of the assets and liabilities of our company that are denominated in currencies other than each relevant entity’s functional currency and a $36.1 million net gain from the sale of the IPM Product Line and related assets, which was partially offset by a $33.8 million loss on the write down of a tax indemnity asset due to a dispute with the indemnitor.
Interest Expense
Interest expense decreased by $7.4 million, or 5%, from $138.2 million in 2017 to $130.8 million in 2018. The decrease was primarily due to debt issuance cost write-offs resulting from debt amendments in 2017, and associated lower interest rate margin in the fourth quarter. These decreases were partially offset by increases in LIBOR, which is the base rate on the Term Loan Facility, through the course of 2018.
Benefit (Provision) for Income Taxes
Provision for income tax was $5.7 million in 2018, compared to a benefit of  $21.3 million in 2017. The provision in 2018, despite a loss before tax reflects unrecognized tax losses and valuation allowance. In 2017 we recorded a $16.5 million one-time tax benefit, attributable to changes in Belgian and U.S. tax rates. Our effective tax rate was (2.4)% in 2018 and was 7.5% in 2017. Differences in effective tax rates for the reported periods are attributable mainly to changes in valuation allowance and temporary differences and the one-time impacts discussed below, and may not be indicative of our effective tax rates for future periods. In addition, changes in applicable tax rates were enacted in 2017, including in Belgium and the United States, and the Company recorded a tax benefit related to these changes. We did not provide for income or withholding taxes on the undistributed income of our foreign subsidiaries as of December 31, 2018, because we intend to permanently reinvest these earnings.
Certain Non-GAAP Measures
We include non-GAAP measures in this proxy statement/prospectus, including Adjusted Revenues and Standalone Adjusted EBITDA because they are a basis upon which our management assesses our performance and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most accurate indicators of our continuous operational performance. Standalone Adjusted EBITDA, along with the quantitative and qualitative information, may also be utilized by management and our compensation committee as an input for determining incentive payments to employees. Standalone Adjusted EBITDA is substantially identical to a key measure used in the covenants under our Credit Facilities and the Notes, with which we must comply to avoid default or to make certain dividend and other payments, investments or be able to incur additional debt. Although we
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believe these measures are useful for investors for the same reasons, we recommend users of the financial statements to note these measures are not a substitute for U.S. GAAP financial measures or disclosures. We provide reconciliations of these non-GAAP measures to the corresponding most closely related U.S. GAAP measure.
Adjusted Revenues
We present Adjusted Revenues, which excludes the impact of the deferred revenues purchase accounting adjustment (recorded in connection with the 2016 Transaction) and the revenues from the IPM Product Line prior to its divestiture, because we believe it is useful to readers to better understand the underlying trends in our operations.
Our presentation of Adjusted Revenues is presented for informational purposes only and is not necessarily indicative of our future results. You should compensate for these limitations by relying primarily on our U.S. GAAP results and only using Adjusted Revenues for supplementary analysis.
The following table presents our calculation of Adjusted Revenues for the years ended December 31, 2018 and 2017 and a reconciliation of this measure to our Revenues, net for the same periods:
Years Ended December 31,
Variance
(in millions, except percentages)
2018
2017
$
%
Revenues, net
$ 968.5 $ 917.6 $ 50.9 6 %
Deferred revenues purchase accounting adjustment
3.2 49.7 (46.5 ) (94 )%
Revenues attributable to IPM Product Line
(20.5 ) (31.9 ) 11.4 (36 )%
Adjusted Revenues
$ 951.2 $ 935.4 $ 15.8 2 %
Standalone Adjusted EBITDA
We believe Standalone Adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate our competitors and to measure the ability of companies to service their debt. Our definition of and method of calculating Standalone Adjusted EBITDA may vary from the definitions and methods used by other companies, which may limit their usefulness as comparative measures. Specifically, we calculate Standalone Adjusted EBITDA by using net (loss) income before provision for income taxes, depreciation and amortization and interest income and expense adjusted to exclude acquisition or disposal-related transaction costs (such costs include net income from continuing operations before provision for income taxes, depreciation and amortization and interest income and expense from the IPM Product Line which was divested in October 2018), losses on extinguishment of debt, stock-based compensation, unrealized foreign currency gains/(losses), Transition Services Agreement costs, separation and integration costs, transformational and restructuring expenses, acquisition-related adjustments to deferred revenues, non-cash income/(loss) on equity and cost method investments, non-operating income or expense, the impact of certain non-cash and other items that are included in net income for the period that the Company does not consider indicative of its ongoing operating performance, certain unusual items impacting results in a particular period to more accurately reflect management’s view of the recurring profitability of the business, the difference between annualized run-rate savings and savings realized during that same fiscal year as well as the difference in the Company’s actual standalone costs incurred relative to the steady state standalone cost estimate that the Company expects to achieve after completion of the Transition and optimization of the standalone functions by 2021. We also monitor Standalone Adjusted EBITDA because the Credit Agreement governing our Credit Facilities (as defined below) contains certain covenants (including a maintenance covenant based on leverage and covenants governing debt incurrence based on coverage of fixed charges), which utilize a measure substantially identical to Standalone Adjusted EBITDA.
Our presentation of Standalone Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety or at all. In addition, because of these limitations, except to the extent of its impact under the Credit Agreement, Standalone Adjusted EBITDA should not be considered as measures of
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liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations. You should compensate for these limitations by relying primarily on our U.S. GAAP results and only use Standalone Adjusted EBITDA for supplementary analysis.
The following table presents our calculation of Standalone Adjusted EBITDA for the years ended December 31, 2018 and 2017 and reconciles these measures to our Net loss for the same periods:
Years Ended December 31,
(in millions)
2018
2017
Net loss
$ (242.2 ) $ (263.9 )
(Benefit) provision for income taxes
5.7 (21.3 )
Depreciation and amortization
237.2 228.5
Interest, net
130.8 138.2
Transition Services Agreement costs (1)
55.8 89.9
Transition, transformation and integration expense (2)
69.2 86.8
Excess standalone costs (3)
25.4 (24.6 )
Deferred revenues adjustment ( 4 )
3.2 49.7
Transaction related costs ( 5 )
2.5 2.2
Share-based compensation expense
13.7 17.7
Gain on sale of IPM Product Line
(36.1 )
Tax indemnity asset ( 6 )
33.8
IPM adjusted operating margin ( 7 )
(5.9 ) (6.8 )
Cost savings (8)
12.7 9.7
Other (9) 5.1 (1.3 )
Standalone Adjusted EBITDA
310.9 304.8
(1)
Includes accruals for payments to Thomson Reuters under the Transition Services Agreement. These costs are expected to decrease substantially in 2019, as we are in the final stages of implementing our standalone company infrastructure.
(2)
Includes costs incurred in connection with and after the 2016 Transaction relating to the implementation of our standalone company infrastructure and related cost-savings initiatives. These costs include mainly transition consulting, technology infrastructure, personnel and severance expenses relating to our standalone company infrastructure, which are recorded in Transition, integration, and other line-item of our income statement, as well as expenses related to the restructuring and transformation of our business following the 2016 Transaction, mainly related to the integration of separate business units into one functional organization and enhancements in our technology.
(3)
Reflects the difference between our actual standalone company infrastructure costs (including the additional costs associated with the migration of our technology systems to Amazon Web Services or our own systems), and our estimated steady state standalone operating costs, which were as follows:
Years Ended December 31,
(in millions)
2018
2017
Actual standalone company infrastructure costs
153.6 97.1
Steady state standalone cost estimate
(128.2 ) (121.7 )
Excess standalone costs
25.4 (24.6 )
(4)
Reflects deferred revenues fair value accounting adjustment arising from purchase price allocation in connection with the 2016 Transaction. See “ — Factors Affecting the Comparability of Our Results of Operations — 2016 Transaction and Transition to Operations as a Standalone Business — Purchase Accounting Impact of the 2016 Transaction .”
(5)
Includes consulting and accounting costs associated with acquisitions and the sale of the IPM Product Line.
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(6)
Reflects the write down of a tax indemnity asset.
(7)
Reflects the IPM Product Line’s operating margin, excluding amortization and depreciation, prior to its divestiture in October 2018.
(8)
Reflects the estimated annualized run-rate cost savings, net of actual cost savings realized, related to restructuring and other cost savings initiatives undertaken during the period (exclusive of any reductions in our estimated standalone operating costs).
(9)
Includes primarily the net impact of foreign exchange gains and losses related to the re-measurement of balances and other one-time adjustments.
Liquidity and Capital Resources
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, capital expenditures, debt service, acquisitions, other commitments and contractual obligations. Our principal sources of liquidity include cash from operating activities, cash and cash equivalents on our consolidated balance sheet and amounts available under our Revolving Credit Facility. We consider liquidity in terms of the sufficiency of these resources to fund our operating, investing and financing activities for a period of twelve months.
Our cash flows from operations are generated primarily from payments from our subscription customers. As described above, the standard term of a subscription is typically twelve months. When a customer enters into a new subscription agreement, or submits a notice to renew their subscription, we typically invoice for the full amount of the subscription period, record the balance to deferred revenues, and ratably recognize the deferral throughout the subscription period. As a result, we experience cash flow seasonality throughout the year, with a heavier weighting of operating cash inflows occurring during the first half, and particularly first quarter, of the year, when most subscription invoices are sent, as compared to the second half of the year.
We require and will continue to need significant cash resources to, among other things, meet our debt service requirements under the Credit Facilities, the Notes and any future indebtedness, fund our working capital requirements, make capital expenditures (including related to product development), and expand our business through acquisitions. Based on our forecasts, we believe that cash flow from operations, available cash on hand and available borrowing capacity under our Revolving Credit Facility will be adequate to service debt, meet liquidity needs and fund necessary capital expenditures for at least the next 12 months. Our future capital requirements will depend on many factors, including the number of future acquisitions, data center infrastructure investments, and the timing and extent of spending to support product development efforts. We could be required, or could elect, to seek additional funding through public or private equity or debt financings, however additional funds may not be available on terms acceptable to us.
As of December 31, 2018, we had cash and cash equivalents of  $25.6 million. We had approximately $2,029.0 million of debt as of December 31, 2018, consisting primarily of  $1,484.0 million in borrowings under our Term Loan Facility, $500 million in outstanding principal of Notes and $45.0 million of borrowings under our Revolving Credit Facility. See “— Debt Profile ” below.
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Cash Flows
The following table discloses our consolidated cash flows provided by (used in) operating, investing and financing activities for the periods presented:
Years Ended December 31,
(in millions)
2018
2017
Net cash provided by (used in) operating activities
$ (26.1 ) $ 6.7
Net cash provided by (used in) investing activities
11.9 (40.2 )
Net cash provided by (used in) financing activities
(32.6 ) 22.8
Effect of exchange rates
(5.2 ) 3.2
Decrease in cash and cash equivalents
(52.0 ) (7.5 )
Cash and cash equivalents beginning of the year
77.5 85.0
Cash and cash equivalents end of the year
$ 25.6 $ 77.5
Cash Flows Provided by (Used in) Operating Activities
Net cash used in operating activities was $26.1 million in 2018 compared to net cash provided by operating activities of  $6.7 million in 2017. The $32.8 million negative change in 2018 was primarily due to a $27.2 million change in operating working capital. Accounts receivable increased due to price increases across our product lines along with a slight increase in the aging of the accounts, compared to the prior year change, reflecting strong collections efforts in 2017. Deferred revenues increased in both 2018 and 2017 reflecting continued increases in sales year over year. Accounts payable continues to decrease, reflecting the shortening of our accounts payable outstanding period to a normalized level, compared to the prior year backlog in payments. Excluding the reduction in Accrued expenses for the IPM Product Line Divesture, the activity in both years was consistent. While the current year change was minimal, the 2017 change in Other assets is a result of sales commission capitalization in connection with the adoption of ASC 606.
Cash Flows Provided by (Used in) Investing Activities
Net cash provided by investing activities was $11.9 million in 2018, reflecting $80.9 million in net proceeds from the IPM Product Line divestiture (net of restricted cash and cash included in normalized working capital, as well as a working capital adjustment of  $6.1 million), partially offset by $45.4 million in capital expenditures and $23.5 million in acquisitions, mainly TradeMarkVision and Kopernio. Net cash used in investing activities was $40.2 million in 2017, reflecting $37.8 million in capital expenditures and $7.4 million in acquisitions offset by $5.0 million in proceeds from the sale of an equity method investment. Our capital expenditures in both 2018 and 2017 consisted primarily of capitalized labor, consulting and other costs associated with product development.
Cash Flows Provided by (Used in) Financing Activities
Net cash used in financing activities was $32.6 million in 2018, reflecting mainly $31.7 million in net repayments of debt under our Credit Facilities, mainly driven by an excess cash repayment of  $31.4 million following the IPM Product Line divestiture, standard recurring principle repayments of  $15 million and $30 million repayment of borrowings on the Revolving Credit Facility offset by $45 million draw on the same facility in the second half of 2018. Net cash provided by financing activities was $22.8 million in 2017, reflecting mainly $15.0 million in net borrowings under our Credit Facilities and $9.1 million in proceeds from the issuance of equity related to management.
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Debt Profile
Notes
In October 2016, we issued $500 million in aggregate principal amount of Notes maturing in October 2024 bearing interest at 7.875% per annum, payable semi-annually in April and October of each year. The Notes were issued in connection with the 2016 Transaction and the proceeds used to partially finance the acquisition of Clarivate in October 2016. The Notes are guaranteed on a senior unsecured basis by our wholly owned domestic restricted subsidiaries, and by each of our foreign restricted subsidiaries that is an obligor under the Credit Facilities.
We have the option to redeem the Notes, in whole or in part, at any time on or after October 15, 2019 at a fixed price of 103.938%, plus accrued and unpaid interest to the date of the purchase. After the initial voluntary redemption date, the price declines ratably until it reaches par in October 2021.
The indenture governing the Notes contains covenants which, among other things, limit the incurrence of additional indebtedness (including acquired indebtedness), issuance of certain preferred stock, the payment of dividends, making restricted payments and investments, the purchase or acquisition or retirement for value of any equity interests, the provision of loans or advances to restricted subsidiaries, the sale or lease or transfer of any properties to any restricted subsidiaries, the transfer or sale of assets, and the creation of certain liens. As of the date of this proxy statement/prospectus, we believe we were in compliance with the indenture covenants.
Credit Facilities
In connection with the 2016 Transaction, certain of our subsidiaries and certain Onex Corporation subsidiaries entered into a $175 million revolving credit facility, $45.0 million of which had been drawn and outstanding as of December 31, 2018, and a $1,550 million term loan facility, $1,484.0 million of which was outstanding at December 31, 2018. The Revolving Credit Facility carries an interest rate equal to the one-month LIBOR rate plus 3.25% per annum or an alternate base rate (“ABR”) plus a margin of 2.25% per annum, as applicable, depending on the type of borrowing, and matures on October 3, 2021. The interest rate margins under the Revolving Credit Facility are subject to decrease upon the achievement of certain total first lien net leverage ratios (as the term is used in the Credit Agreement). The loans made under the Revolving Credit Facility may be borrowed, repaid and reborrowed prior to the maturity of the Revolving Credit Facility. Our ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, delivery of required notices, accuracy of the representations and warranties contained in the Credit Agreement and the absence of any default or event of default under the Credit Agreement.
The Term Loan Facility initially consisted of a $651 million borrowing by Camelot Finance LP, an indirect subsidiary of Onex Corporation (the “US Tower Borrower”), and an $899 million borrowing by Camelot Cayman LP, an indirect subsidiary of Onex Corporation (the “FHC Tower Borrower” and, together with the US Tower Borrower, the “Tower Borrowers”). The proceeds of the term loans to Tower Borrowers were, in turn, loaned on to us with identical principal amounts and substantially similar repayment terms.
The Credit Agreement was amended on April 6, 2017 and again on November 16, 2017 in order to reduce the margins under the Term Loan Facility, which currently stands at LIBOR plus 3.25% per annum (with a 1.00% LIBOR floor) or ABR plus 2.25% per annum, as applicable, and to reset the prepayment premium of 101% (which expired on May 20, 2018) on certain prepayments and amendments of the Term Loan Facility in connection with re-pricing events (“Amended Term Loan Facility”). Except as noted above, all other terms of the Amended Term Loan Facility are substantially similar to the Term Loan Facility.
On December 31, 2017, the US Tower Borrower assigned its obligations under the Credit Agreement to certain other borrowers. Upon assumption of the US Tower Borrower’s obligations by the other borrowers under the Credit Agreement, US Tower Borrower was released from its obligations under our Credit Agreement. Prior to the consummation of the Transactions, we expect the FHC Tower Borrower to assign
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its obligations under the Credit Agreement to certain other borrowers. Upon assumption of the FHC Tower Borrower’s obligations by the other borrowers under the Credit Agreement, FHC Tower Borrower will be released from its obligations under our Credit Agreement.
Principal repayments under the Amended Term Loan Facility are due quarterly in an amount equal to 0.25% of the aggregate outstanding principal amount borrowed under the Amended Term Loan Facility, in an amount equal to the aggregate outstanding principal amount on such date, together in each case, with accrued and unpaid interest.
The Credit Facilities are secured by substantially all of our assets and the assets of all of our U.S. restricted subsidiaries and certain of our non-U.S. subsidiaries, including those that are or may be borrowers or guarantors under the Credit Facilities, subject to customary exceptions. The Credit Agreement governing the Credit Facilities contains customary events of default and restrictive covenants that limit us from, among other things, incurring certain additional indebtedness, issuing preferred stock, making certain restricted payments and investments, certain transfers or sales of assets, entering into certain affiliate transactions or incurring certain liens. These Credit Agreement limitations are subject to customary baskets, and the limitations on debt incurrence and issuance of preferred stock will not apply to the extent that we maintain a consolidated coverage ratio of Consolidated EBITDA (as defined in the Credit Agreement), a measure substantially similar to our Standalone Adjusted EBITDA disclosed above under “— Certain Non-GAAP Measures ”, to interest and other fixed charges on certain debt (as defined in the Credit Agreement) of 2.00 to 1.00. In addition, the Credit Agreement requires us to comply with a maintenance covenant pursuant to which, as of the first quarter of 2019, we must not exceed a consolidated leverage ratio of net senior secured consolidated indebtedness to consolidated EBITDA (each term as defined under the Credit Agreement) of 7.00 to 1.00. As of December 31, 2018, our consolidated coverage ratio was 2.55 to 1.00 and our consolidated leverage ratio was 4.83 to 1.00. On a pro forma basis, giving effect to the consummation of the Transactions, including the cash proceeds and repayment of debt described above as of December 31, 2018 our consolidated coverage ratio (calculated as Standalone Adjusted EBITDA, which is substantially identical to consolidated EBITDA as defined under the Credit Agreement, divided by interest expense, in each case for the preceding 12 months), would have been 3.55 to 1.00 and our consolidated leverage ratio (calculated as total outstanding first-lien debt divided by Standalone Adjusted EBITDA) would have been 2.74 to 1.00. The leverage ratio covenant calculation of outstanding net senior secured consolidated indebtedness excludes our obligations under the Notes and the Company’s obligations under the Tax Receivable Agreement.
Commitments and Contingencies
Our contingent liabilities consist primarily of letters of credit and performance bonds and other similar obligations in the ordinary course of business.
Additionally, the Company has agreed to pay the former shareholders of acquired companies certain amounts in conjunction with the Publons, TradeMarkVision and Kopernio acquisitions. Regarding the Publons acquisition, the Company agreed to pay the former shareholders up to an additional $9.5 million through 2020, of which $2.5 million was paid in 2018. Regarding the TradeMarkVision acquisition, the Company agreed to pay former shareholders earn-out payments through 2020. Regarding the Kopernio acquisition, the Company agreed to pay contingent consideration of up to $3.5 million through 2021. Amounts payable are contingent upon Publons’, TrademarkVision’s and Kopernio’s achievement of certain milestones and performance metrics. As of December 31, 2018, the Company had an outstanding liability for Publons of  $3.0 million related to the estimated fair value of this contingent consideration, of which $1.6 million, was included in Accrued expenses and Other current liabilities, and $1.4 million, was included in Other non-current liabilities in the Consolidated Balance Sheets. As of December 31, 2018, the Company had an outstanding liability for TradeMarkVision of  $4.1 million related to the estimated fair value of this contingent consideration, which compensation earn-out was included in Other non-current liabilities in the Consolidated Balance Sheets. As of December 31, 2018, the Company has recognized over the concurrent service period an outstanding liability for Kopernio of  $0.7 million related to the estimated fair value of this contingent compensation earn-out. The liability is included in Accrued expenses and other current liabilities in the consolidated balance sheets.
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While we wrote down our $33.8 million tax indemnity asset in 2018, as discussed above, based on a dispute with the indemnitor, we believe we are contractually entitled to the tax indemnity and intend to pursue our rights vigorously.
Off Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements and do not have any holdings in variable interest entities.
Contractual Obligations
We have various contractual obligations and commercial commitments that are recorded as liabilities in our financial statements. Other items, such as purchase obligations and other executory contracts, are not recognized as liabilities in our consolidated financial statements, but are required to be disclosed.
In the table below, we set forth our significant enforceable and legally binding obligations and future commitments as of December 31, 2018.
Payments Due by Period
(in millions)
Total
Less than 1 Year
1 to 3 Years
3 to 5 Years
More Than
5 Years
Long-term debt, including interest (1)
$ 2,708.8 $ 202.4 $ 293.1 $ 1,673.9 $ 539.4
Operating Leases (2)
129.6 22.1 36.8 30.3 40.4
Purchase Obligations (3)
57.2 24.7 32.5
Transition Services Agreement (4)
9.6 9.6
Total
$ 2,905.2 $ 258.8 $ 362.4 $ 1,704.2 $ 579.8
(1)
This amount does not reflect our intention to repay up to approximately $649.5 million of debt under our Term Loan Facility (assuming no holder of Churchill’s public shares exercises redemption rights as described in this proxy statement/prospectus) upon the consummation of the Transactions from the anticipated increase in available cash of approximately $710 million. This amount also includes interest, which for the floating rate portion of our debt has been calculated based on the applicable base rates (i.e., LIBOR) in effect as of December 31, 2018.
(2)
Our operating lease obligations include future minimum lease payments under all our non-cancellable operating leases with an initial term in excess of one year. We adopted the new accounting standard for leases, ASC 842, on January 1, 2019, under which operating leases are to be recorded as balance sheet liabilities, with a corresponding right of use asset. See Note 3 to our audited consolidated financial statements included elsewhere in this proxy statement/prospectus.
(3)
Includes purchase obligations, primarily for cloud computing services and software licenses, pursuant to agreements to purchase goods and services that are enforceable, legally binding, and specify significant terms, including fixed or minimum quantities to be purchased, fixed minimum or variable pricing provisions, and the approximate timing of the transactions. Purchase orders made in the ordinary course of business are excluded from the above table. Any amounts for which we are liable are reflected in our Consolidated Balance Sheets as Accounts payable or Accrued expenses.
(4)
The Transition Services Agreement will expire according to its terms in September 2019. See “ — Factors Affecting the Comparability of Our Results of Operations — 2016 Transaction and Transition to Operations as a Standalone Business .”
The Company expects to enter into the Tax Receivable Agreement prior to the consummation of the Mergers. We preliminarily estimate the fair value of the Company’s Tax Receivable Agreement liability at approximately $225.6 million, based on an estimated gross value of Covered Tax Assets (as defined in the Tax Receivable Agreement) of  $565.1 million. Under the Tax Receivable Agreement, the aggregate reduction in income taxes payable will be computed by comparing the actual tax liability of Camelot Holdings (Jersey) Limited and its subsidiaries with the estimated tax liability of applicable entities had such entities not been able to utilize the Covered Tax Assets, taking into account several assumptions including,
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for example, that the relevant entities will pay U.S. state and local taxes at a rate of 7%, the tax assets existing at the time of the Company’s entry into the Tax Receivable Agreement are deemed to be utilized and give rise to a tax savings before certain other tax benefits, and certain asset or equity transfers by certain of the Company’s subsidiaries will be treated under the Tax Receivable Agreement as giving rise to tax benefits associated with the Covered Tax Assets implicated by such asset or equity transfers. Payments under the Tax Receivable Agreement will generally be made annually in cash, and the amounts payable will be subject to interest from the due date (without extensions) of the applicable tax filing that reflects a covered savings until the payment under the Tax Receivable Agreement is made. Tax Receivable Agreement payments are expected to commence in 2021 (with respect to taxable periods ending in 2019) and will be subject to deferral, at the Company’s election, for payment amounts in excess of  $30 million for payments to be made in 2021 and 2022, but will not be subject to deferral thereafter. Amounts deferred under the preceding sentence will accrue interest until paid in accordance with the terms of the Tax Receivable Agreement. The Tax Receivable Agreement is subject to certain events of default that may give rise to an acceleration of the Company’s obligations under the Tax Receivable Agreement. The amount and timing of Tax Receivable Agreement payments, however, may vary based on a number of factors, including the amount, character and timing of our subsidiaries’ taxable income in the future, and any successful challenges to our tax positions. Consequently, we are unable to reliably estimate the timing or amount of payments expected to be made under the Tax Receivable Agreement. See “—  Risk Factors — In certain cases, payments made by the Company under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits realized in respect of the Covered Tax Assets.
The Tax Receivable Agreement may, subject to certain conditions and deferral rights of the TRA Party Representative, be terminated by us at any time. Upon any termination, our obligations under the Tax Receivable Agreement would be accelerated. An acceleration of our obligations under the Tax Receivable Agreement will generally result in us being required to make a payment to each applicable TRA Party equal to the present value of future Tax Receivable Agreement payments that we would be obligated to make, calculated using certain assumptions. The Tax Receivable Agreement will remain in effect until all such Covered Tax Assets have been used or expired, unless the agreement is terminated early.
In addition, in connection with the Transactions, Onex Partners Advisors LP, an affiliate of Onex, will receive a fee of  $5.4 million and Baring Private Equity Asia Group Limited, an affiliate of Baring, will receive a fee of  $2.1 million. See “ Certain Relationships and Related Person Transactions — Company Related Person Transactions — Consulting Services Agreements .”
Critical Accounting Policies, Estimates and Assumptions
The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes included elsewhere in this report. On an ongoing basis, we evaluate estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We consider the following accounting policies to be critical to understanding our financial statements because the application of these policies requires significant judgment on the part of management, which could have a material impact on our financial statements if actual performance should differ from historical experience or if our assumptions were to change. The following accounting policies include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain. For information on our significant accounting policies, including the policies discussed below, see Note 2 to our audited consolidated financial statements included elsewhere in this proxy statement/prospectus.
Revenues Recognition
We derive revenues from contracts with customers by selling information on a subscription and single transaction basis as well as performing professional services. Our subscription contract agreements contain standard terms and conditions, and most contracts include a one-year subscription, although we may provide a multi-year subscription in certain instances. In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume based discounts, and revenues between contract
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expiration and renewal. We estimate the amount of the variable consideration at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.
Most of our revenues are derived from subscription contract arrangements, which may contain multiple performance obligations. For these arrangements, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. We utilize standard price lists, together with consideration of market conditions, customer demographics, and geographic location, to determine the standalone selling price for most of our products and services, however certain products may not have a standalone selling price that is directly observable, which requires judgement.
See Note 3 to our consolidated financial statements included elsewhere in this proxy statement/​prospectus for further discussion.
Accounts Receivable
Accounts receivable are recorded at the amount invoiced to customers and do not bear interest. We maintain an allowance for doubtful accounts for losses resulting from the inability of specific customers to meet their financial obligations, representing our best estimate of probable credit losses in existing trade accounts receivable. A specific reserve for doubtful receivables is recorded against the amount due from these customers. For all other customers, we recognize reserves for doubtful receivables by evaluating factors such as the length of time receivables are past due, historical collection experience, and the economic and competitive environment. If any of these estimates change or actual results differ from expected results, then an adjustment is recorded in the period in which the amounts become reasonably estimable.
Business Combinations
In a business combination, substantially all identifiable assets, liabilities and contingent liabilities acquired are accounted for using the acquisition method at the acquisition date and are recorded at their respective fair values. One of the most significant estimates relates to the determination of the fair value of these assets and liabilities. The determination of the fair values is based on estimates and judgments made by management. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Measurement period adjustments are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all information for determination of the values of assets acquired and liabilities assumed is received, and is not to exceed one year from the acquisition date.
Goodwill is measured at the acquisition date as the fair value of the consideration transferred (including, if applicable, the fair value of any previously held equity interest and any non-controlling interests) less the net recognized amount (which is generally the fair value) of the identifiable assets acquired and liabilities assumed.
When a business combination involves contingent consideration, we record a liability for the estimated cost of such contingencies when expenditures are probable and reasonably estimable. A significant amount of judgement is required to estimate and quantify the potential liability in these matters. We engage outside experts as deemed necessary or appropriate to assist in the calculation of the liability, however management is responsible for evaluating the estimate. We reassess the estimated fair value of the contingent consideration each financial reporting period over the term of the arrangement. Any resulting changes identified subsequent to the measurement period are recognized in earnings and could have a material effect on our results of operations.
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Other Identifiable Intangible Assets
Other identifiable intangible assets are recorded at fair value upon acquisition and are subsequently carried at cost less accumulated amortization or accumulated impairment for indefinite-lived intangible assets. Where applicable, other identifiable intangible assets are amortized over their estimated useful lives as follows:
Customer relationships
2 – 14 years​
Databases and content
13 – 20 years​
Other
N/A​
Trade names
Indefinite​
The carrying values of other identifiable intangible assets are reviewed for impairment whenever circumstances indicate that their carrying amounts may not be recoverable. The carrying values of indefinite-lived intangible assets are reviewed for impairment annually, or more frequently when circumstances indicate that impairment may have occurred. The test for impairment compares the carrying amounts to the fair value based on current revenues projections of the related operations, under the relief from royalty method. Any excess of the carrying value over the amount of fair value is recognized as an impairment. Any such impairment would be recognized in full in the reporting period in which it has been identified and could have a material adverse effect on our financial condition or results of operations.
Goodwill
We test goodwill annually for impairment in the fourth quarter, or more frequently when circumstances indicate that impairment may have occurred. Goodwill represents the purchase price in excess of the fair value of the net assets acquired in a business combination. If the carrying value of a reporting unit exceeds the implied fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. Our reporting units are one level below the operating segment, as determined in accordance with ASC 350, Intangibles — Goodwill and Other. For the years ended December 31, 2017 and 2018, we identified one reporting unit and five reporting units respectively. The number of reporting units increased during 2018 as a result of the progression from our reliance on transitional services provided by Thomson Reuters, in becoming a standalone entity. This progression led to a change in our reporting structure, revealing five reporting units, over which we performed a reallocation of the implied fair value.
We completed our most recent annual goodwill impairment testing during the fourth quarter of 2018. As a part of our assessment of each reporting unit’s estimated fair value and likelihood of impairment, we include both a quantitative and qualitative evaluation. The impairment test for goodwill consists of a two-step approach at the reporting unit level. In the first step, we assess various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, then we are not required to perform further testing. If the aforementioned qualitative assessment results in concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill. We estimate the fair value of our reporting units using the income approach, which is a change from, the market approach used in the prior year. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated cash flows. Cash flow projections are based on our estimates of revenues growth rates and operating margins. The discount rate is based on the weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and projected cash flows.
Based on the results of the annual impairment test as of October 1, 2018, the fair values of our reporting units exceeded the individual reporting unit’s carrying value, and goodwill was not impaired.
Although no reporting units failed the assessments noted above, the fair value of the Derwent reporting unit approximated its carrying value. The current goodwill impairment analysis incorporates our expectations for moderate sales growth and the overall outlook for the Derwent Product Line was consistent with our long-term projections. We used the same discount rate across all of our reporting units for the income approach. We believe that the reason for the low clearance of the annual impairment test is linked to
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our transition to a standalone entity and the subsequent reassessment of the reporting units during 2018. Upon the reassessment we determined that the Derwent reporting unit contained a disproportionately higher intangible asset balance, which led to a higher carrying amount relative to the other reporting units.
Based on the results of the 2018 annual impairment analysis performed, we have determined that the Derwent reporting unit is at risk of a future goodwill impairment if there are declines in our future cash flow projections or if we are unsuccessful in implementing our revenues growth plans. Additionally, the fair value may be adversely affected by other market factors such as an increase in the discount rate used in the income approach or a decrease in market multiples used in the market approach, or an increase in the carrying value of the reporting unit. Although the current analysis incorporates our expectations for moderate sales growth, there is no guarantee that we will be able to meet our revenues growth plan. The total goodwill associated with this reporting unit was approximately $130.4 million as of December 31, 2018. Based on the latest annual impairment test, the estimated fair value of the Derwent reporting unit is approximately 2% above its carrying value.
Share-Based Compensation
Share-based compensation expense includes cost associated with stock options granted to certain members of key management.
The stock option fair value is estimated at the date of grant using the Black-Scholes option pricing model, which requires management to make certain assumptions of future expectations based on historical and current data. The assumptions include the expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. The expected term represents the amount of time that options granted are expected to be outstanding, based on forecasted exercise behavior. The risk-free rate is based on the rate at grant date of zero-coupon U.S. Treasury Notes with a term comparable to the expected term of the option. Expected volatility is estimated based on the historical volatility of comparable public entities’ stock price from the same industry. Our dividend yield is based on forecasted expected payments, which are expected to be zero for the immediate future. We recognize compensation expense over the vesting period of the award on a straight-line basis.
Derivative Financial Instruments
We may use interest rate swaps to manage risks generally associated with interest rate fluctuations. Our derivative financial instruments are used as risk management tools and not for speculative or trading purposes.
We have interest rate swaps with counterparties to reduce our exposure to variability in cash flows relating to interest payments on a portion of our outstanding Term Loan Facility. We apply hedge accounting and have designated these instruments as cash flow hedges of the risk associated with floating interest rates on designated future quarterly interest payments. Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets. Any ineffectiveness is recorded in earnings. Amounts in accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transactions affect earnings, or upon termination of the hedging relationship
Fair Value of Financial Instruments
We disclose and recognize the fair value of our assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
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The following valuation techniques are used to measure fair value for assets and liabilities:
Level 1 —
Quoted market prices in active markets for identical assets or liabilities;
Level 2 —
Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and
Level 3 —
Unobservable inputs for the asset or liability, which are valued based on management’s estimates of assumptions that market participants would use in pricing the asset or liability.
Movements in the fair value of financial instruments could have a material effect on the financial condition or results of operations.
Taxation
Certain items of income and expense are not recognized in our financial statements and income tax returns in the same year, which creates timing differences. These timing differences result in (1) deferred income tax liabilities that create an increase in future income taxes, and (2) deferred income tax assets that create a reduction in future income taxes. Recognition of deferred tax assets is based on management’s belief that it is more likely than not that the income tax benefit associated with certain temporary differences, income tax credits, capital loss carryforwards, and income tax operating loss, would be realized. We record a valuation allowance to reduce the deferred tax assets to equal an amount that is more likely than not to be realized. The amount of the valuation allowance is based on the assessment of future taxable income by tax jurisdiction and tax planning strategies. If the estimate of future taxable income or tax strategies changes at any time, we would record an adjustment to the valuation allowance. Such an adjustment could have a material effect on our financial condition or results of operations.
Changes in tax laws and tax rates could also affect recorded deferred tax assets and liabilities in the future. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. ASC Topic 740, Income Taxes, states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We first record unrecognized tax benefits as liabilities in accordance with ASC 740 and then adjust these liabilities when changes are identified, as a result of the evaluation of new information not previously available at the time of establishing the liability. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available and could have a material effect on the financial condition or results of operations.
Interest accrued related to unrecognized tax benefits and income tax related penalties are included in the provision for income taxes.
Deferred tax is provided on taxable temporary differences arising on investments in non-U.S. subsidiaries and equity method investees, except where we intend, and are able, to reinvest such amounts on a permanent basis.
Pension and Other Post-Retirement Benefits
We provide retirement benefits to certain employees, including defined benefit pension plans. The determination of benefit obligations and expense is based on actuarial models. In order to measure benefit costs and obligations using these models, critical assumptions are made with regard to the discount rate, expected return on assets, and the assumed rate of compensation increases. Other assumptions involve demographic factors such as turnover, retirement, and mortality rates. Changes in material assumptions could materially affect the amounts, particularly the long-term rate of return on plan assets and the rate used to discount the projected benefit obligation. Management reviews these assumptions periodically and updates them when its experience deems it appropriate to do so.
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The discount rate is determined annually by management. For most international markets, the discount rate is based on the results of a modeling process in which the plans’ expected cash flows (based on the plans’ duration as of December 31, 2018 market conditions) is matched with the spot rate from a current yield curve of an index of high quality (Standard Poor’s AA and above) corporate bonds to develop the present value of the expected cash flow, and then determine the discount rate. In India specifically, the discount rate is set based on the yields of the Indian Government bonds, appropriate to the duration of the plan liabilities. As a sensitivity measure, a 100-basis point increase in the discount rate for all of our plans, absent any other changes in assumptions, would result in a $1.6 million decrease in the projected benefit obligation as of December 31, 2018. A 100-basis point decrease in the discount rate would result in a $1.9 million increase in the projected benefit obligation as of December 31, 2018.
We sponsor only one specific plan, the Belgium plan, that has a plan asset. The plan asset has a rate of return guaranteed by the insurance company.
In selecting an expected return on our plan assets, we consider obtaining a rate that is consistent with the level of risk taken, and to target performance rates that meet the standard required by local regulations for our defined benefit plan. The actual return on plan assets will vary from year to year versus this assumption. We believe it is appropriate to use long-term expected forecasts in selecting the expected return on assets. As such, there can be no assurance that our actual return on plan assets will approximate the long-term expected forecasts. Our current strategy is to invest primarily in 100% insurance contracts, that do not have target asset allocation ranges, and a guarantee that the plan asset will always provide a minimum rate of return.
Recently Issued and Adopted Accounting Pronouncements
For recently issued and adopted accounting pronouncements, see Note 3 to our audited consolidated financial statements included elsewhere in this proxy statement/prospectus.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk that changes in market prices, such as foreign currency exchange rates and interest rates, will affect our cash flows or the fair value of our holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.
Foreign Currency Exchange Rate Risk
We are exposed to foreign currency exchange risk related to our transactions and our subsidiaries’ balances that are denominated in currencies other than the U.S. dollar, our functional currency. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations —  Factors Affecting the Comparability of Our Results of Operations — Effect of Currency Fluctuations ” for more information about our foreign currency exchange rate exposure. In accordance with our treasury policy, we seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currencies for our cash inflows and outflows. For example, where commercially feasible, we seek to borrow in the same currencies in which cash flows from operations are generated. In the past, we have used derivatives to hedge foreign currency exchange risk arising from receipts and payments denominated in foreign currencies on a limited basis, primarily in our IPM Product Line, which we divested in October 2018. We do not currently hedge our foreign exchange transaction or translation exposure, but may consider doing so in the future.
Revenues denominated in currencies other than U.S. dollars amounted to $204.5 million, or approximately 21%, of our total revenues for the year ended December 31, 2018. A significant majority of this amount was denominated in euro, British pounds and Japanese yen. A 5% increase or decrease in the value of the euro, British pound and Japanese yen relative to the U.S. dollar would have caused our revenues for the year ended December 31, 2018 to increase or decrease by $9.2 million.
Interest Rate Risk
Our interest rate risk arises from our long-term borrowings at floating interest rates. Borrowings under our Credit Facilities are subject to floating base interest rates, plus a margin. As of December 31, 2018, we had $1,525.0 million of floating rate debt outstanding under the Credit Facilities, consisting of borrowings under the Revolving and Term Loan Facilities for which the base rate was one-month LIBOR (subject, with respect to the Term Loan Facility only, to a floor of 1.00%), which stood at 2.80% at December 31, 2018. Of this amount, we hedged $350.0 million of our principal amount of our floating rate debt under hedges that we deemed effective as of December 31, 2018. As a result, $1,175.0 million of our outstanding long-term debt effectively bore interest at floating rates. A 100 basis point increase or decrease in the applicable base interest rate under the Credit Facilities would have an annual impact of  $13.7 million on our cash interest expense for the year ended December 31, 2018. For additional information on our outstanding debt and related hedging, see Notes 9 and 12 to our audited consolidated financial statements included elsewhere in this proxy statement/prospectus.
It is not clear what impact, if any, the United Kingdom’s anticipated withdrawal from the EU on March 29, 2019 will have on the interest rate on our indebtedness and related derivative instruments. However, there is a risk that if there is no deal, or the deal is detrimental to the United Kingdom, LIBOR could become an unauthorized “third country” benchmark, and neither EU banks, nor their counter parties will be able to reference it. Actions from the ICE Benchmark Administration (the “IBA”), the LIBOR administrator, are currently in process to minimize market disruption in case of a “hard Brexit.” This includes action that the IBA intends to take to ensure that LIBOR can continue to be used, post-Brexit.
In addition, in July 2017 the U.K. Financial Conduct Authority announced its intention to phase out LIBOR rates by the end of 2021. It is not possible to predict the effect of any changes in the methods by which the LIBOR is determined, or any other reforms to LIBOR that may be enacted in the United Kingdom or elsewhere. Such developments may cause LIBOR to perform differently than in the past, including sudden or prolonged increases or decreases in LIBOR, or cease to exist, resulting in the application of a successor base rate under our Credit Facilities, which in turn could have unpredictable effects on our interest payment obligations under our Credit Facilities.
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Credit Risk
We are not currently exposed to market instruments, except for the effective interest rate hedges discussed above. We are, however, exposed to credit risk on our accounts receivable, and we maintain an allowance for potential credit losses. As of December 31, 2018, no single customer accounted for more than 1% of our consolidated revenues. Further, given our subscription based revenues model, where a significant portion of customer obligations are payable to us upfront, and our credit control procedures, we believe that our exposure to customer credit risk is currently limited.
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BENEFICIAL OWNERSHIP OF SECURITIES
Security Ownership of Certain Beneficial Owners and Management of Churchill and Clarivate
The following table sets forth information regarding the beneficial ownership of Churchill common stock and Clarivate ordinary shares as of the record date and immediately following consummation of the Transactions by:

each person known by Churchill to be the beneficial owner of more than 5% of Churchill’s outstanding shares of common stock either on the record date or after the consummation of the Transactions;

each of Churchill’s current executive officers and directors;

all of Churchill’s current executive officers and directors as a group;

each person known by Clarivate to be the beneficial owner of more than 5% of Clarivate’s outstanding ordinary shares either on the record date or after the consummation of the Transactions;

each of Clarivate’s current executive officers and directors;

each person who will become an executive officer or a director of Clarivate upon consummation of the business combination; and

all of Clarivate’s executive officers and directors as a group.
At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Churchill or its securities, the sponsor, the founders, Garden State, the Company or the Company Owners and/or their respective affiliates may purchase Churchill shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from them in the future, or they may enter into transactions with such persons and others to provide them with incentives to acquire shares of Churchill’s common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the public shares outstanding vote in favor of the business combination and that Churchill will have in excess of the required amount of Available Cash to consummate the business combination under the Merger Agreement, when it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with the Company’s consent, the transfer to such investors or holders of Churchill shares or warrants owned by the sponsor, the founders or Garden State for nominal value.
Entering into any such arrangements may have a depressive effect on Churchill common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares it owns, either prior to or immediately after the special meeting. Also, pursuant to the Sponsor Agreement, Jerre Stead (personally or through his designee — JMJS Group-II, LP) and Michael Klein have agreed to purchase from Churchill an aggregate of 1,500,000 shares of common stock of Churchill immediately prior to the closing of the Transactions for an aggregate purchase price of  $15,000,000. Such purchase may, therefore, be at a price per share that is less than the then-current market price of Churchill’s common stock and could also have a depressive effect on the market price of Churchill’s common stock.
As of the date of this proxy statement/prospectus, no agreements dealing with the above have been entered into by the sponsor, the founders, Garden State, the Company, the Company Owners or any of their respective affiliates. Churchill will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal and charter amendments proposal or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
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Name of Beneficial Owner
Pre-Transactions (2)
Post-Transactions (3)
Amount and
Nature of
Beneficial
Ownership
Approximate
Percentage of
Outstanding
Shares of
Common
Stock
Amount and
Nature of
Beneficial
Ownership
Approximate
Percentage of
Outstanding
Ordinary
Shares
Churchill Directors and Executive Officers Pre-Transactions: (1)
Michael Klein (4)
17,250,000 (6 ) 20 %
Jerre Stead (4) (5)
Balakrishnan S. Iyer (5)
Karen G. Mills (5)
Malcolm S. McDermid
Martin S. Broughton (5)
Peter M. Phelan
Sheryl von Blucher (5)
All directors and executive officers prior to the Transactions as a group (eight individuals)
17,250,000 20 %
Churchill Five Percent Holders:
Churchill Sponsor LLC (4)
17,250,000 (6) 20 %
Magnetar Financial LLC (7)
5,500,000 6.4 %
Brahman Capital Corp. (8)
3,632,210 4.2 % (9)
Clarivate Directors and Executive Officers Post-Transactions: (10)
Michael Klein (4)
17,250,000 5.7 %
Jerre Stead (4) (5)
Jay Nadler (11)
3,799,682 1.2 %
Richard Hanks (12)
* *
Stephen Hartman (13)
* *
Anthony Munk (14)
Balakrishnan S. Iyer (5)
Charles E. Moran
Charles J. Neral (15)
* *
Karen G. Mills (5)
Kosty Gilis (16)
Martin Broughton (5)
Matthew Scattarella
Nicholas Macksey
Amir Motamedi (17)
Sheryl von Blucher (5)
All directors and executive officers post-Transactions as a group (16 individuals)
21,813,601 7.2 %
Clarivate Five Percent Holders;
Onex (18)
155,532,391 51.2 %
Baring
60,484,819 19.9 %
Churchill Sponsor (4)
17,250,000 (19) 5.7 %
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*
Less than one percent.
(1)
Unless otherwise indicated, the business address of each of the individuals is c/o Churchill Capital Corp, 640 Fifth Avenue, 12 th Floor, New York, NY 10019.
(2)
The pre-Transactions percentage of beneficial ownership of Churchill in the table above is calculated based on 86,250,000 shares of common stock outstanding as of the record date. The amount of beneficial ownership does not reflect the shares of common stock issuable as a result of Churchill’s warrants as such warrants may not be exercisable within 60 days. Unless otherwise indicated, Churchill believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them prior to the Transactions.
(3)
The post-Transactions percentage of beneficial ownership of Clarivate is calculated based on 303,750,000 ordinary shares outstanding. Such amount assumes that no public stockholders properly elect to redeem their Churchill shares for cash. The amount of beneficial ownership for each individual or entity post-business combination includes ordinary shares issuable as a result of Clarivate’s warrants as such warrants will become exercisable upon consummation of the business combination.
(4)
Michael Klein is the sole stockholder of M. Klein Associates, Inc., which is the managing member of Churchill Sponsor LLC (our sponsor). The shares beneficially owned by Churchill Sponsor LLC may also be deemed to be beneficially owned by Mr. Klein. The shares do not include any of the 1,500,000 shares that Mr. Klein and Mr. Stead (personally or through his designee — JMJS, LP) have agreed to purchase from Churchill pursuant to the Sponsor Agreement.
(5)
Jerre Stead, Sheryl von Blucher, Balakrishnan S. Iyer, Karen G. Mills and Martin Broughton each have an economic interest in shares of our common stock through his or her ownership of a membership interest in our sponsor, but does not beneficially own any of our common stock. The economic interest of these individuals in the founder shares and private placement warrants held by sponsor are as shown below:
Founder Shares
Private Placement
Warrants
Jerre Stead
3,540,963 6,965,000
Sheryl von Blucher
3,282,684 274,000
Balakrishnan S. Iyer
258,279 274,000
Karen G. Mills
258,279 274,000
Martin Broughton
258,279 274,000
(6)
Interests shown consist solely of shares of Class B common stock which are referred to herein as founder shares. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment, as described in our registration statement.
(7)
Based solely upon the Schedule 13G filed by Magnetar Financial LLC with the SEC on February 14, 2019. Beneficial ownership of these shares is shared with Magnetar Capital Partners LP, Supernova Management LLC and Alec N. Litowitz.
(8)
Based solely upon the Schedule 13G filed by Brahmin Capital Corp. with the SEC on February 14, 2019. Beneficial ownership of these shares is shared with Robert J. Sobel and Mitchell A. Kuflik.
(9)
Assumes conversion of all Class B common stock into Class A common stock. Represents 5.3% of Class A common stock outstanding prior to conversion of Class B common stock.
(10)
Unless otherwise indicated, the business address of each of the individuals is c/o Clarivate Analytics Plc, 4th Floor, St. Paul’s Gate, 22-24 New Street, St. Helier, Jersey JE1 4TR.
(11)
Includes 462,422 ordinary shares and 3,337,260 ordinary shares issuable upon the exercise of options exercisable as of or within 60 days of February 27, 2019.
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(12)
Includes 23,781 ordinary shares and 432,298 ordinary shares issuable upon the exercise of options exercisable as of or within 60 days of February 27, 2019.
(13)
Includes 132,120 ordinary shares and 149,296 ordinary shares issuable upon the exercise of options exercisable as of or within 60 days of February 27, 2019.
(14)
Does not include shares of common stock held by funds managed by an affiliate of Onex Corporation. Mr. Munk will be a director of Clarivate after the consummation of the Transactions. Mr. Munk is a managing director of Onex Corporation. Mr. Munk does not have voting or investment power with respect to the shares held by such funds.
(15)
Includes 26,424 ordinary shares.
(16)
Does not include shares of common stock held by funds managed by an affiliate of Onex Corporation. Mr. Gilis is a director of Clarivate. Mr. Gilis is a managing director of Onex Corporation. Mr. Gilis does not have voting or investment power with respect to the shares held by such funds.
(17)
Does not include shares of common stock held by funds managed by an affiliate of Onex Corporation. Mr. Motamedi will be a director of Clarivate after the consummation of the Transactions. Mr. Motamedi is a managing director of Onex Corporation. Mr. Motamedi does not have voting or investment power with respect to the shares held by such funds.
(18)
Includes: (i) 57,612,013 ordinary shares held by Onex Partners IV LP, (ii) 2,848,163 ordinary shares held by Onex Partners IV PV LP, (iii) 398,815 ordinary shares held by Onex Partners IV Select LP, (iv) 1,647,640 ordinary shares held by Onex Partners IV GP LP, (v) 2,122,880 ordinary shares held by Onex US Principals LP, (vi) 53,785,732 ordinary shares held by Onex Partners Holdings Limited S.à r.l., (vii) 3,405,119 ordinary shares held by Onex Advisor Subco LLC and (viii) 33,712,029 ordinary shares held by Onex Camelot Co-Invest LP. Onex Corporation, a corporation whose subordinated voting shares are traded on the Toronto Stock Exchange, and/or Mr. Gerald W. Schwartz, may be deemed to beneficially own the common stock held by (a) Onex Partners IV LP, through Onex Corporation’s ownership of all of the equity of Onex Partners Canadian GP Inc., which owns all of the equity of Onex Partners IV GP Limited, the general partner of Onex Partners IV GP LP, the general partner of Onex Partners IV LP, (b) Onex Partners IV PV LP, through Onex Corporation’s ownership of all of the equity of Onex Partners Canadian GP Inc., which owns all of the equity of Onex Partners IV GP Limited, the general partner of Onex Partners IV GP LP, the general partner of Onex Partners IV PV LP, (c) Onex Partners IV Select LP, through Onex Corporation’s ownership of all of the equity of Onex Partners Canadian GP Inc., which owns all of the equity of Onex Partners IV GP LLC, the general partner of Onex Partners IV Select LP, (d) Onex Partners IV GP LP, through Onex Corporation’s ownership of all of the equity of Onex Partners Canadian GP Inc., which owns all of the equity of Onex Partners IV GP Limited, the general partner of Onex Partners IV GP LP, (e) Onex US Principals LP, through Onex Corporation’s ownership of all of the equity of Onex American Holdings II LLC, which owns all of the equity of Onex American Holdings GP LLC, the general partner of Onex US Principals LP, (f) Onex Partners Holdings Limited S.à r.l., through Onex Corporation’s ownership of all of the equity of Onex American Holdings II LLC, which owns all of the equity of Onex American Holdings Subco LLC, which in turn owns all of the equity of Onex Partners Holdings LLC, which in turn owns all of the equity of Onex Partners Holdings Limited S.à r.l., (g) Onex Advisor Subco LLC, through Gerald W. Schwartz’s indirect control of 1597257 Ontario Inc., which owns all of the voting equity of New PCo II Investments Ltd., which owns all of the equity interest of Onex Advisor Subco LLC and (h) Onex Camelot Co-Invest LP, through Onex Corporation’s ownership of all of the equity of Onex Partners Canadian GP Inc., which owns all of the equity of Onex Partners IV GP Limited, the general partner of Onex Partners IV GP LP, the general partner of Onex Camelot Co-Invest LP. Mr. Gerald W. Schwartz, the Chairman, President and Chief Executive Officer of Onex Corporation, indirectly owns shares representing a majority of the voting rights of the shares of Onex Corporation, and as such may be deemed to beneficially own all of the common stock beneficially owned by Onex Corporation. Mr. Schwartz disclaims such beneficial ownership. The address for Onex Corporation and Mr. Schwartz is 161 Bay Street, Toronto, ON M5J 2S1 Canada.
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(19)
Assumes certain third-party investors do not exercise their right to acquire any of the 200,000 founder shares from our sponsor that they have the right to purchase upon the closing of the Transactions.
Churchill’s initial stockholders, including its officers and directors, beneficially own 20% of its issued and outstanding shares of common stock as of the record date. Because of the ownership block held by Churchill’s initial stockholders, such individuals may be able to effectively exercise control over all matters requiring approval by Churchill’s stockholders, including the election of directors and approval of significant corporate transactions other than approval of its initial business combination.
In a private placement conducted simultaneously with the consummation of the Churchill IPO, the founders, through the sponsor, purchased 18,300,000 warrants.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of Class A common stock issued upon redemption or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreement with Churchill entered into by Churchill’s initial stockholders. If the Transactions are not consummated, those lock-up provisions provide that such securities are not transferable or salable (1) in the case of the founder shares, until the earlier of  (A) one year after the completion of Churchill’s initial business combination and (B) subsequent to Churchill’s initial business combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after Churchill’s initial business combination, or (y) the date following the completion of Churchill’s initial business combination on which Churchill completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of Churchill’s public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and (2) in the case of the private placement warrants and the respective Class A common stock underlying such warrants, until 30 days after the completion of Churchill’s initial business combination, except in each case (a) to Churchill’s officers or directors, any affiliates or family members of any of Churchill’s officers or directors, any members of Churchill’s sponsor, or any affiliates of Churchill’s sponsor, (b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the securities were originally purchased; (f) in the event of Churchill’s liquidation prior to its completion of the initial business combination; (g) by virtue of the laws of Delaware or Churchill’s sponsor’s limited liability company agreement, as amended, upon dissolution of Churchill’s sponsor; or (h) in the event of Churchill’s completion of a liquidation, merger, stock exchange, reorganization or other similar transaction which results in all of its public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property subsequent to Churchill’s completion of its initial business combination; provided, however, that in the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement. In the event the Transactions are consummated, the Sponsor Agreement sets forth the terms of the lock-up provisions, which are described below.
Sponsor Agreement
In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement pursuant to which they have agreed to comply with the provisions of the Merger Agreement applicable to such persons as well as the covenants set forth in the Sponsor Agreement, including voting all shares of common stock of Churchill owned of record by the sponsor and distributable to the founders and Garden State in favor of the Transactions. The Sponsor Agreement provides that the ordinary shares of Clarivate and Clarivate warrants to be issued to such persons in connection with the Mergers will be subject to a three-year lock-up restriction (partially reduced to two years in the event Onex and/or Baring sell any ordinary shares of Clarivate prior to such date). The
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Sponsor Agreement also provides that the ordinary shares of Clarivate to be issued to the sponsor in connection with the Mergers in respect of founder shares and distributable to Jerre Stead, Michael Klein and Sheryl von Blucher and the Clarivate warrants held by the sponsor and available for distribution to such persons and to Garden State will be subject to certain time and performance-based vesting provisions. See the section entitled “ The Business Combination Proposal — Related Agreements — Sponsor Agreement.
Registration Rights Agreement
The Company Owners, the sponsor, the founders and Garden State will be granted certain registration rights, pursuant to the Registration Rights Agreement which will be entered into at or prior to the closing of the Transactions. See the section entitled “ The Business Combination Proposal — Related Agreements — Registration Rights Agreement.
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Churchill Related Person Transactions
In July 2018, the sponsor purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of  $25,000, or approximately $0.002 per share. In August 2018, Churchill effected a stock dividend of 0.125 shares of Class B common stock for each outstanding share of Class B common stock, resulting in Churchill’s initial stockholders holding an aggregate of 12,937,500 founder shares. In September 2018, Churchill effected a further stock dividend of one third of a share of Class B common stock for each outstanding share of Class B common stock, resulting in its initial stockholders holding an aggregate of 17,250,000 founder shares. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon completion of Churchill IPO.
The sponsor, and through the sponsor, the founders and Garden State, purchased an aggregate of 18,300,000 private placement warrants for a purchase price of  $1.00 per warrant in a private placement that will occur simultaneously with the closing of Churchill IPO. As such, the sponsor’s interest in the Churchill IPO was valued at $18,300,000, based on the number of private placement warrants purchased. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of  $11.50 per share, subject to adjustment as provided herein.
Michael Klein, Jerre Stead, Sheryl von Blucher, Balakrishnan S. Iyer, Karen G. Mills and Martin Broughton, each of whom is a director of the company, and Garden State, each has an indirect economic interest in the founder shares and private placement warrants purchased by the sponsor as a result of his, her or its membership interest in the sponsor.
Churchill entered into an Administrative Services Agreement pursuant to which it pays an affiliate of its sponsor a total of  $31,250 per month for office space, administrative and support services. Upon completion of Churchill’s initial business combination or its liquidation, it will cease paying these monthly fees.
The sponsor, officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on its behalf such as identifying potential target businesses and performing due diligence on suitable business combinations, including up to $500,000 for office space rented outside of New York City and personnel hired solely for activities on Churchill’s behalf. Churchill’s audit committee reviews on a quarterly basis all payments that were made by Churchill to its sponsor, officers, directors or its or any of their respective affiliates and determines which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on Churchill’s behalf.
The sponsor loaned Churchill $275,000 under an unsecured promissory note to be used for a portion of the expenses of Churchill IPO. These loans were non-interest bearing, unsecured and were repaid in full out of the proceeds of the Churchill IPO allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, the sponsor, an affiliate of its sponsor or its officers and directors may, but are not obligated to, loan Churchill funds as may be required on terms as to be determined by Churchill and the Company. If Churchill completes its initial business combination, it would repay such loaned amounts out of the proceeds of the trust account released to Churchill. In the event that Churchill’s initial business combination does not close, it may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from Churchill’s trust account would be used for such repayment. None of such loans may be converted into any shares or warrants except that, following any valid termination of the Merger Agreement, up to $1,500,000 of such loans may be redeemed for warrants at a price of   $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to the sponsor. The terms of such loans by the sponsor, an affiliate of its sponsor or its officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the termination of the Merger Agreement, no such loans may be made
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without the Company’s approval. Churchill does not expect to seek loans from parties other than its sponsor, an affiliate of its sponsor or its officers and directors, if any, as Churchill does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in its trust account.
Churchill has engaged the Klein Group to act as its financial advisor in connection with the Mergers. Pursuant to this engagement, Churchill will pay the Klein Group an advisory fee of  $12.5 million, which shall be earned upon the closing of the Mergers ($7.5 million of such fee to be payable upon the closing of the Mergers, $2.5 million of such fee to be payable on January 31, 2020 and the final $2.5 million of such fee to be payable on January 29, 2021). Churchill will also provide a customary indemnity to the Klein Group in connection with this engagement.
Company Related Person Transactions
Consulting Services Agreements
In connection with the 2016 Transaction, the Company entered into a Consulting Services Agreement with Onex Partners Advisor LP, an affiliate of Onex (“Onex Manager”), and a Consulting Services Agreement with Baring Private Equity Asia Group Limited, an affiliate of Baring (“Baring Manager”, and such Consulting Services Agreements, together, the “Consulting Services Agreements”). In exchange for providing the Company with certain ongoing strategic and financing consulting services pursuant to the Consulting Services Agreements, the Company paid (i) Onex Manager $1.4 million and $1.2 million for each of the years ended December 31, 2018 and 2017, respectively, and (ii) Baring Manager $1.0 million and $0.9 million for each of the years ended December 31, 2018 and 2017, respectively. The Consulting Services Agreements provide that the Company will indemnify Onex Manager and Baring Manager against any claims arising out of or in connection with their respective performance under the Consulting Services Agreements and reimburse Onex Manager and Baring Manager for any out-of-pocket legal expenses incurred in connection with the investigation or defense of any such claims. The Consulting Services Agreements also provide that the Company will reimburse Onex Manager and Baring Manager for their reasonable out-of-pocket expenses in connection with their performance of the services under the Consulting Services Agreements. The applicable Consulting Services Agreement terminates when Onex or Baring, as applicable, owns less than 10% of our outstanding voting securities. The Consulting Services Agreements also terminate immediately prior to an initial public offering of the Company or the completion of certain sale transactions involving the Company, unless Onex Manager determines otherwise. In connection with the Transactions, Onex Manager will receive a fee of  $5.4 million and Baring Manager will receive a fee of  $2.1 million. The Consulting Services Agreements will be terminated in connection with the Transactions.
Tax Receivable Agreement
Prior to the business combination, the Company will enter into the Tax Receivable Agreement with the TRA Parties. Our subsidiaries have generated, or are expected to generate, the Covered Tax Assets, which may reduce the actual liability for certain taxes that we and our subsidiaries are required to pay. The Covered Tax Assets include (i) U.S. and U.K. amortization and depreciation deductions, and reductions in applicable taxes attributable to tax basis in certain assets held by the Company and its subsidiaries; (ii) certain net operating losses and tax credits of the Company and its subsidiaries; (iii) tax deductions arising in respect of the financing arrangements of the Company’s subsidiaries; (iv) deductions in respect of prior acquisition transactions; and (v) deductions attributable to imputed interest on payments made under the Tax Receivable Agreement, provided that only the German or Japanese tax attributes to be taken into account under the Tax Receivable Agreement are net operating loss carryforwards, capital loss carryforwards, non-capital losses, net capital losses and disallowed interest expense carryforwards of the Company and its subsidiaries as of the date of the Tax Receivable Agreement. The Tax Receivable Agreement provides for payments to the TRA Parties in an amount equal to 85% of the aggregate reduction in U.S., U.K., German, and Japanese income taxes payable realized (or deemed realized) by the Company and its subsidiaries (using an assumed combined U.S. state and local tax rate of 7%) from the utilization of such Covered Tax Assets.
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The obligations under the Tax Receivable Agreement will be obligations of the Company and are not conditioned upon the TRA Parties maintaining a continued direct or indirect ownership interest in Clarivate. For purposes of the Tax Receivable Agreement, the aggregate reduction in income taxes payable by the Company and its subsidiaries will be computed by comparing the actual tax liability with the hypothetical tax liability of applicable entities had such entities not been able to utilize the Covered Tax Assets, taking into account several assumptions and adjustments, including, for example, that:

the relevant entities will pay U.S. state and local taxes at a rate of 7%, even though the relevant entities’ effective state and local tax rate may be lower;

tax assets existing at the time of the Company’s entrance into the Tax Receivable Agreement are deemed to be utilized and give rise to a tax savings before certain other tax benefits;

certain asset or equity transfers by the Company’s subsidiaries will be treated under the Tax Receivable Agreement as giving rise to tax benefits associated with the Covered Tax Assets implicated by such asset or equity transfers.
The foregoing assumptions and adjustments could cause the Company to be required to make payments under the Tax Receivable Agreement that are significantly greater than the benefits the Company and its subsidiaries realize in respect of the Covered Tax Assets.
The Tax Receivable Agreement will remain in effect until all such Covered Tax Assets have been used or expired, unless the agreement is terminated early, as described below.
We expect that the payments that the Company will make under the Tax Receivable Agreement could be substantial. Depending on the amount and timing of the future earnings of the Company and its subsidiaries and on other factors, including the effect of any limitations imposed on the use the Covered Tax Assets, it is possible that all payments required under the Tax Receivable Agreement could become due within a relatively short period of time. The actual amount and utilization of the Covered Tax Assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the amount, character and timing our subsidiaries’ taxable income in the future.
Payments under the Tax Receivable Agreement in respect of taxable periods ending during a given calendar year are generally due on March 31 of the second following calendar year (i.e., for taxable periods ending in calendar year 2019, March 31, 2021), but interest on such payments will begin to accrue at an assumed interest rate (for periods where the Company or its subsidiaries have a senior revolving credit facility, the highest rate applicable to drawings under such facility) from the filing date (without extensions) of an applicable tax return giving rise to a payment obligation under the Tax Receivable Agreement. Certain late payments under the Tax Receivable Agreement will accrue interest at a higher rate (for periods where the Company or its subsidiaries have a senior revolving credit facility, the highest rate applicable to drawings under such facility plus 100 basis points).
The Tax Receivable Agreement provides that if  (i) at any time, the Company elects an early termination of the Tax Receivable Agreement with approval of our board of directors (including an affirmative vote of at least a majority of the independent directors) and subject to certain deferral rights with respect to such election that may be exercised by the TRA Party Representative, (ii) the Company is in material breach of its obligations under the agreement, (iii) certain credit events described in the Tax Receivable Agreement occur, or (iv) the TRA Parties elect to terminate the Tax Receivable Agreement following certain changes of control, the Company would be required to make an immediate payment equal to the present value of the anticipated future payments under the Tax Receivable Agreement to the applicable TRA Parties. Such payment would be based on certain valuation assumptions, including the assumption that our subsidiaries would have sufficient taxable income and tax liabilities to fully utilize the Covered Tax Assets. The Tax Receivable Agreement also provides that, in the event that a TRA Party does not elect to terminate the Tax Receivable Agreement upon certain changes of control, payments under the Tax Receivable Agreement after any such event would be based on certain valuation assumptions, including the assumption that the Company and its subsidiaries would have sufficient taxable income to fully utilize the Covered Tax Assets. Accordingly, payments under the Tax Receivable Agreement may be made years in advance of the actual realization, if any, of the anticipated future tax benefits associated with the Covered Tax Assets and may be significantly greater than the benefits we realize in respect of the Covered Tax Assets.
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In addition, were the Internal Revenue Service or any other taxing authority to successfully challenge the availability or amount of any of the Covered Tax Assets, the TRA Parties would not reimburse us for any payments previously made under the Tax Receivable Agreement, but future payments under the Tax Receivable Agreement, if any, would be netted against any unreimbursed payments to reflect the result of any such successful challenge by the Internal Revenue Service or such other taxing authority. While the Tax Receivable Agreement includes a mechanism whereby certain payments to be made under the agreement may be placed in escrow pending resolution of a dispute with a taxing authority regarding the amount or availability of Covered Tax Assets, the Company may nevertheless make payments under the Tax Receivable Agreement that it is unable to recoup that are in excess of the payments that would have been made in the absence of the Covered Tax Assets that are subsequently disallowed by a taxing authority.
The Company will have full responsibility over tax matters concerning the Company and its subsidiaries, subject to certain exceptions outlined in the Tax Receivable Agreement. The Company will be required to notify the TRA Party Representative of any audit by a taxing authority, the outcome of which is reasonably expected to affect the TRA Parties rights under the Tax Receivable Agreement. We will not have the right to enter into any settlement of such an audit that is reasonably expected to affect the TRA Parties’ rights and the Tax Receivable Agreement without the consent of the TRA Party Representative (not to be unreasonably withheld, conditioned or delayed).
For so long as the Tax Receivable Agreement remains outstanding, without the prior written consent of the TRA Party Representative (not to be unreasonably withheld, conditioned or delayed), the Company may not enter into any agreement or amendment that would materially restrict (or in the case of amendments, further restrict beyond the restrictions in the Company’s existing financing agreements) its ability to make payments under the Tax Receivable Agreement. In addition, the Company is prohibited under the Tax Receivable Agreement from replacing its existing financing agreements with any senior debt document that does not permit our subsidiaries to make dividends to us to the extent necessary to make the payments under the Tax Receivable Agreement, unless the TRA Party Representative consents.
Certain risks related to the Tax Receivable Agreement are discussed in greater detail above in the section entitled “ Risk Factors .” A form of the Tax Receivable Agreement containing the material terms described above has been filed as an exhibit to this proxy statement/prospectus.
Sponsor Agreement
In connection with the execution of the Merger Agreement, the sponsor, the founders and Garden State entered into the Sponsor Agreement pursuant to which they have agreed to comply with the provisions of the Merger Agreement applicable to such persons as well as the covenants set forth in the Sponsor Agreement, including voting all shares of common stock of Churchill beneficially owned by such persons in favor of the Transactions. See the section entitled “ The Business Combination Proposal — Related Agreements — Sponsor Agreement.
Registration Rights Agreement
The Company Owners, the sponsor, the founders and Garden State will be granted certain registration rights, pursuant to the Registration Rights Agreement which will be entered into at or prior to the closing of the Transactions. See the section entitled “ The Business Combination Proposal — Related Agreements — Registration Rights Agreement.
Director Nomination Agreement
Pursuant to the Director Nomination Agreement, the Designated Shareholder, will have the right to designate up to four nominees for the election to Clarivate’s board of directors for so long as the Shareholder Group own at least 20% of the Initial Shares. The number of nominees that the Designated Shareholder is entitled to nominate under the Director Nomination Agreement is dependent on the number of ordinary shares of Clarivate held by the Shareholder Group at any time. See the section entitled “ The Business Combination Proposal — Related Agreements — Director Nomination Agreement.
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A&R Shareholders Agreement
In connection with execution of the Merger Agreement, Company Owners have agreed to replace the existing Shareholders Agreement of the Company, dated as of October 3, 2016 (the “Original Shareholders Agreement”) with the A&R Shareholders Agreement. The Original Shareholders Agreement will remain in effect until the closing of the Transactions, at which time the A&R Shareholders Agreement will become effective. See the section entitled “ The Business Combination Proposal — Related Agreements — Amended and Restated Shareholders Agreement .”
Other
Vistra USA (IES) LLC, a controlled affiliate of Baring, provides the Company services such as domiciliation, directorship, corporate administration and corporate secretarial support throughout its various jurisdictions worldwide. The Company paid this vendor $0.7 million and $0.4 million for the years ended December 31, 2018 and 2017, respectively.
Andy Augustine, who became the Company’s interim Chief Technology Officer in April 2018, is the co-founder of Protagonist Tech, which has performed application development for the Company. The Company paid this vendor $0.9 million and $0.3 million for the years ended December 31, 2018 and 2017, respectively.
In connection with the Company’s acquisition of Publons, the Company paid a $0.7 million consulting fee to Annette Thomas, a former member of the Company’s board of directors and the current CEO of the Company’s Web of Science product line, for the year ended December 31, 2017.
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DESCRIPTION OF CLARIVATE’S SECURITIES
The following description of the material terms of the share capital of Clarivate following the Transactions includes a summary of specified provisions of the articles of association of Clarivate that will be in effect upon completion of the Transactions. This description is qualified by reference to Clarivate’s articles of association as will be in effect upon consummation of the Transactions, copies of which are attached to this proxy statement/prospectus and are incorporated in this proxy statement/prospectus by reference.
General
Clarivate is a Jersey, Channel Islands public company with limited liability. Its affairs are governed by the articles of association and the Jersey Companies Law. Clarivate’s register of members is kept by Vistra (Jersey) Limited at 4th Floor, St. Paul’s Gate, 22-24 New Street, St. Helier, Jersey JE1 4TR. Our registered office is 4th Floor, St. Paul’s Gate, 22-24 New Street, St. Helier, Jersey JE1 4TR. Our secretary is Stephen Hartman of Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK.
Upon consummation of the Transactions, the authorized share capital of Clarivate will be an unlimited number of no par value shares of any class. As of the date of this proxy statement/prospectus, there are two ordinary shares issued and outstanding and no preferred shares have been issued or are outstanding.
Shares
General
Ogier, Jersey, Channel Islands counsel to Clarivate, has confirmed that all of the issued and outstanding ordinary shares of Clarivate are fully paid and non-assessable. Certificates representing the outstanding ordinary shares of Clarivate will generally not be issued (unless required to be issued pursuant to the articles of association) and legal title to the issued shares is recorded in registered form in the register of members. Holders of ordinary shares of Clarivate have no pre-emptive, subscription, redemption or conversion rights.
Preferred Shares
The board of directors of Clarivate may provide for other classes of shares, including series of preferred shares, out of the authorized but unissued share capital, which could be utilized for a variety of corporate purposes, including future offerings to raise capital for corporate purposes or for use in employee benefit plans. Such additional classes of shares shall have such voting powers (full or limited or without voting powers), designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as may be determined by the board of directors of Clarivate. If any preferred shares are issued, the rights, preferences and privileges of holders of ordinary shares of Clarivate will be subject to, and may be adversely affected by, the rights of the holders of such preferred shares.
Dividends
The holders of ordinary shares of Clarivate are entitled to such dividends as may be declared by the board of directors of Clarivate, subject to the Jersey Companies Law and the articles of association. Dividends and other distributions on issued and outstanding ordinary shares may be paid out of the funds of Clarivate lawfully available for such purpose, subject to any preference of any outstanding preferred shares of Clarivate. Dividends and other distributions will be distributed among the holders of ordinary shares of Clarivate on a pro rata basis.
Voting rights
Each ordinary share of Clarivate entitles the holder to one vote on all matters upon which the ordinary shares of Clarivate are entitled to vote. Voting at any shareholders’ meeting is by way of poll.
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A quorum required for a meeting of shareholders of Clarivate requires the presence in person or by proxy of persons holding in aggregate not less than a simple majority of all voting share capital of Clarivate in issue (provided that the minimum quorum for any meeting shall be two shareholders entitled to vote).
A special resolution will be required for important matters such as an alteration of capital, removal of director for cause, merger or consolidation of Clarivate, change of name or making changes to the articles of association or the voluntary winding up of Clarivate.
An ordinary resolution of the shareholders of Clarivate requires the affirmative vote of a simple majority of the votes cast at a quorate general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast at a quorate general meeting or, in each case, a resolution in writing executed by holders of the number of ordinary shares that would be required to pass the resolution at a meeting at which all the holders were present and voting.
Variation of rights
The rights attached to any class of shares of Clarivate (unless otherwise provided by the terms of issue of that class), such as voting, dividends and the like, may be varied only with the sanction of a special resolution passed at a general meeting or by the written consent of the holders of two-thirds of the shares of that class or with the sanction of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class shall not (unless otherwise provided by the terms of issue of that class) be deemed to be varied by the creation or issue of further shares ranking in priority to or pari passu with such previously existing shares.
Transfer of ordinary shares
Any shareholder may transfer all or any of his or her ordinary shares of Clarivate by an instrument of transfer in the usual or common form or any other form prescribed by the Designated Stock Exchange or as otherwise approved by the board of directors of Clarivate.
In addition, the articles of association prohibit the transfer of shares of Clarivate in breach of the rules or regulations of the Designated Stock Exchange or any relevant securities laws (including the Exchange Act).
Liquidation
On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), assets available for distribution among the holders of ordinary shares of Clarivate shall be distributed among the holders of the ordinary shares of Clarivate on a pro rata basis.
Directors
Appointment and removal
The management of Clarivate is vested in its board of directors. The articles of association provide that there shall be a board of directors consisting of no fewer than two and no greater than 14 directors, unless increased or decreased from time to time by the board of directors or by Clarivate in a general meeting We expect that upon the consummation of the Transactions, the board will consist of 14 directors. So long as shares of Clarivate are listed on the Designated Stock Exchange, the board of directors of Clarivate shall include such number of  “independent directors” as the relevant rules applicable to the listing of any shares on the Designated Stock Exchange require (subject to any applicable exceptions for “controlled” companies).
The directors shall be divided into three (3) classes designated as Class I, Class II and Class III, respectively. At the first annual general meeting of shareholders of Clarivate (expected in 2020), the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual general meeting of shareholders of Clarivate (expected in 2021), the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the
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third annual general meeting of shareholders of Clarivate (expected in 2022), the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual general meeting of shareholders of Clarivate, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual general meeting.
The directors of Clarivate have the power from time to time and at any time to appoint any person as a director to fill a vacancy on the board of directors or as an addition to the existing board of directors, subject to the remaining provisions of the articles of association, the terms of the Director Nomination Agreement and the A&R Shareholders Agreement, applicable law and the listing rules of the Designated Stock Exchange. Any director so appointed shall hold office until the expiration of the term of such class of directors or until his earlier death, resignation or removal.
A director may be removed from office by the holders of ordinary shares of Clarivate by special resolution only for “cause” (as defined in the articles of association). In addition, a director may be removed from office by the board of directors of Clarivate by resolution made by the board of directors for “cause.”
The appointment and removal of directors is subject to the applicable rules of the Designated Stock Exchange and to the provisions of the Director Nomination Agreement and the A&R Shareholders’ Agreement.
The detailed procedures for the nomination of persons proposed to be elected as directors at any general meeting of Clarivate are set out in the articles of association.
Indemnification of directors and officers
To the fullest extent permitted by law, the articles of association provide that the directors and officers of Clarivate shall be indemnified from and against all liability which they incur in execution of their duty in their respective offices, except liability incurred by reason of such director’s or officer’s actual fraud or willful default.
Description of Warrants
Upon consummation of the Transactions, Clarivate will have warrants outstanding to purchase an aggregate of 52,800,000 ordinary shares. Each outstanding whole warrant of Churchill shall automatically represent the right to purchase one ordinary share of Clarivate in lieu of one share of Churchill common stock upon closing of the Transactions at a price of  $11.50 per share, subject to adjustment as discussed below, at any time commencing upon the later of  (i) 30 days after the completion of the Transactions and (ii) September 11, 2019.
The private placement warrants are identical to the public warrants underlying the units sold in the Churchill IPO, except that such private placement warrants will be exercisable for cash (even if a registration statement covering the shares issuable upon exercise of such public warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the initial purchasers or their affiliates.
Clarivate may call the warrants for redemption (excluding the private placement warrants), in whole and not in part, at a price of  $0.01 per warrant:

at any time while the warrants are exercisable;

upon not less than 30 days’ prior written notice of redemption to each warrant holder;

if, and only if, the reported last sale price of Clarivate’s shares equals or exceeds $18.00 per share (as adjusted for splits, dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and

if, and only if, there is a current registration statement in effect with respect to the shares underlying such warrants.
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The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant.
If Clarivate calls the warrants for redemption as described above, its management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
The exercise price and number of ordinary shares issuable on exercise of the warrants shall be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or Clarivate’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares of Clarivate at a price below their respective exercise prices.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of ordinary shares of Clarivate and any voting rights until they exercise their warrants and receive ordinary shares of Clarivate. After the issuance of ordinary shares of Clarivate upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder (together with such holder’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the ordinary shares outstanding.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, Clarivate will, upon exercise, round up to the nearest whole number the number of ordinary shares of Clarivate to be issued to the warrant holder.
Other Jersey, Channel Islands Law Considerations
Purchase of Clarivate’s Own Ordinary Shares
As with declaring a dividend, Clarivate may not buy back or redeem its shares unless its directors who are to authorize the buyback or redemption have made a statutory solvency statement that, immediately following the date on which the buyback or redemption is proposed, Clarivate will be able to discharge its liabilities as they fall due and, having regard to prescribed factors, Clarivate will be able to continue to carry on business and discharge its liabilities as they fall due for the 12 months immediately following the date on which the buyback or redemption is proposed (or until Clarivate is dissolved on a solvent basis, if earlier).
If the above conditions are met, Clarivate may purchase its ordinary shares in the manner described below.
Clarivate may purchase on a stock exchange its own fully paid ordinary shares pursuant to a special resolution of its shareholders.
Clarivate may purchase its own fully paid ordinary shares other than on a stock exchange pursuant to a special resolution of its shareholders, but only if the purchase is made on the terms of a written purchase contract which has been approved in advance by an ordinary resolution of its shareholders. The shareholder from whom Clarivate proposes to purchase or redeem ordinary shares is not entitled to vote in respect of the ordinary shares to be purchased.
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Clarivate may fund a redemption or purchase of its own ordinary shares from any source. It cannot purchase its ordinary shares if, as a result of such purchase, only redeemable ordinary shares would remain in issue.
If authorized by a resolution of its shareholders, any shares that Clarivate redeems or purchases may be held by it as treasury shares. Any shares held by Clarivate as treasury shares may be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferring them. Shares redeemed or purchased by Clarivate are cancelled where Clarivate has not been authorized to hold such shares as treasury shares.
Mandatory Purchases and Acquisitions
The Jersey Companies Law provides that where a person has made an offer to acquire a class or all of Clarivate’s outstanding ordinary shares not already held by the person and has as a result of such offer acquired or contractually agreed to acquire 90% or more of such outstanding ordinary shares, that person is then entitled (and may be required) to acquire the remaining ordinary shares. In such circumstances, a holder of any such remaining ordinary shares may apply to the courts of Jersey for an order that the person making such offer not be entitled to purchase the holder’s ordinary shares or that the person purchase the holder’s ordinary shares on terms different to those under which the person made such offer.
Other than as described below under “ — U.K. City Code on Takeovers and Mergers ,” Clarivate is not subject to any regulations under which a shareholder that acquires a certain level of share ownership is then required to offer to purchase all of Clarivate’s remaining ordinary shares on the same terms as such shareholder’s prior purchase.
Compromises and Arrangements
Where Clarivate and its creditors or shareholders or a class of either of them propose a compromise or arrangement between Clarivate and its creditors or its shareholders or a class of either of them (as applicable), the courts of Jersey may order a meeting of the creditors or class of creditors or of Clarivate’s shareholders or class of shareholders (as applicable) to be called in such a manner as the court directs. Any compromise or arrangement approved by a majority in number present and voting at the meeting representing 75% or more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if sanctioned by the court, is binding upon Clarivate and all the creditors, shareholders or members of the specific class of either of them (as applicable).
Whether the capital of Clarivate is to be treated as being divided into a single or multiple class(es) of shares is a matter to be determined by the court. The court may in its discretion treat a single class of shares as multiple classes, or multiple classes of shares as a single class, for the purposes of the shareholder approval referred to above taking into account all relevant circumstances, which may include circumstances other than the rights attaching to the shares themselves.
U.K. City Code on Takeovers and Mergers
The U.K. City Code on Takeovers and Mergers (the “Takeover Code”) applies, among other things, (i) to an offer for a public company whose registered office is in the Channel Islands and whose securities are admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or any stock exchange in the Channel Islands or the Isle of Man, or (ii) if the company is a public company and is considered by the Panel on Takeovers and Mergers (the “Takeover Panel”), to have its place of central management and control in the United Kingdom or the Channel Islands or the Isle of Man (in each case, a “Code Company”). This is known as the “residency test.” Under the Takeover Code, the Takeover Panel will determine whether Clarivate has its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man by looking at various factors, including the structure of Clarivate’s board of directors, the functions of the directors, and where they are resident.
If at the time of a takeover offer, the Takeover Panel determines that the residency test is satisfied and Clarivate has its place of central management and control in the United Kingdom, it would be subject to a number of rules and restrictions, including but not limited to the following: (i) Clarivate’s ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) Clarivate might not,
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without the approval of its shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) Clarivate would be obliged to provide equality of information to all bona fide competing bidders. The Takeover Code also contains certain rules in respect of mandatory offers for Code Companies. Under Rule 9 of the Takeover Code, if a person:

acquires an interest in shares of a Code Company that, when taken together with shares in which persons acting in concert with such person are interested, carry 30% or more of the voting rights of the Code Company; or

who, together with persons acting in concert with such person, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights in the Code Company, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested,
the acquirer, and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer (or provide a cash alternative) for the Code Company’s outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous 12 months.
Upon completion of this business combination, Clarivate expects a majority of its Board to reside in the United Kingdom. Therefore, based upon its current and intended plans for its directors and management, for the purposes of the Takeover Code, Clarivate anticipates that the residency test will be met and that Clarivate will be considered to have its place of central management and control inside the United Kingdom, the Channel Islands or the Isle of Man. Therefore, the Takeover Code should apply to Clarivate. It is possible that in the future changes in the Board’s composition, changes in the Takeover Panel’s interpretation of the Takeover Code, or other events may cause the Takeover Code not to apply to Clarivate.
Jersey Regulatory Matters
The Jersey Financial Services Commission (the “JFSC”) has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958 to the issue of Clarivate’s ordinary shares. The JFSC is protected by the Control of Borrowing (Jersey) Law 1947 against any liability arising from the discharge of its functions under that law.
A copy of this proxy statement/prospectus has been delivered to the Jersey Registrar of Companies in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002 and the Jersey Registrar of Companies has given, and has not withdrawn, his consent to its circulation.
It must be distinctly understood that, in giving these consents, neither the Jersey Registrar of Companies nor the JFSC takes any responsibility for the financial soundness of Clarivate or for the correctness of any statements made, or opinions expressed, with regard to it. If you are in any doubt about the contents of this proxy statement/prospectus, you should consult your stockbroker, bank manager, solicitor, accountant, or other financial adviser.
The price of securities and the income from them can go down as well as up. Nothing in this proxy statement/prospectus or anything communicated to holders or potential holders of any of Clarivate’s ordinary shares (or interests in them) by or on behalf of Clarivate is intended to constitute or should be construed as advice on the merits of the purchase of or subscription for any ordinary shares (or interests in them) for the purposes of the Financial Services (Jersey) Law 1998.
Enforcement of Civil Liabilities
U.S. laws do not necessarily extend either to us or our officers or directors. We are incorporated under the laws of the Jersey, Channel Islands. Some of our directors and officers reside outside of the United States. Substantially all of the assets of both us and our directors and officers are located outside the United States. As a result, it may not be possible for investors to effect service of process on either us or our
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officers and directors within the United States, or to enforce against these persons or us, either inside or outside the United States, a judgment obtained in a U.S. court predicated upon the civil liability provisions of the federal securities or other laws of the United States or any U.S. state.
We have appointed Vistra USA (IES), LLC, as our agent to receive service of process with respect to any action brought against us in the United States under the federal securities laws of the United States or of the laws of any state of the United States.
A judgment of a U.S. court is not directly enforceable in Jersey, but constitutes a cause of action which may be enforced by Jersey courts provided that:

the applicable U.S. courts had jurisdiction over the case, as recognized under Jersey law;

the judgment is given on the merits and is final, conclusive and non-appealable;

the judgment relates to the payment of a sum of money, not being taxes, fines or similar governmental penalties;

the defendant is not immune under the principles of public international law;

the same matters at issue in the case were not previously the subject of a judgment or disposition in a separate court;

the judgment was not obtained by fraud; and

the recognition and enforcement of the judgment is not contrary to public policy in Jersey.
Jersey courts award compensation for the loss or damage actually sustained by the plaintiff. Although punitive damages are generally unknown to the Jersey legal system, there is no prohibition on them either by statute or customary law. Whether a particular judgment may be deemed contrary to Jersey public policy depends on the facts of each case, though judgments found to be exorbitant, unconscionable, or excessive will generally be deemed as contrary to public policy. Moreover, certain defendants may qualify for protection under Protection of Trading Interests Act 1980, an act of the U.K. extended to Jersey by the Protection of Trading Interests Act 1980 (Jersey) Order, 1983. This Act provides that a qualifying defendant is not liable for multiple damages, in excess of that required for actual compensation. A “qualifying defendant” for these purposes is a citizen of the U.K. and its Colonies (as defined in the Act), a corporation or other limited liability entity organized under the laws of the U.K., Jersey or other territory for whose international relations the U.K. is responsible or a person conducting business in Jersey.
Jersey courts cannot enter into the merits of the foreign judgment and cannot act as a court of appeal or review over the foreign courts. It is doubtful that an original action based on U.S. federal or state securities laws could be brought before Jersey courts. In addition, a plaintiff who is not resident in Jersey may be required to provide a security bond in advance to cover the potential of the expected costs of any case initiated in Jersey. In addition, Clarivate has been further advised by our legal counsel in Jersey, that it is uncertain as to whether the courts of Jersey would entertain original actions or enforce judgments from U.S. courts against us or our officers and directors which originated from actions alleging civil liability under U.S. federal or state securities laws.
Material Differences between Rights of Holders of Clarivate’s Securities and Rights of Holders of Churchill’s Securities
Jersey, Channel Islands, companies are governed by the Jersey Companies Law. The Jersey Companies Law differs from laws applicable to Delaware corporations and their shareholders. Set forth below is a summary of some significant differences between the provisions of the Jersey Companies Law applicable to Clarivate and, for comparison purposes, the laws applicable to companies incorporated in the State of Delaware and their shareholders.
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Special Meetings of Shareholders
Shareholders generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws.
However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder.
Under Delaware corporate law, a corporation is required to set a minimum quorum of one-third of the issued and outstanding shares for a shareholders meeting.
The Jersey Companies Law does not provide for a shareholder right to put a proposal before the shareholders at the annual general meeting. However, under the Jersey Companies Law, shareholders holding 10% or more of the company’s voting rights and entitled to vote at the relevant meeting may require the directors to call a meeting of shareholders. This must be held as soon as practicable but in any case not later than two months after the date of the deposit of the requisition. The requisition shall state the objects of the meeting. If the directors do not within 21 days from the date of the deposit of the requisition proceed to call a meeting to be held within two months of that date, the requisitionists, or any of them representing more than half of the total voting rights of all of them, may themselves call a meeting, but a meeting so called shall not be held after three months from that date.
Pursuant to the articles of association, no business may be transacted at any general meeting, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the directors (or any duly authorized committee thereof) or pursuant to a requisition of meeting by holders of ordinary shares as aforesaid, (b) otherwise properly brought before an annual general meeting by or at the direction of the directors (or any duly authorized committee thereof) or (c) otherwise properly brought before an annual general meeting by any holder of ordinary shares who (1) is such a holder of record on both (x) the date of the giving of the notice by such holder provided for in the articles of association and (y) the record date for the determination of holders of ordinary shares entitled to vote at such annual general meeting and (2) complies with the notice procedures set forth in the articles of association.
Under the Jersey Companies Law, the quorum requirements for shareholders meetings can be prescribed in a company’s articles of association. The Clarivate articles of association provide that holders holding in aggregate not less than a simple
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majority of all voting share capital of Clarivate in issue present in person or by proxy and entitled to vote shall be a quorum, provided that the minimum quorum for any meeting shall be two holders entitled to vote. See “— Voting rights.
Interested Shareholders Transactions
The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned more than 15% of the target’s outstanding voting stock within the past three years.
This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
The Jersey Companies Law has no comparable provision. As a result, Clarivate cannot avail itself of the types of protections afforded by the Delaware business combination statute. However, although Jersey law does not regulate transactions between a company and its significant shareholders, as a general matter, such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
Interested Director Transactions
Interested director transactions are permissible and may not be legally voided if:

either a majority of disinterested directors, or a majority in interest of holders of shares of the corporation’s capital stock entitled to vote upon the matter, approves the transaction upon disclosure of all material facts; or
the transaction is determined to have been fair as to the corporation as of the time it is authorized, approved or
An interested director must disclose to the company the nature and extent of any interest in a transaction with the company, or one of its subsidiaries, which to a material extent conflicts or may conflict with the interests of the company and of which the director is aware. Failure to disclose an interest entitles the company or a shareholder to apply to the court for an order setting aside the transaction concerned and directing that the director account to the company for any profit.
A transaction is not voidable and a director is not accountable
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ratified by the board of directors, a committee thereof or the shareholders.
notwithstanding a failure to disclose an interest if the transaction is confirmed by special resolution and the nature and extent of the director’s interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed.
Although it may still order that a director account for any profit, a court will not set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith would not thereby be unfairly prejudiced and the transaction was not reasonable and fair in the interests of the company at the time it was entered into.
Cumulative Voting
Under Delaware corporate law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it.
The certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances.
There are no provisions in relation to cumulative voting under the Jersey Companies Law.
Approval of Corporate Matters by Written Consent
Under Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting of shareholders of a corporation may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to take that action at a meeting at which all shareholders entitled to vote were present and voted. In addition, a corporation may eliminate the right of shareholders to act by written consent through amendment to its certificate of incorporation.
All consents must be dated and are only effective if the requisite signatures are collected within 60 days of the earliest dated consent delivered.
Under the Jersey Companies Law, unless prohibited by a company’s articles of association, a unanimous written consent by each shareholder entitled to vote on the matter may effect any matter that otherwise may be brought before a shareholders’ meeting, except for the removal of auditors. Such consent shall be deemed effective when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the resolution. Furthermore, a company’s articles of association may permit written resolutions to be passed by such number of members that would be required to pass the resolutions at a general meeting.
Unless prohibited by a company’s articles of association, the members of a company have a power to require a company to circulate a resolution that may properly be proposed and is to be proposed as a written resolution.
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The articles of association provide that an action may be taken by written consent for so long as Onex and Baring collectively beneficially own a majority of the issued and outstanding ordinary shares of Clarivate. Such consent would need to be passed by such number of shareholders that would be required to pass the resolutions at a general meeting.
Business Combinations and Asset Sales With certain exceptions, a merger, consolidation, or sale of all or substantially all of the assets of a Delaware corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon.
The Jersey Companies Law allows for the merger of two companies into either one consolidated company or one company merged into another so as to form a single surviving company. The merger or consolidation of two or more companies under the Jersey Companies Law requires the directors of the constituent companies to enter into and to approve a written merger agreement, which must also be authorized by a special resolution of the shareholders of each constituent company (which as noted above requires the affirmative vote of no less than two-thirds of the votes cast at a quorate general meeting (or such higher threshold as may be set out in a company’s articles of association)). See “— Voting rights ” above. In relation to any merger or consolidation under the Jersey Companies Law, unlike dissenting shareholders of a Delaware corporation, dissenting shareholders of a Jersey company have no appraisal rights that would provide the right to receive payment in cash for the judicially determined fair value of the shares. However, under Jersey law, dissenting shareholders may object to the Court on the grounds they are unfairly prejudiced by the merger.
The Jersey Companies Law provides that where a person has made an offer to acquire a class or all of the company’s outstanding shares not already held by the person and has as a result of such offer acquired or contractually agreed to acquire 90% or more of such outstanding shares, that person is then entitled (and may be required) to acquire the remaining shares. In such circumstances, a holder of any such remaining shares may apply to the courts of Jersey for an
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order that the person making such offer not be entitled to purchase the holder’s shares or that the person purchase the holder’s shares on terms different than those under which the person made such offer.
In addition, where the company and its creditors or shareholders or a class of either of them propose a compromise or arrangement between the company and its creditors or our shareholders or a class of either of them (as applicable), the courts of Jersey may order a meeting of the creditors or class of creditors or of the company’s shareholders or class of shareholders (as applicable) to be called in such a manner as the court directs. Any compromise or arrangement approved by a majority in number representing 75% or more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if sanctioned by the court, is binding upon the company and all the creditors, shareholders or members of the specific class of either of them (as applicable). Whether the capital of the company is to be treated as being divided into a single or multiple class(es) of shares is a matter to be determined by the court. The court may in its discretion treat a single class of shares as multiple classes, or multiple classes of shares as a single class, for the purposes of the shareholder approval referred to above, taking into account all relevant circumstances, which may include circumstances other than the rights attaching to the shares themselves.
The Jersey Companies Law contains no specific restrictions on the powers of directors to dispose of assets of a company. As a matter of general law, in the exercise of those powers, the directors must discharge their duties of care and act in good faith, for a proper purpose and in the interests of the company.
Election and Removal of Directors Under Delaware corporate law, unless otherwise specified in the certificate of incorporation or bylaws of a corporation, directors are elected by a plurality of the votes of the shares entitled to vote on the election of directors and may be removed with or without cause (or, As permitted by the Jersey Companies Law and pursuant to the articles of association, directors of Clarivate can be appointed and removed in the manner described in the section headed “— Directors ” above.
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with respect to a classified board, only with cause unless the certificate of incorporation provides otherwise) by the approval of a majority of the outstanding shares entitled to vote.
Fiduciary Duties of Directors Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components, the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director must act in a manner he or she reasonably believes to be in the best interests of the corporation. A director must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.
Under the Jersey Companies Law, a director of a Jersey company, in exercising the director’s powers and discharging the director’s duties, has a fiduciary duty to act honestly and in good faith with a view to the best interests of the company; and a duty of care to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Customary law is also an important source of law in the area of directors’ duties in Jersey as it expands upon and provides a more detailed understanding of the general duties and obligations of directors. The Jersey courts view English common law as highly persuasive in this area. In summary, the following duties will apply as manifestations of the general fiduciary duty under the Jersey Companies Law: a duty to act in good faith and in what he or she bona fide considers to be the best interests of the company; a duty to exercise powers for a proper purpose; a duty to avoid any actual or potential conflict between his or her own and the company’s interests; and a duty to account for profits and not take personal profit from any opportunities arising from his or her directorship, even if he or she is acting honestly and for the good of the company. However, the articles of association of a company may permit the director to be personally interested in arrangements involving the company (subject to the requirement to have disclosed such interest).
Under the articles of association, directors who are in any way, whether directly or indirectly, interested in a contract or proposed contract with Clarivate must declare the nature of their interest at a meeting of the board of directors. Following such declaration, a director may vote in respect of any contract or proposed contract notwithstanding his interest; provided that, in exercising any such vote, such director’s duties remain as described above.
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Limitations on Director’s Liability and Indemnification of Directors and Officers
A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, stock purchases, or redemptions, or any transaction from which a director derived an improper personal benefit.
Moreover, these provisions would not be likely to bar claims arising under U.S. federal securities laws.
A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in defense of an action, suit, or proceeding by reason of his or her position if  (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful.
The Jersey Companies Law does not contain any provision permitting Jersey companies to limit the liabilities of directors for breach of fiduciary duty. However, a Jersey company may exempt from liability, and indemnify directors and officers for, liabilities:

incurred in defending any civil or criminal legal proceedings where:

the person is either acquitted or receives a judgment in their favor;

where the proceedings are discontinued other than by reason of such person (or someone on their behalf) giving some benefit or suffering some detriment; or

where the proceedings are settled on terms that such person (or someone on their behalf) gives some benefit or suffers some detriment but in the opinion of a majority of the disinterested directors, the person was substantially successful on the merits in the person’s resistance to the proceedings;

incurred to anyone other than to the company if the person acted in good faith with a view to the best interests of the company;

incurred in connection with an application made to the court for relief from liability for negligence, default, breach of duty, or breach of trust under Article 212 of the Jersey Companies Law in which relief is granted to the person by the court; or

incurred in a case in which the company normally maintains insurance for persons other than directors.
To the fullest extent permitted by law, the articles of association provide that the directors and officers of Clarivate shall be indemnified from and against all liability which they incur in execution of their duty in their
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respective offices, except liability incurred by reason of such director’s or officer’s actual fraud or willful default.
Variation of Rights of Shares Under Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Jersey law and the articles of association, if Clarivate’s share capital is divided into more than one class of shares, we may vary the rights attached to any class (i) without the consent of the holders of the issued shares of that class where such variation is considered by the board of directors of Clarivate not to have a material adverse effect upon such rights or (ii) with either the written consent of the holders of two-thirds of the shares of such class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.
Appraisal Rights A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights under which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction In relation to any merger or consolidation under the Jersey Companies Law, unlike dissenting shareholders of a Delaware corporation, dissenting shareholders of a Jersey company have no appraisal rights that would provide the right to receive payment in cash for the judicially determined fair value of the shares. However, under Jersey law, dissenting shareholders may object to the Court on the grounds they are unfairly prejudiced by the merger and the Court’s powers extend to specifying terms of acquisition different from those of the offer (which could include terms as to price or form of consideration).
Shareholder Suits Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste, and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action
Under Article 141 of the Jersey Companies Law, a shareholder may apply to court for relief on the ground that the conduct of a company’s affairs, including a proposed or actual act or omission by a company, is “unfairly prejudicial” to the interests of shareholders generally or of some part of shareholders, including at a minimum the shareholder making the application.
Under Article 143 of the Jersey Companies Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141 of the Jersey Companies Law), the court may make an order regulating the affairs of a company, requiring a company to refrain from
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doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by a company or by any of its other shareholders. There may be customary personal law actions available to shareholders which would include certain derivate and other actions to bring proceedings against the directors of the company as well as the company.
In principle, Clarivate will normally be the proper plaintiff and a class action or derivative action may not be brought by a minority shareholder. However, a minority shareholder can seek in limited circumstances agreement from the court for special dispensation if the shareholder can show:

that there are wrongdoers in control of the company;

those wrongdoers are using their power to prevent anything being done about it;

the wrongdoing is unconscionable and oppressive; and

in certain other limited circumstances.
Inspection of Books and Records All shareholders of a Delaware corporation have the right, upon written demand, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any purpose reasonably related to such person’s interest as a shareholder.
Shareholders of Clarivate will have the right under the Jersey Companies Law to inspect Clarivate’s register of shareholders and, provided certain conditions are met, to obtain a copy. Shareholders of Clarivate will also be able to inspect the minutes of any shareholder meetings.
The register of directors and secretaries must during business hours (subject to such reasonable restrictions as the company may by its articles of association or in general meeting impose, but so that not less than two hours in each business day be allowed for inspection) be open to the inspection of a shareholder or director of the company without charge and, in the case of a public company or a company which is a subsidiary of a public company, of any other person on payment of such sum (if any), not exceeding £5, as the company may require.
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Amendments of Governing Documents Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation. A provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote. Bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. The memorandum of association and articles of association of a Jersey company may only be amended by special resolution (being a two-third majority if the articles of association of the company do not specify a greater majority) passed by shareholders in general meeting or by written resolution passed in accordance with its articles of association.
Classified Board
A classified board is permitted under both Delaware corporate law and the Jersey Companies Law.
The board of Churchill is comprised of three classes, each serving a three-year term, one class being elected each third year. The articles of association provides that the board of Clarivate is so classified as well. See “ — Directors — Appointment and Removal ” above.
Dissolution and Winding Up Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with a dissolution initiated by the board of directors.
Under the Jersey Companies Law and the articles of association, Clarivate may be voluntarily dissolved, liquidated or wound up by a special resolution of the shareholders. In addition, a company may be wound up by the courts of Jersey if the court is of the opinion that it is just and equitable to do so or that it is expedient in the public interest to do so.
Alternatively, a creditor with a claim against a Jersey company of not less than £3,000 may apply to the Royal Court of Jersey for the property of that company to be declared en désastre (being the Jersey law equivalent of a declaration of bankruptcy). Such an application may also be made by the Jersey company itself without having to obtain any shareholder approval.
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PRICE RANGE OF SECURITIES AND DIVIDENDS
Churchill Capital Corp
Market Price of Units, Common Stock and Warrants
Churchill’s units, warrants and common stock are traded on the NYSE under the symbols CCC, CCC.U and CCC.WS, respectively. The following table sets forth the high and low sales prices for the units, warrants and common stock for the periods indicated since the units commenced public trading on September 7, 2018, and since the warrants and common stock commenced separate trading on October 29, 2018.
Common Stock
Warrants
Units
Period
High
Low
High
Low
High
Low
2019:
First Quarter*
$ 11.75 $ 9.53 $ 2.15 $ .73 $ 12.65 $ 9.98
2018:
Fourth Quarter
$ 9.70 $ 9.50 $ 1.23 $ .85 $ 10.20 $ 10.00
Third Quarter
N/A N/A N/A N/A $ 10.17 $ 10.00
*
Through February 22, 2019.
Holders
As of February 22, 2019 there was 1 holder of record of units, 1 holder of record of shares of common stock and 5 holders of record of warrants. Management believes Churchill has in excess of 300 beneficial holders of its securities.
Dividends
Churchill did not pay any dividends to its stockholders during the year ended December 31, 2018.
Company
Market Price of Common Stock
Historical market price information regarding the Company is not provided because there is no public market for its securities.
Holders
As of February 22, 2019, the number of record holders of the Company’s ordinary shares was 50.
Dividends
The Company did not pay any dividends to its security holders during the year ended December 31, 2018.
Clarivate
Market Price of Ordinary Shares
Historical market price information regarding Clarivate is not provided because there is no public market for its securities.
Holders
As of February 22, 2019, Onex Partners IV LP and Onex Partners IV GP LP were the only record holder of Clarivate’s ordinary shares.
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Dividend Policy
Following the completion of the Transactions, Clarivate’s board of directors will consider whether or not to institute a dividend policy. It is presently intended that Clarivate will retain its earnings for use in business operations and, accordingly, it is not anticipated that Clarivate’s board of directors will declare dividends in the foreseeable future. In addition, the terms of the Company’s Credit Facilities will include restrictions on Clarivate’s ability to pay dividends.
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APPRAISAL RIGHTS
Neither Churchill stockholders nor Churchill unit or warrant holders have appraisal rights under the DGCL in connection with the Transactions.
SUBMISSION OF STOCKHOLDER PROPOSALS
Churchill’s board of directors is aware of no other matter that may be brought before the special meeting. Under Delaware law, only business that is specified in the notice of special meeting to stockholders may be transacted at the special meeting.
FUTURE STOCKHOLDER PROPOSALS
If the business combination is completed, shareholders of Clarivate will be entitled to attend and participate in Clarivate’s annual general meetings of shareholders. Clarivate does not intend to hold an annual general meeting in 2019. Clarivate will provide notice of the date on which its 2020 annual general meeting will be held in accordance with its articles association and the Jersey Companies Law. The Jersey Companies Law does not provide for a shareholder right to put a proposal before the shareholders at the annual general meeting. However, under the Jersey Companies Law, shareholders holding 10% or more of the company’s voting rights and entitled to vote at the relevant meeting may require the directors to call a meeting of shareholders. This must be held as soon as practicable but in any case not later than two months after the date of the deposit of the requisition. The requisition shall state the objects of the meeting. If the directors do not within 21 days from the date of the deposit of the requisition proceed to call a meeting to be held within two months of that date, the requisitionists, or any of them representing more than half of the total voting rights of all of them, may themselves call a meeting, but a meeting so called shall not be held after three months from that date. See “ Description of Clarivate’s Securities — Material Differences between Rights of Holders of Clarivate’s Securities and Rights of Holders of Churchill’s Securities .”
OTHER STOCKHOLDER COMMUNICATIONS
Stockholders and interested parties may communicate with Churchill’s board of directors, any committee chairperson or the non-management directors as a group by writing to the board or committee chairperson in care of Churchill Capital Corp, 640 Fifth Avenue, 12 th Floor, New York, NY 10019. Following the business combination, such communications should be sent in care of Clarivate at Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK. Each communication will be forwarded, depending on the subject matter, to the board of directors, the appropriate committee chairperson or all non-management directors.
EXPERTS
The financial statements of Churchill as of December 31, 2018 and for the period from June 20, 2018 (inception) through December 31, 2018 appearing in this proxy statement/prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere in this proxy statement/prospectus, and are included in reliance on such report given on the authority of such firm as an expert in accounting and auditing.
The financial statements of the Company and its subsidiaries as of December 31, 2018 and December 31, 2017 and for the years then ended included in this proxy statement/prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The financial statement of Clarivate Analytics Plc as of January 31, 2019 included in this proxy statement/prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
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DELIVERY OF DOCUMENTS TO STOCKHOLDERS
Pursuant to the rules of the SEC, Churchill and services that it employs to deliver communications to its stockholders are permitted to deliver to two or more stockholders sharing the same address a single copy of each of Churchill’s annual report to stockholders and Churchill’s proxy statement. Upon written or oral request, Churchill will deliver a separate copy of the annual report and/or proxy statement to any stockholder at a shared address to which a single copy of each document was delivered and who wishes to receive separate copies of such documents. Stockholders receiving multiple copies of such documents may likewise request that Churchill deliver single copies of such documents in the future. Stockholders receiving multiple copies of such documents may request that Churchill deliver single copies of such documents in the future. Stockholders may notify Churchill of their requests by calling or writing Churchill at its principal executive offices at 640 Fifth Avenue, 12 th Floor, New York, NY 10019 or (212) 380-7500. Following the business combination, such requests should be made by calling +44 207 433 4000 or writing Clarivate at Friars House, 160 Blackfriars Road, London, SE1 8EZ, UK.
ENFORCEABILITY OF CIVIL LIABILITIES
Clarivate is a public limited company incorporated under the laws of Jersey, Channel Islands. Some of Clarivate’s directors, executive officers and persons discharging managerial responsibilities, and certain experts named in this proxy statement/prospectus, reside outside the U.S. A substantial portion of Clarivate’s assets and the assets of those non-resident persons are located outside the U.S. As a result, it may not be possible for investors to effect service of process within the U.S. upon Clarivate or those persons or to enforce against Clarivate or them, either inside or outside the U.S., judgments obtained in U.S. courts, or to enforce in U.S. courts, judgments obtained against them in courts in jurisdictions outside the U.S., in any action predicated upon civil liability provisions of the federal securities laws of the U.S. Both in original actions and in actions for the enforcement of judgments of U.S. courts, there is doubt as to whether civil liabilities predicated solely upon the U.S. federal securities laws are enforceable in Jersey. See “ Description of Clarivate’s Securities — Enforcement of Civil Liabilities .”
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WHERE YOU CAN FIND MORE INFORMATION
Churchill files reports, proxy statements and other information with the SEC as required by the Exchange Act. You may read and copy reports, proxy statements and other information filed by Churchill with the Securities SEC at the SEC public reference room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of the materials described above at prescribed rates by writing to the Securities and Exchange Commission, Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. You may access information on Churchill at the SEC web site containing reports, proxy statements and other information at: http://www.sec.gov.
Information and statements contained in this proxy statement/prospectus or any annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed as an exhibit to this proxy statement/prospectus.
All information contained in this document relating to Churchill has been supplied by Churchill, and all such information relating to the Company has been supplied by the Company. Information provided by one another does not constitute any representation, estimate or projection of the other.
If you would like additional copies of this document or if you have questions about the business combination, you should contact via phone or in writing:
Churchill Capital Corp
640 Fifth Avenue, 12 th Floor
New York, NY 10019
Tel.: (212) 380-7500
or:
Robert Marese
MacKenzie Partners, Inc.
1407 Broadway
New York, NY 10018
Tel: (212) 929-5500
Email: proxy@mackenziepartners.com
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INDEX TO FINANCIAL STATEMENTS
CAMELOT HOLDINGS (JERSEY) LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-2
F-3
F-4
F-5
F-6
F-7
F-8
CLARIVATE ANALYTICS PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENT
CHURCHILL CAPITAL CORP
INDEX TO FINANCIAL STATEMENTS
F-57  to  F-69
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Camelot Holdings (Jersey) Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Camelot Holdings (Jersey) Limited and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 26, 2019
We have served as the Company’s or it predecessor’s auditor since 2016.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Consolidated Balance Sheets
(Dollars in thousands except share and per share data)
As of December 31,
2018
2017
Assets
Current assets:
Cash and cash equivalents
$ 25,575 $ 53,186
Restricted cash
9 24,362
Accounts receivable, less allowance for doubtful accounts of  $14,076 and $8,495 at December 31, 2018 and December 31, 2017, respectively
331,295 317,808
Prepaid expenses
31,021 28,395
Other current assets
20,712 20,157
Total current assets
408,612 443,908
Computer hardware and other property, net
20,641 23,010
Identifiable intangible assets, net
1,958,520 2,160,087
Goodwill
1,282,919 1,311,253
Other non-current assets
26,556 60,029
Deferred income taxes
12,426 6,824
Total Assets
$ 3,709,674 $ 4,005,111
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$ 38,418 $ 60,758
Accrued expenses and other current liabilities
153,849 193,710
Current portion of deferred revenues
391,102 361,260
Short-term debt, including current portion of long-term debt
60,345 45,345
Total current liabilities
643,714 661,073
Long-term debt
1,930,177 1,967,735
Non-current portion of deferred revenues
17,112 15,796
Other non-current liabilities
24,838 22,609
Deferred income taxes
43,226 51,792
Total liabilities
2,659,067 2,719,005
Commitments and Contingencies (Note 19)
Shareholders’ equity:
Share capital, $0.01 par value; 2,000,000 shares authorized at December 31, 2018 and December 31, 2017; 1,646,223 and 1,644,720 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively
16 16
Additional paid-in capital
1,677,494 1,662,205
Accumulated other comprehensive income
5,358 13,984
Accumulated deficit
(632,261 ) (390,099 )
Total shareholders’ equity
1,050,607 1,286,106
Total Liabilities and Shareholders’ Equity
$ 3,709,674 $ 4,005,111
The accompanying notes are an integral part of these financial statements.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Consolidated Statements of Operations
(In thousands)
Years Ended December 31,
2018
2017
Revenues, net
$ 968,468 $ 917,634
Operating costs and expenses:
Cost of revenues, excluding depreciation and amortization
(396,499 ) (394,215 )
Selling, general and administrative costs, excluding depreciation and amortization
(369,377 ) (343,143 )
Share-based compensation expense
(13,715 ) (17,663 )
Depreciation
(9,422 ) (6,997 )
Amortization
(227,803 ) (221,466 )
Transaction expenses
(2,457 ) (2,245 )
Transition, integration and other
(61,282 ) (78,695 )
Other operating income (expense), net
6,379 (237 )
Total operating expenses
(1,074,176 ) (1,064,661 )
Loss from operations
(105,708 ) (147,027 )
Interest expense, net
(130,805 ) (138,196 )
Loss before income tax
(236,513 ) (285,223 )
Benefit (provision) for income taxes
(5,649 ) 21,293
Net loss
$ (242,162 ) $ (263,930 )
Per share:
Basic
$ (147.14 ) $ (160.83 )
Diluted
$ (147.14 ) $ (160.83 )
Weighted-average shares outstanding:
Basic
1,645,818 1,641,095
Diluted
1,645,818 1,641,095
The accompanying notes are an integral part of these financial statements.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
Years Ended December 31,
2018
2017
Net loss
$ (242,162 ) $ (263,930 )
Other comprehensive income (loss):
Interest rate swaps, net of  $0 tax in all periods
2,537 1,107
Defined benefit pension plans, net of tax (benefit) provision of ($91) and $430, respectively
(17 ) 881
Foreign currency translation adjustments
(11,146 ) 15,466
Total other comprehensive income (loss)
(8,626 ) 17,454
Comprehensive loss
$ (250,788 ) $ (246,476 )
The accompanying notes are an integral part of these financial statements.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Consolidated Statements of Changes in Equity
(Dollars in thousands except share data)
Share Capital
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders’
Equity
Shares
Amount
Balance at December 31, 2016
1,635,000 $ 16 $ 1,634,984 $ (3,470 ) $ (126,169 ) $ 1,505,361
Issuance of common stock, net
9,720 9,558 9,558
Share-based compensation
17,663 17,663
Comprehensive Income (loss)
17,454 (263,930 ) (246,476 )
Balance at December 31, 2017
1,644,720 16 1,662,205 13,984 (390,099 ) 1,286,106
Issuance of common stock, net
1,503 1,574 1,574
Share-based compensation
13,715 13,715
Comprehensive loss
(8,626 ) (242,162 ) (250,788 )
Balance at December 31, 2018
1,646,223 $ 16 $ 1,677,494 $ 5,358 $ (632,261 ) $ 1,050,607
The accompanying notes are an integral part of these financial statements.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Consolidated Statements of Cash Flows
(In thousands)
Years Ended December 31,
2018
2017
Cash Flows From Operating Activities
Net loss
$ (242,162 ) $ (263,930 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
237,225 228,463
Bad debt expense
6,507 6,505
Deferred income tax benefit
(14,103 ) (36,272 )
Share-based compensation
13,715 17,663
Gain on sale of IPM Product Line
(39,104 )
Deferred finance charges
9,182 23,510
Tax indemnity write-off
33,819
Other operating activities
(3,979 ) 2,548
Changes in operating assets and liabilities:
Accounts receivable
(50,906 ) 43,109
Prepaid expenses
(2,936 ) (4,052 )
Other assets
578 10,799
Accounts payable
(18,091 ) (39,660 )
Accrued expenses and other current liabilities
9,842 (6,038 )
Deferred revenues
33,539 18,751
Other liabilities
774 5,271
Net cash (used in) provided by operating activities
(26,100 ) 6,667
Cash Flows From Investing Activities
Capital expenditures
(45,410 ) (37,804 )
Acquisitions, net of cash acquired
(23,539 ) (7,401 )
Proceeds from sale of Product Line, net of restricted cash
80,883
Proceeds from sale of equity method investment
5,000
Net cash (used in) provided by investing activities
11,934 (40,205 )
Cash Flows used in Financing Activities
Borrowings of debt
45,000 30,000
Repayment of principal on long-term debt
(46,709 ) (15,423 )
Repayment of revolving credit facility
(30,000 )
Payment of debt issuance costs
(817 )
Contingent purchase price payment
(2,470 )
Issuance of common stock, net
1,574 9,058
Net cash (used in) provided by financing activities
(32,605 ) 22,818
Effects of exchange rates
(5,193 ) 3,248
Net changes in cash and cash equivalents, and restricted cash
(51,964 ) (7,472 )
Beginning of period:
Cash and cash equivalents
53,186 77,136
Restricted cash
24,362 7,884
Total cash and cash equivalents, and restricted cash, beginning of period
77,548 85,020
Cash and cash equivalents, and restricted cash, end of period
25,584 77,548
Cash and cash equivalents
25,575 53,186
Restricted cash
9 24,362
Total cash and cash equivalents, and restricted cash, end of period
$ 25,584 $ 77,548
Supplemental Cash Flow Information
Cash paid for interest
$ 121,916 $ 115,236
Cash paid for income tax
$ 13,210 $ 14,722
Capital expenditures included in accounts payable
$ 5,166 $ 2,473
The accompanying notes are an integral part of these financial statements.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 1:   Background and Nature of Operations
Camelot Holdings (Jersey) Limited and its subsidiaries (“Jersey,” “us,” “we,” “our,” or the “Company”) was formed on August 4, 2016 as a private limited liability company organized under the laws of the Island of Jersey. Its registered office is located at 4th Floor, St Paul’s Gate, 22-24 New Street, St Helier, Jersey JE1 4TR.
On July 10, 2016, Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales, and a direct wholly owned subsidiary of Camelot UK Holdco Limited, a direct wholly owned subsidiary (“UK Holdco”), collectively refereed to as (“Bidco”), entered into a separation agreement to acquire (i) certain assets and liabilities related to the Intellectual Property & Science business (“IP&S”) business from Thomson Reuters Corporation (“Former Parent”) and (ii) all of the equity interests and substantially all of the assets and liabilities of certain entities engaged in the IP&S business together with their subsidiaries (“2016 Transaction”). The 2016 Transaction total consideration was $3,566,599, net of cash acquired. Jersey is owned by affiliates of Onex Corporation and private investment funds managed by Baring Private Equity Asia GP VI, L.P (“Baring”) and certain co-investors and is controlled by Onex Corporation.
The Company is a provider of proprietary and comprehensive content, analytics, professional services and workflow solutions that enables users across government and academic institutions, life science companies and research and development (“R&D”) intensive corporations to discover, protect and commercialize their innovations.
Our Science Group consists of our Web of Science and Life Science Product Lines. Both product lines provide curated, high-value, structured information that is delivered and embedded into the workflows of our customers, which include research intensive corporations, life science organizations and universities world-wide. Our Intellectual Property Group consists of our Derwent, CompuMark and MarkMonitor Product Lines. These Product lines help manage customer’s end-to-end portfolio of intellectual property from patents to trademarks to corporate website domains.
Prior Period Expense Reclassifications
In conjunction with the implementation of a new enterprise resource planning system during the quarter ended September 30, 2018, the Company performed an assessment of its Cost of revenues (COR) and Selling, general & administrative expenses (SG&A). As a result of this assessment, certain errors in classification between COR and SG&A were identified, impacting prior periods. Similarly, the Company reclassified certain costs between COR and SG&A. Accordingly, the Company has performed a reclassification of certain prior period amounts to conform to the present period presentation. The Company has concluded that the reclassifications were not material individually or in aggregate to previously issued financial statements.
The following table details the impact of the reclassifications on the Consolidated Statements of Operations for 2017.
Year Ended December 31, 2017
As Previously
Reported
Adjustment
As
Reclassified*
Consolidated Statements of Operations
Cost of revenues, excluding depreciation and amortization
$ (422,213 ) $ 27,949 $ (394,264 )
Selling, general and administrative costs, excluding depreciation and amortization
$ (318,887 ) $ (27,949 ) $ (346,836 )
*
The “As reclassified” balance is prior to newly adopted accounting standards discussed in Note 3 —  Summary of Significant Accounting Policies.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
We have also reclassified prior period Accounts payable to Accrued expenses and other current liabilities in our Consolidated Balance Sheets to conform to the current period presentation. These items had no impact in our Consolidated Statement of Operations or Consolidated Statement of Cash Flows.
Note 2:   Basis of Presentation
The accompanying consolidated financial statements for the years ended December 31, 2018 and 2017, respectively, were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements of the Company include the accounts of all of its subsidiaries. Subsidiaries are entities over which the Company has control, where control is defined as the power to govern financial and operating policies. Generally, the Company has a shareholding of more than 50% of the voting rights in its subsidiaries. The effect of potential voting rights that are currently exercisable are considered when assessing whether control exists. Subsidiaries are fully consolidated from the date control is transferred to the Company, and are de-consolidated from the date control ceases. The U.S. dollar is Jersey’s reporting currency. As such, the financial statements are reported on a U.S. dollar basis.
Note 3:   Summary of Significant Accounting Policies
Business combinations
The Company determines whether substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the set is not a business. If it is not met, the Company then evaluates whether the set meets the requirement that a business include, at a minimum, an input and as substantive process that together significantly contribute to the ability to create outputs.
Business combinations are accounted for using the acquisition method at the acquisition date, which is when control is obtained. The consideration transferred is generally measured at fair value, as are the identifiable assets acquired and liabilities assumed. During the one-year period following the acquisition date, if an adjustment is identified based on new information about facts and circumstances that existed as of the acquisition date, the Company will record measurement-period adjustments related to the acquisitions in the period in which the adjustment is identified.
Goodwill is measured at the acquisition date as the fair value of the consideration transferred (including, if applicable, the fair value of any previously held equity interest and any non-controlling interests) less the net recognized amount (which is generally the fair value) of the identifiable assets acquired and liabilities assumed.
Transaction costs, other than those associated with the issuance of debt or equity securities incurred in connection with a business combination, are expensed as incurred and included in Transaction expenses in the Consolidated Statements of Operations.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts and operations of the Company, and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The most important of these relate to share-based compensation expenses, revenues recognition, the allowance for doubtful accounts, internally
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
developed computer software, valuation of goodwill and other identifiable intangible assets, determination of the projected benefit obligations of the defined benefit plans, income taxes, fair value of stock options, derivatives and financial instruments, contingent earn-out, and the tax related valuation allowances. On an ongoing basis, management evaluates these estimates, assumptions and judgments, in reference to historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Cash and Cash Equivalents
Cash and cash equivalents is comprised of cash on hand and short-term deposits with an original maturity at the date of purchase of three months or less.
Restricted Cash
As of December 31, 2017, the Company’s restricted cash primarily related to funds the Company has received from customers in advance of paying patent renewals on behalf of those customers. This activity was specific to the IPM Product Line, which was sold on October 1, 2018 (See Note 5: Divested Operations, for further details), and was $0 at December 31, 2018.
Accounts Receivable
Accounts receivable are presented net of the allowance for doubtful accounts and any discounts. Accounts receivable are recorded at the invoiced amount and do not bear interest. Collections of accounts receivable are included in cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtful accounts for estimated losses and assesses its adequacy each reporting period by evaluating factors such as the length of time receivables are past due, historical collection experience, and the economic and competitive environment. The expense related to doubtful accounts is included within Selling, general and administrative costs, excluding depreciation and amortization in the Consolidated Statements of Operations. Account balances are written off against the allowance when the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.
Concentration of Credit Risk
Accounts receivable are the primary financial instrument that potentially subjects the Company to significant concentrations of credit risk. Account receivable represents arrangements in which services were transferred to a customer before the customer pays consideration or before payment is due. Contracts with payment in arrears are recognized as receivables after the Company considers whether a significant financing component exists. The Company does not require collateral or other securities to support customer receivables. Management performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed appropriate. Credit losses have been immaterial and reasonable within management’s expectations. No single customer accounted for more than 1% of revenues and our ten largest customers represented only 6% of revenues for the year ended December 31, 2018.
The Company maintains its cash and cash equivalent balances with high-quality financial institutions and consequently, the Company believes that such funds are subject to minimal credit risk.
Prepaid Assets
Prepaid assets represent amounts that the Company has paid in advance of receiving benefits or services. Prepaid assets include amounts for system and service contracts, sales commissions, deposits, prepaid royalties and insurance and are recognized as an expense over the general contractual period that the Company expects to benefit from the underlying asset or service.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Computer Hardware and Other Property
Generally, computer hardware and other property are recorded at cost and are depreciated over the respective estimated useful lives. Upon the 2016 Transaction, computer hardware and other property were revalued and recorded at net book value, which approximated fair value at the 2016 Transaction.
Depreciation is computed using the straight-line method. Repair and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of sold or retired assets are removed from the accounts and any gain or loss is included within loss from operations in the Consolidated Statements of Operations.
The estimated useful lives are as follows:
Computer hardware 3 years
Furniture, fixtures and equipment 5 – 7 years
Leasehold improvements Lesser of lease term or estimated useful life
Computer Software
Development costs related to internally generated software are capitalized once a project has progressed beyond a conceptual, preliminary stage to that of the application development stage. Costs of significant improvements on existing software for internal use, both internally developed and purchased, are also capitalized. Costs related to the preliminary project stage, data conversion and post implementation/​operation stage of an internal use software development project are expensed as incurred.
Capitalized costs are amortized over five years, which is the estimated useful life of the related software. Purchased software is amortized over three years, which is the estimated useful life of the related software. The capitalized amounts, net of accumulated amortization, are included in Identifiable intangible assets, net in the Consolidated Balance Sheets. The cost and related accumulated amortization of sold or retired assets are removed from the accounts and any gain or loss is included in operating expense.
Computer software is evaluated for impairment whenever circumstances indicate the carrying amount may not be recoverable. The test for impairment compares the carrying amounts with the sum of undiscounted cash flows related to the asset. If the carrying value is greater than the undiscounted cash flows of the asset, the asset is written down to its estimated fair value.
Identifiable Intangible Assets, net
Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization or accumulated impairment for indefinite-lived intangible assets. Useful lives are reviewed at the end of each reporting period and adjusted if appropriate. Fully amortized assets are retained in cost and accumulated amortization accounts until such assets are derecognized.
Customer Relationships — Customer relationships primarily consist of customer contracts and customer relationships arising from such contracts.
Databases and Content — Databases and content primarily consists of repositories of the Company’s specific financial and customer information, and intellectual content.
Trade Names — Trade names consist of purchased brand names that the Company continues to use.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Where applicable, intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:
Customer relationships 2 – 14 years
Databases and content 13 – 20 years
Trade names Indefinite
Impairment of Long-lived Assets
Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. The Company evaluates its long-lived assets, including computer hardware and other property, computer software, and finite-lived intangible assets for impairment whenever circumstances indicate that their carrying amounts may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. An asset is assessed for impairment at the lowest level that the asset generates cash inflows that are largely independent of cash inflows from other assets. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Management determined that no impairment existed for any of the periods presented.
Goodwill and Indefinite-Lived Intangible Assets
The Company evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of October 1 or more frequently if impairment indicators arise in accordance with ASC Topic 350. The Company identified one reporting unit for the year ended December 31, 2017 and five reporting units due to a change in the Company’s reporting structure for the year ended December 31, 2018.
The Company evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill.
In determining the fair value of a reporting unit, the Company estimates the fair value of a reporting unit using the fair value derived from the income approach, which is a change from the previous year which used a market approach. The market approach estimates fair value based on market multiples of revenues and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit; whereas, the income approach uses a discounted cash flow (“DCF”) model. The DCF model determines the fair value of our reporting units based on projected future discounted cash flows, which in turn were based on our views of uncertain variables such as growth rates, anticipated future economic conditions, and the appropriate discount rates relative to risk and estimates of residual values.
If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will recognize the difference as an impairment charge. Management concluded that no goodwill impairment existed for any of the periods presented.
The Company also has indefinite-lived intangible assets related to trade names. Indefinite-lived intangible assets are subject to impairment testing annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. For purposes of impairment testing, the fair value
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
of trade names is determined using an income approach, specifically the relief from royalties method. Management concluded that no indefinite-lived intangible impairment existed for any of the periods presented.
Other Current and Non-Current Assets and Liabilities
The Company defines current assets and liabilities as those from which it will benefit from or which it has an obligation for within one year that do not otherwise classify as assets or liabilities separately reported on the Consolidated Balance Sheets. Other non-current assets and liabilities are expected to benefit the Company or cause its obligation beyond one year. The Company classifies the current portion of long-term assets and liabilities as current assets or liabilities.
Leases
Leases are classified as either operating or capital, based on the substance of the transaction at inception of the lease. Classification is re-assessed if the terms of the lease are changed.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments under an operating lease (net of any incentives received from the lessor) are recognized in the Consolidated Statements of Operations on a straight-line basis over the period of the lease. The Company does not currently have any capital leases.
Accounts Payable and Accruals
Accounts payable and accruals are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable and accruals are recognized initially at their settlement value, and are classified as current liabilities if payment is due within one year or less.
Debt
Debt is recognized initially at par value, net of any applicable discounts or financing costs. Debt is subsequently stated at amortized cost with any difference between the proceeds (net of transactions costs) and the redemption value recognized in the Consolidated Statements of Operations over the term of the debt using the effective interest method. Interest on indebtedness is expensed as incurred.
Debt is classified as a current liability when due within 12 months after the end of the reporting period.
Derivative Financial Instruments
Foreign Exchange Derivative Contracts
Prior to the sale of IPM, the Company used derivative financial instruments to manage foreign currency exchange rate risk in IPM. The Company’s derivative financial instruments consist of foreign currency forward contracts (“forward contracts”). Derivative financial instruments were neither held nor issued by the Company for trading purposes.
Interest Rate Swaps
The Company has interest rate swaps with counterparties to reduce its exposure to variability in cash flows relating to interest payments on a portion of its outstanding first lien senior secured term loan facility in an aggregate principal amount of  $1,550,000 (“Term Loan Facility”). The Company applies hedge accounting and has designated these instruments as cash flow hedges of the risk associated with floating interest rates on designated future quarterly interest payments. Management assumes the hedge is highly effective and therefore changes in the value of the hedging instrument are recorded in Accumulated other
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
comprehensive income in the Consolidated Balance Sheets. Any ineffectiveness is recorded in earnings. Amounts in Accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged transactions affect earnings, or upon termination of the hedging relationship.
Fair Value of Financial Instruments
In determining fair value, the use of various valuation methodologies, including market, income and cost approaches is permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s interest rate swap derivative instruments are classified as Level 2. Earn-out liabilities and defined benefit plan assets are classified as Level 3.
Contingent Considerations
The Company records liabilities for the estimated cost of such contingencies when expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the potential liability in these matters. We engage outside experts as deemed necessary or appropriate to assist in the calculation of the liability, however management is responsible for evaluating the estimate. As information becomes available regarding changes in circumstances for ongoing contingent considerations, our potential liability is reassessed and adjusted as necessary. See Note 19 — Commitments and Contingencies for further information on contingencies.
Pension and Other Post-Retirement Benefits
The Company may be required to sponsor pension benefit plans, for certain international markets, which are unfunded and are not significant for the Company. The net periodic pension expense is actuarially determined on an annual basis by independent actuaries using the projected unit credit method. The determination of benefit expense requires assumptions such as the discount rate, which is used to measure service cost, benefit plan obligations and the interest expense on the plan obligations. Other significant assumptions include expected mortality, the expected rate of increase with respect to future compensation and pension. Because the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results which are estimated based on assumptions.
The liability recognized in the Consolidated Balance Sheet is the present value of the defined benefit obligation at the end of the reporting period. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. The defined benefit obligation is included in Other non-current liabilities in the Consolidated Balance Sheets. All actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized immediately in accumulated deficit and included in the consolidated statement of comprehensive income (loss). See Note 11 — Pension and Other Post Retirement Benefits for balances and further details including an estimate of the impact on the consolidated financial statements from changes in the most critical assumptions.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Employer contributions to defined contribution plans are expensed as incurred, which is as the related employee service is rendered.
Certain prior year amounts have been reclassified to conform to current year presentation.
Taxation
The Company recognizes income taxes under the asset and liability method. Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in determining the consolidated income tax expense for financial statement purposes. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In assessing the realizability of deferred tax assets, we consider future taxable income by tax jurisdiction and tax planning strategies. The Company records a valuation allowance to reduce our deferred tax assets to equal an amount that is more likely than not to be realized.
Changes in tax laws and tax rates could also affect recorded deferred tax assets and liabilities in the future. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. Accounting Standards Codification (ASC) Topic 740, Income Taxes, states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company first records unrecognized tax benefits as liabilities in accordance with ASC 740 and then adjusts these liabilities when our judgment changes as a result of the evaluation of new information not previously available at the time of establishing the liability. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.
Interest accrued related to unrecognized tax benefits and income tax related penalties are included in the provision for income taxes.
Deferred tax is provided on taxable temporary differences arising on investments in foreign subsidiaries, except where we intend, and are able, to reinvest such amounts on a permanent basis.
Revenue Recognition
The Company derives revenue by selling information on a subscription and single transaction basis as well as from performing professional services. The Company recognizes revenues when control of these services are transferred to the customer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenues when, or as, the Company transfers control of the product or service for each performance obligation. Revenues are recognized net of discounts and rebates, as well as value added and other sales taxes. Cash received or receivable in advance of the delivery of the services or publications is included in deferred revenues. The Company disaggregates revenue based on revenue recognition pattern. Subscription based revenues are recognized over time whereas our transactional revenues are recognized at a point in time. The Company believes subscription and transaction is reflective of how the Company manages the business. The revenues recognition policies for the Company’s revenue streams are discussed below.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Subscription Revenues
Subscription-based revenues are recurring revenues that are earned under annual, evergreen or multi-year contracts pursuant to which we license the right to use our products to our customers. Revenues from the sale of subscription data and analytics solutions are typically invoiced annually in advance and recognized ratably over the year as revenues are earned. Subscription revenues are typically generated either on (i) an enterprise basis, meaning that the organization has a license for the particular product or service offering and then anyone within the organization can use it at no additional cost, (ii) a seat basis, meaning each individual that uses the particular product or service offering has to have his or her own license, or (iii) a unit basis, meaning that incremental revenues are generated on an existing subscription each time the product is used (e.g., a trademark or brand is searched or assessed).
Transactional Revenues
Transactional revenues are revenues that are earned under contracts for specific deliverables that are typically quoted on a product, data set or project basis and often derived from repeat customers, including customers that also generate subscription based revenues. Revenues from the sale of transactional products and services are invoiced according to the terms of the contract, typically in arrears. Transactional content sales are usually delivered to the customer instantly or in a short period of time, at which time revenues are recognized. In the case of professional services, these contracts vary in length from several months to years for multi-year projects and customers and typically invoices based on the achievement of milestones. Transactional revenues are typically generated on a unit basis, although for certain product and service offerings transactional revenues are generated on a seat basis. Transactional revenues may involve sales to the same customer on multiple occasions but with different products or services comprising the order.
Performance Obligations
Content Subscription:   Content subscription performance obligations are most prevalent in the Web of Science, Derwent, and Cortellis product lines. Content subscriptions are subscriptions that can only be accessed through the Company’s on-line platform for a specified period of time through downloads or access codes. In addition to the primary content subscription, these types of performance obligations can often include other performance obligations, such as training subscriptions, access to historical content, maintenance and other optional content. While revenues for these performance obligations are primarily recognized over the length of the contract (subscription revenues) there are instances where revenues could be recognized upon delivery (transactional revenue). Historical content and some optional content can be purchased via a perpetual license, which would be recognized upon delivery. Fees are typically paid annually at the beginning of each term.
Domain Registration Services:   This performance obligation relates to the MarkMonitor Product Line. This is a service to register domain names with the applicable registries, with the Company being responsible for monitoring the domain name expiration and paying the registry before expiration. In addition, the Company has an ongoing responsibility to ensure the domain name is maintained at the registry. Customers typically sign a 1 – 2 year contract, identifying specific domain names to be registered and tracked. Revenue is recognized over the term of the contract and fees are typically invoiced annually at the beginning of each contract term.
Search Services:   This performance obligation relates to the CompuMark Product Line. It is a comprehensive search report across multiple databases for a proposed trademark. The report is compiled by Clarivate’s analysts and sent to customers. Revenues are recognized upon delivery of the report. Fees are typically paid upon delivery.
Trademark Watch:   This performance obligation relates to the CompuMark Product Line. Trademark watch service is an annual subscription that allows customers to protect their trademarks from infringement by providing timely notification of newly filed or published trademarks. Revenues are recognized over the term of the contract, with fees paid annually at the beginning of each contract term.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Patent Management:   This performance obligation related to the IPM Product Line. The Company paid patent registration fees for customers in multiple countries to ensure their patents do not expire. Transaction fee Revenues were recognized at the time payment is made on the client’s behalf to the applicable patent office. Fees were paid annually at the beginning of each term.
Variable Consideration
In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as retroactive discounts provided to the customers, indexed or volume based discounts, and revenues between contract expiration and renewal. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available to the Company.
Significant Judgments
Significant judgments and estimates are necessary for the allocation of the proceeds received from an arrangement to the multiple performance obligations and the appropriate timing of revenues recognition. Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Determining a standalone selling price that may not be directly observable amongst all the products and performance obligations requires judgment. Specifically, many Web of Science Product Line contracts include multiple product offerings, which may have both subscription and transactional revenues. Judgment is also required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the subscription service and recognized over time for other products. The Company allocates value to primary content subscriptions or licenses and accompanying performance obligations, such as training subscriptions, access to historical content, maintenance and other optional content. When multiple performance obligations exist in a single contract, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation. The Company utilizes its standard price lists to determine the standalone selling price based on the product and country.
The Company allocates the transaction price to each performance obligation based on the best estimate of the standalone selling price of each distinct good or service in the contract. The transaction price in the contract is allocated at contract inception to the distinct good or service underlying each performance obligation in proportion to the standalone selling price. The standalone selling prices are based on the Company’s normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. Discounts applied to the contract will be allocated based on the same proportion of standalone selling prices.
Cost to Obtain a Contract
Commission costs represent costs to obtain a contract and are considered contract assets. The Company pays commissions to the sales managers and support teams for earning new customers and renewing contracts with existing customers. These commission costs are capitalized within Prepaid expenses and other non-current assets on the Consolidated Balance Sheet. The costs are amortized to Selling, general and administrative expenses within the Consolidated Statements of Operations. The amortization period is between one and five years based on the estimated length of the customer relationship.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Deferred Revenues
The timing of revenue recognition may differ from the timing of invoicing to customers. We record deferred revenues when revenues are recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period and recognize revenues over the term of the coverage period.
Cost of Revenues, Excluding Depreciation and Amortization
Cost of revenues consists of costs related to the production and servicing of the Company’s offerings. These costs primarily relate to information technology, production and maintenance of content and personnel costs relating to professional services and customer service.
Selling, General and Administrative, Excluding Depreciation and Amortization
Selling, general and administrative includes compensation for support and administrative functions in addition to rent, office expenses, professional fees and other miscellaneous expenses. In addition, it includes selling and marketing costs associated with acquiring new customers or selling new products or product renewals to existing customers. Such costs primarily relate to wages and commissions for sales and marketing personnel.
Depreciation
Depreciation expense relates to the Company’s fixed assets including furniture & fixtures, hardware, and leasehold improvements. These assets are depreciated over their expected useful lives, and in the case of leasehold improvements over the shorter of their useful life or the life of the related lease.
Amortization
Amortization expense relates to the Company’s finite-lived intangible assets including databases and content, customer relationships, and computer software. These assets are being amortized over periods of 2 to 20 years.
Share-Based Compensation
Share-based compensation expense includes cost associated with stock options granted to certain members of key management. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model, which requires management to make certain assumptions of future expectations based on historical and current data. The assumptions include the expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. The expected term represents the amount of time that options granted are expected to be outstanding, based on forecasted exercise behavior. The risk-free rate is based on the rate at grant date of zero-coupon U.S. treasury notes with a term comparable to the expected term of the option. Expected volatility is estimated based on the historical volatility of comparable public entities’ stock price from the same industry. The Company’s dividend yield is based on forecasted expected payments, which are expected to be zero for current plan. The Company recognizes compensation expense over the vesting period of the award on a straight-line basis. The Company elects to recognize forfeitures as they occur.
Transaction Expenses
Transaction expenses are incurred by the Company to complete business transactions, including acquisitions and disposals, and typically include advisory, legal and other professional and consulting costs.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Transition, Integration and Other
Transition, integration and other related expenses provide for the costs of transitioning certain activities performed by the Former Parent to the Company to enable operation on a stand-alone basis. Transition full time employee expense represents labor costs of full time employees who are currently working on migration projects and being expensed. Their traditional role is application development, which was capitalized.
Other operating income (expense), net
Other operating income (expense), net includes a tax indemnification write down related to the 2016 Transaction for the year ended December 31, 2018. See Note 19: Commitments and Contingencies ( Tax Indemnity ) for further details. The gain on sale of the divested IPM Product Line and related assets is also included in the year ended December 31, 2018. See Note 5: Divested Operations for further details.
Interest Expense
Interest expense consists of interest expense related to our borrowings under the Term Loan Facility and the Notes as well as the amortization of debt issuance costs and interest related to certain derivative instruments.
Foreign Currency Translation
The operations of each of the Company’s entities are measured using the currency of the primary economic environment in which the subsidiary operates (“functional currency”). Nonfunctional currency monetary balances are re-measured into the functional currency of the operation with any related gain or loss recorded in Selling, general and administrative costs, excluding depreciation and amortization in the accompanying Consolidated Statements of Operations. Assets and liabilities of operations outside the U.S., for which the functional currency is the local currency, are translated into U.S. dollars using period-end exchange rates. Revenues and expenses are translated at the average exchange rate in effect during each fiscal month during the year. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive income (loss) in the accompanying Consolidated Balance Sheets.
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from net income, transactions and other events or circumstances from non-owner sources.
Advertising and Promotion Costs
Advertising and promotion costs are expensed as of the first date that the advertisements take place. Advertising expense was approximately $12,150 and $14,416 for the years ended December 31, 2018 and 2017.
Legal Costs
Legal costs are expensed as incurred.
Debt Issuance Costs
Fees incurred to issue debt are generally deferred and amortized as a component of interest expense over the estimated term of the related debt using the effective interest rate method.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Earnings Per Share
The calculation of earnings per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share. Potentially dilutive securities include outstanding stock options. Employee equity share options and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in additional paid-in capital when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.
Newly Adopted Accounting Standards
In May 2014, the FASB issued new guidance related to revenues from contracts with customers which supersedes previous revenue recognition requirements. This new guidance affects any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. Areas of revenue recognition that are affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. We elected to adopt the standard using the full retrospective method effective January 1, 2018, which required us to revise each prior reporting period presented.
The Company implemented new policies, processes, and systems to enable both the preparation of financial information and internal controls over financial reporting in connection with its adoption of ASC 606. The most significant impact of the standard relates to our accounting for prepaid commissions as part of our cost of subscription contracts. Specifically, commissions paid for new customer sales are now being deferred over a five year life to match the new customer’s expected life and use of the Company’s own capitalized costs for related software technology. This five-year life is considered to cross products and capture the average value a customer benefits from purchasing the Company’s data and products. Additional impacts of the standard related to changes in the method of identifying performance obligations within our EndNote product of the Web of Science Product Line.
Adoption of the standard using the full retrospective method required us to restate certain previously reported results. Adoption of the standard related to revenue recognition impacted our previously reported results as follows:
Year Ended December 31, 2017
As Previously
Reported*
New Revenue
Standard
Adjustment
As Adjusted
Statement of Operation
Revenues, net
$ 919,749 (2,115 ) $ 917,634
Cost of revenues, excluding depreciation and amortization
(394,264 ) 49 (394,215 )
Selling, general and administrative costs, excluding depreciation and amortization
(346,836 ) 3,693 (343,143 )
Total operating expenses
(1,068,403 ) 3,742 (1,064,661 )
Loss from operations
(148,654 ) 1,627 (147,027 )
Loss before income tax
(286,850 ) 1,627 (285,223 )
Net Loss
$ (265,557 ) $ 1,627 $ (263,930 )
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
December 31, 2017
As Previously
Reported
New Revenues
Standard
Adjustment
As Adjusted
Balance Sheet
Prepaid expenses
$ 29,465 $ (1,070 ) $ 28,395
Total current assets
444,978 (1,070 ) 443,908
Other non-current assets
54,569 5,460 60,029
Total assets
4,000,721 4,390 4,005,111
Current portion of deferred revenues
356,002 5,258 361,260
Total current liabilities
655,815 5,258 661,073
Total liabilities
2,713,747 5,258 2,719,005
Accumulated deficit
(389,231 ) (868 ) (390,099 )
Total Shareholders’ Equity
1,286,974 (868 ) 1,286,106
Total Liabilities and Shareholders’ Equity
$ 4,000,721 $ 4,390 $ 4,005,111
*
Reflects additional reclassifications of certain expenses to align the presentation with how the Company currently manages these expenses. Refer to Note 1 — Background and Nature of Operations for further details.
In August 2016, the FASB issued new guidance, ASU 2016-15, related to the statement of cash flows which addresses eight specific cash flow classification issues to reduce diversity in practice. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2017. The guidance should be applied on a retrospective basis. The Company adopted the standard beginning on January 1, 2018. The adoption has no material impact on the consolidated financial statements.
In October 2016, the FASB issued new guidance, ASU 2016-16, for intra-entity transfers of assets other than inventory. This standard requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this standard eliminate the exception for an intra-entity transfer of an asset other than inventory. This guidance is effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within annual reporting periods beginning after December 15, 2017. The Company adopted the standard effective January 1, 2018. The adoption has no material impact on the consolidated financial statements.
In January 2017, the FASB issued new guidance, ASU 2017-01, which clarifies the requirements needed for assets and activities to meet the definition of a business which affects multiple areas of accounting including acquisitions, disposals, goodwill and consolidations. This guidance is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2017. The Company adopted the standard beginning on January 1, 2018. The adoption has no material impact on the consolidated financial statements.
In February 2017, the FASB issued new guidance, ASU 2017-05, which clarifies the accounting for derecognition (e.g. sales) of nonfinancial assets in contracts with non-customers and defines what is considered an in substance nonfinancial asset. The new standard is effective at the same time of adoption of ASU 2014-09. The Company adopted the standard effective January 1, 2018. The standard did not have a material impact on the consolidated financial statements.
In March 2017, the FASB issued new guidance, ASU 2017-07, which changes how the net periodic benefit cost of defined benefit and other post retirement benefit plans is presented in the statements of operations. Under the new guidance, the service cost would be presented as a component of operating
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
expenses in the same line item or items as employee compensation costs, and the other components of net periodic benefit cost would be presented outside of operating income. Further, the only component that would be eligible for capitalization into assets such as inventory would be service cost. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis, with the exception that the guidance regarding capitalization of service cost is to be applied on a prospective basis. The Company elected to adopt the standard effective January 1, 2018. The standard did not have a material impact on the consolidated financial statements.
In August 2017, the FASB issued guidance, ASU 2017-12, which provides targeted improvements to the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company early adopted effective January 1, 2018 with a modified retrospective transition method. The standard did not have a material impact on the consolidated financial statements.
In February 2018, the FASB issued guidance, ASU 2018-02, which allows companies to reclassify the tax effects stranded in Accumulated Other Comprehensive Income resulting from The Tax Cuts and Jobs Act to retained earnings. The guidance is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted, including adoption in any interim period. The Company elected to adopt the standard effective December 31, 2018. The standard did not have a material impact on the consolidated financial statements.
Recently Issued Accounting Standards
In February 2016, the FASB issued new guidance, ASU 2016-02, related to leases in which lessees will be required to recognize assets and liabilities on the balance sheet for leases having a term of more than 12 months. Recognition of these lease assets and lease liabilities represents a change from previous GAAP, which did not require lease assets and lease liabilities to be recognized for operating leases. Qualitative disclosures along with specific quantitative disclosures will be required to provide enough information to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities. The Company has elected to adopt the standard effective January 1, 2019.
The provisions of ASU 2016-02 are effective for the Company’s fiscal year beginning January 1, 2019, including interim periods within that fiscal year. The Company plans to elect the package of practical expedients included in this guidance, which allows it to not reassess whether any expired or existing contracts contain leases, the lease classification for any expired or existing leases, and the initial direct costs for existing leases. The Company does not plan to recognize short-term leases on its Consolidated Balance Sheet, and will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.
In July 2018, the FASB issued ASU 2018-11, Leases — Targeted Improvements, as an update to the previously-issued guidance. This update added a transition option which allows for the recognition of a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without recasting the financial statements in periods prior to adoption. The Company plans to elect this transition option.
At adoption, the Company expects to recognize a material increase in total assets and total liabilities resulting from the recognition of right-of-use assets and the related lease liabilities initially measured at the present value of its future operating lease payments. The Company continues to evaluate the impacts of
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
adopting this guidance on its 2019 Consolidated Balance Sheet, Statement of Operations, Statement of Cash Flows, and is updating processes and internal controls to meet the new reporting and disclosure requirements in ASU 2016-02. The Company believes the most significant impact relates to its accounting for real estate leases. We do not anticipate significant impact from leases embedded in service contracts, significant changes to cash flows, or changes to our lease portfolio prior to adoption. The adoption of this standard will have no impact on the Company’s covenant compliance under its current debt agreements.
In June 2016, the FASB issued new guidance, ASU 2016-13, related to measurement of credit losses on financial instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In January 2017, the FASB issued new guidance, ASU 2017-04, which simplifies testing goodwill for impairment by eliminating Step 2 from the goodwill impairment test as described in previously issued guidance. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In June 2018, the FASB issued guidance, ASU 2018-07, which simplifies the accounting for nonemployee share-based payment transactions. The guidance is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In July 2018, the FASB issued guidance, ASU 2018-09, Codification Improvements, which clarifies guidance that may have been incorrectly or inconsistently applied by certain entities. The guidance is effective for all entities for fiscal years beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In August 2018, the FASB issued guidance, ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In August 2018, the FASB issued guidance, ASU 2018-14, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance is effective for all entities for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
In August 2018, the FASB issued guidance, ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internaluse software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this Update. The guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.
There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 4:   Business Combinations
On October 25, 2018, Clarivate closed on the acquisition of TrademarkVision USA, LLC (“TrademarkVision”), an artificial intelligence technology start-up organization headquartered in Brisbane, Australia. The total purchase price for the acquisition consisted of  $20,042 in closing date net cash consideration, subject to subsequent working capital adjustments, plus potential earn-out cash payments dependent upon achievement of certain milestones and financial performance metrics. The fair market value of the liability associated with the earn-out was $4,115 on the date of acquisition. Subsequent changes in the fair value will be included within the Consolidated Statement of Operations. Additionally, the excess value of the total purchase price over the estimated fair value of our identifiable assets and liabilities upon the closing of the acquisition of  $19,205 was allocated to goodwill. The consolidated financial statements include the results of the acquisition subsequent to the closing date. TrademarkVision and its revolutionary image recognition software search tool for trademarks will join the trademark clearance and protection partner CompuMark.
In March 15, 2018, the Company acquired all of the outstanding stock of Kopernio (“Kopernio”), an artificial-intelligence technology startup, for $3,497. The Kopernio acquisition was accounted for using the acquisition method of accounting. As a result of the Kopernio acquisition and the application of purchase accounting, Kopernio’s identifiable assets and liabilities were adjusted to their estimated fair market values as of the closing date, which included a finite life intangible of  $1,258 relating to computer software. Additionally, the excess value of the total purchase price over the estimated fair value of our identifiable assets and liabilities upon the closing of the acquisition of  $2,322 was allocated to goodwill. The consolidated financial statements include the results of the acquisition subsequent to the closing date.
On June 1, 2017, the Company acquired all assets, liabilities and equity interests of Publons Limited and its wholly -owned subsidiary (“Publons”). Total net cash consideration for the acquisition was $7,401, plus potential future cash payments of up to $9,500 contingent upon Publons achieving certain milestones or financial and non-financial performance targets through 2020, including platform users and reviews. The fair market value of the liability associated with the earn-out was $5,900 on the date of acquisition. Subsequent changes in the fair value will be included within the Consolidated Statement of Operations. Publons is a researcher-facing peer-review data and recognition platform. The acquisition of Publons, its platform and data, is believed to increase the value of multiple existing Company products, while supporting researchers in the process. The consolidated financial statements include the results of the acquisitions subsequent to the closing date.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The fair value of identifiable assets acquired and liabilities assumed for all acquisitions at closing during 2018 and 2017, respectively, which were adjusted for qualifying measurement period adjustments, net of cash acquired, and contingent consideration liabilities incurred in relation to the acquisitions are summarized below:
2018
2017
Other current assets
$ 706 $ 51
Finite-lived intangible assets
7,928 3,600
Indefinite-lived intangible assets
70
Goodwill
21,527 9,767
Other non-current assets
38 14
Total assets
30,199 13,502
Current liabilities
491 182
Non-current liabilities
2,054 19
Total liabilities
2,545 201
Net assets acquired
$ 27,654 $ 13,301
None of the goodwill associated with any of the business combinations above will be deductible for income tax purposes. Pro forma information is not presented for these acquisitions as the aggregate operations of the acquisitions were not significant to the overall operations of the Company.
Note 5:   Divested Operations
Effective October 1, 2018, all assets, liabilities and equity interest of the IP Management (IPM) Product Line and related assets were sold to CPA Global for a total purchase price of  $100,130. Proceeds received were inclusive of amounts subject to working capital adjustments of  $6,135, which are recorded in Accrued expenses and other current liabilities on the Consolidated Balance Sheet. Net proceeds received excluded Cash and cash equivalents and Restricted cash of  $25,382. The results of the IPM Product Line and related assets are included in the Consolidated Statement of Operations through September 30, 2018. As a result of the sale, the Company recorded a net gain on sale of  $36,072, inclusive of incurred transaction costs of  $3,032 in connection with the divestiture. The gain on sale is included in Other operating income (expense), net within the Consolidated Statement of Operations. As a result of the sale, the Company wrote off Goodwill in the amount of  $49,349.
The Company used $31,378 of the proceeds to pay down the Term Loan Facility on October 31, 2018. See Note 12: Debt, for further details.
The divestiture of the IPM Product Line and related assets does not represent a strategic shift that is expected to have a major effect on the Company’s operations or financial results, as defined by ASC 205-20, Discontinued Operations ; as a result, the divestiture does not meet the criteria to be classified as discontinued operations.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 6:   Computer Hardware and Other Property, Net
Computer hardware and other property consisted of the following:
December 31,
2018
2017
Computer hardware
$ 18,130 $ 11,238
Leasehold improvements
13,298 13,885
Furniture, fixtures and equipment
6,816 6,768
Total computer hardware and other property
38,244 31,891
Accumulated depreciation
(17,603 ) (8,881 )
Total computer hardware and other property, net
$ 20,641 $ 23,010
Depreciation amounted to $9,422 for the year ended December 31, 2018. Depreciation amounted to $6,997 for the year ended December 31, 2017.
Note 7:   Identifiable Intangible Assets, net
The Company’s identifiable intangible assets consist of the following:
December 31, 2018
December 31, 2017
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
Finite-lived intangible assets
Customer relationships
$ 291,503 $ (164,611 ) $ 126,892 $ 299,886 $ (95,606 ) $ 204,280
Databases and content
1,725,878 (233,733 ) 1,492,145 1,733,304 (130,271 ) 1,603,033
Computer software
268,704 (97,570 ) 171,134 235,420 (52,696 ) 182,724
Finite-lived intangible assets
2,286,085 (495,914 ) 1,790,171 2,268,610 (278,573 ) 1,990,037
Indefinite-lived intangible assets
Trade names
168,349 168,349 170,050 170,050
Total intangible assets
$ 2,454,434 $ (495,914 ) $ 1,958,520 $ 2,438,660 $ (278,573 ) $ 2,160,087
The Company performed the indefinite-lived impairment test as of October 1, 2018. As part of this analysis, the Company determined that its trade name, with a carrying value of  $168,349, and $170,050 as of December 31, 2018 and 2017, respectively, was not impaired and will continue to be reported as indefinite-lived intangible assets.
The weighted-average amortization period for each class of finite-lived intangible assets and for total finite-lived intangible assets, which range between two and 20 years, is as follows:
Remaining
Weighted-Average
Amortization Period
(in years)
Customer relationships
10.6
Databases and content
14.9
Computer software
4.9
Total
13.9
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Amortization amounted to $227,803 for the year ended December 31, 2018. Amortization amounted to $221,466 for the year ended December 31, 2017.
Estimated amortization for each of the five succeeding years as of December 31, 2018 is as follows:
2019
$ 176,545
2020
158,807
2021
149,326
2022
117,865
2023
113,545
Thereafter
1,036,411
Subtotal finite-lived intangible assets
1,752,499
Internally developed software projects in process
37,672
Total finite-lived intangible assets
1,790,171
Intangibles with indefinite lives
168,349
Total intangible assets
$ 1,958,520
Note 8:   Goodwill
The change in the carrying amount of goodwill is shown below:
Balance as of December 31, 2016
$ 1,305,571
Acquisition
9,767
Measurement period adjustments
(4,175 )
Impact of foreign currency fluctuations and other
90
Balance as of December 31, 2017
$ 1,311,253
Acquisition
21,527
Disposals
(49,349 )
Impact of foreign currency fluctuations and other
(512 )
Balance as of December 31, 2018
$ 1,282,919
The Company performed the goodwill impairment test as of October 1, 2018 and 2017. Additionally, the Company reviewed goodwill for indicators of impairment at December 31, 2018 and 2017.
Goodwill represents the purchase price in excess of the fair value of the net assets acquired in a business combination. If the carrying value of a reporting unit exceeds the implied fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. The Company’s reporting units are one level below the operating segment, as determined in accordance with ASC 350. For the years ended December 31, 2017 and 2018, the Company had one reporting unit and five reporting units, respectively. The number of reporting units increased during 2018 due to a change in the Company’s reporting structure resulting in five reporting units.
The Company estimates the fair value of its reporting units using the income approach, which is a change from the previous year, which used a market approach. Under the income approach, the fair value of a reporting unit is calculated based on the present value of estimated cash flows. No indicators of impairment existed as a result of the Company’s assessments. However, based on the results of the 2018 annual impairment analysis performed, the Company has determined that the Derwent Product Line, previously known as the Intellectual Property & Standard (“IP&S”), reporting unit is at risk of a future
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
goodwill impairment. The total goodwill associated with this reporting unit was approximately $130,381 as of December 31, 2018. Based on the latest annual impairment test, the estimated fair value of the Derwent Product Line reporting unit is approximately 2% above its carrying value.
In connection with the 2016 Transaction, during the third quarter of 2017, the Company recorded measurement period adjustments due to additional analysis of facts and circumstances that existed after closing, which increased computer hardware and other property by $3,925, decreased accounts receivable by $614, decreased other current liabilities by $360, and decreased other non-current liabilities by $504. These adjustments resulted in an decrease to goodwill of  $4,175. None of these measurement period adjustments had a material impact on the Company’s results of operations. Effective October 1, 2018, the Company divested the IPM Product Line, which included $49,349 of goodwill. See Note 5: Divested Operations for further details.
Note 9:   Derivative Instruments
Prior to the sale of the IPM Product Line and related assets, the Company entered into forward contracts in order to mitigate exposure from changes in foreign currency exchange rates related to certain foreign denominated payables. We utilized derivative instruments to help us manage these risks. The maximum term of the forward contracts was six months with the majority of forward contracts having a term of one month. The Company recorded these forward contracts in either Accounts receivable or Accrued expenses and other current liabilities at fair value in the Consolidated Balance Sheets and recognized changes in the fair value of these forward contracts through earnings, as these instruments had not been designated as hedges.
The IPM Product Line and related assets, which was divested on October 1, 2018, had forward contracts with notional values of  $36,639 at December 31, 2017. Losses/(gains) on the forward contracts amounted to $240 and $(1,479) for the years ended December 31, 2018 and 2017, respectively, and were recorded in Revenues, net in the Consolidated Statements of Operations. The cash flows from forward contracts were reported as operating activities in the Consolidated Statements of Cash Flows. The fair value of the forward contracts was $83 at December 31, 2017. The fair value of the forward contracts was recorded in Other current assets in the Consolidated Balance Sheets.
Effective March 31, 2017, the Company entered into interest rate swap arrangements with counterparties to reduce its exposure to variability in cash flows relating to interest payments on $300,000 of its outstanding Term Loan arrangements. Additionally, effective February 28, 2018, the Company entered into another interest rate swap relating to interest payments on $50,000 of its outstanding Term Loan arrangements. These hedging instruments mature on March 31, 2021. The Company applies hedge accounting by designating the interest rate swaps as a hedge on applicable future quarterly interest payments. This interest rate swap was effective as of December 31, 2018 and 2017. The fair value of the interest rate swaps is recorded in Other long-term assets according to the duration of related cash flows. The total fair value of interest rate swap asset was $3,644 and $1,107 at December 31, 2018 and 2017, respectively.
Note 10:   Fair Value Measurements
The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)

Level 2 — Observable inputs other than quoted prices include in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are support by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
Below is a summary of the valuation techniques used in determining fair value:
Derivatives — Derivatives consist of foreign exchange contracts and interest rate swaps. The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates or using other observable inputs. The fair value of the interest rate swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask spread. See Note 9 — Derivative Instruments for additional information.
Contingent consideration — The Company values contingent consideration related to business combinations using a weighted probability calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows. Key assumptions used to estimate the fair value of contingent consideration include revenues, net new business and operating forecasts and the probability of achieving the specific targets. See Note 4 — Business Combinations for additional information.
The following inputs and assumptions were used to value the foreign exchange contract derivative liabilities outstanding during the years ended December 31, 2018 and 2017:
December 31,
2018
2017
Discount Rate
N/A 1.26 – 1.5 %
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments. Additionally, the Company has a long-term indemnification asset from the Former Parent, the amount of which is equal to certain tax liabilities incurred prior to the 2016 Transaction. The carrying amount approximates fair value because settlement is expected to be based on the underlying tax amount. The carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs and original issue discount, approximates fair value due to the short-term nature of the interest rate bench mark rates. The fair value of the fixed rate debt is estimated based on market observable data for debt with similar prepayment features. The fair value of the Company’s debt was $1,950,318 and $2,093,827 at December 31, 2018 and 2017, respectively. The fair value is considered Level 2 under the fair value hierarchy.
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The Company has determined that its forward contracts, included in Other current assets, along with the interest rate swaps, included in Accrued expenses and other current liabilities and Other non-current liabilities according to the duration of related cash flows, reside within Level 2 of the fair value hierarchy.
The earn-out liability is recorded in Accrued expenses and other current liabilities and Other non-current liabilities and is classified as Level 3 in the fair value hierarchy. Additionally, the earn-out relates to the TrademarkVision and the Publons acquisitions that occurred in 2018 and 2017, respectively. The amount payable is contingent upon the achievement of certain company specific milestones and performance metrics over a 1-year and 3-year period, respectively, including number of cumulative users,
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
cumulative reviews and annual revenues. In accordance with ASC 805, we estimated the fair value of the earn-out using a Monte Carlo simulation. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. Significant changes in the key assumptions and inputs could result in a significant change in the fair value measurement of the earn-out. As of December 31, 2018, there were no significant changes in the range of outcomes for the earn out.
There were no transfers of assets or liabilities between levels during the years ended December 31, 2018 and 2017.
The following inputs and assumptions were used to value the earn-out liability as of December 31, 2018:
TrademarkVision
Risk free rate
2.77%
Discount rate
8.09%
Expected life (in years)
1.54
Publons
Risk free rate
2.34 – 2.63%
Discount rate
9.23 – 9.72%
Expected life (in years)
1.04 – 3.04
The following inputs and assumptions were used to value the earn-out liability as of December 31, 2017:
Publons
Risk free rate
1.17 – 1.62%
Discount rate
11.44 – 11.90%
Expected life (in years)
1.12 – 4.12
The following table presents the changes in the earn-out, the only Level 3 item, for the years ended December 31, 2018 and 2017.
Balance as of December 31, 2016
$
Earn-out liability
5,900
Balance at December 31, 2017
5,900
Business combinations
4,115
Payment of Earn-out liability (1)
(2,470 )
Revaluations included in earnings
(470 )
Balance as of December 31, 2018
$ 7,075
(1)
See Note 19: Commitments and Contingencies for further details.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The following table provides a summary of the Company’s assets and liabilities that were recognized at fair value on a recurring basis as at December 31, 2018 and 2017:
December 31, 2018
Level 1
Level 2
Level 3
Total Fair
Value
Assets
Interest rate swap asset
$ $ 3,644 $ $ 3,644
3,644 3,644
Liabilities
Earn-out
7,075 7,075
Total
$ $ $ 7,075 $ 7,075
December 31, 2017
Level 1
Level 2
Level 3
Total Fair
Value
Assets
Forward contracts asset
$ $ 83 $ $ 83
Interest rate swap asset
1,107 1,107
1,190 1,190
Liabilities
Earn-out Liability
5,900 5,900
Total
$ $ $ 5,900 $ 5,900
Non-Financial Assets Valued on a Non-Recurring Basis
The Company’s long-lived assets, including goodwill and finite-lived intangible assets subject to amortization, are measured at fair value on a non-recurring basis. These assets are measured at cost but are written-down to fair value, if necessary, as a result of impairment. There have been no impairments of the Company’s long-lived assets during any of the periods presented.
Finite-lived Intangible Assets — If a triggering event occurs, the Company determines the estimated fair value of finite-lived intangible assets by determining the present value of the expected cash flows.
Indefinite-lived Intangible Asset — If a qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name. If the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess.
Note 11:   Pension and Other Post-Retirement Benefits
Retirement Benefits
Defined contribution plans
Employees participate in various defined contribution savings plans that provide for Company-matching contributions. Costs for future employee benefits are accrued over the periods in which employees earn the benefits. Total expense related to defined contribution plans was $13,170 for the year ended December 31, 2018 and $12,488 for the year ended December 31, 2017, which approximates the cash outlays related to the plans.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Defined benefit plans
A limited number of employees participate in noncontributory defined benefit pension plans that are maintained in certain international markets. The plans are managed and funded to provide pension benefits to covered employees in accordance with local regulations and practices. The Company’s obligations related to the defined benefit pension plans is in Accrued expenses and other current liabilities and Other non-current liabilities.
The following table presents the changes in projected benefit obligations, the plan assets, and the funded status of the defined benefit pension plans:
December 31,
2018
2017
Obligation and funded status:
Change in benefit obligation
Projected benefit obligation at beginning of year
$ 14,258 $ 13,621
Service costs
888 442
Interest cost
283 168
Plan participant contributions
109
Actuarial (gain)/losses
29 (640 )
Divestiture
(138 )
Benefit payments
(274 ) (123 )
Expenses paid from assets
(35 )
Effect of foreign currency translation
(634 ) 790
Projected benefit obligation at end of year
$ 14,486 $ 14,258
Change in plan assets
Fair value of plan assets at beginning of year
$ 5,062 $ 5,062
Actual return on plan assets
95
Plan participant contributions
109
Employer contributions
460 123
Benefit payments
(274 ) (123 )
Expenses paid from assets
(35 )
Effect of foreign currency translation
(233 )
Fair value of plan assets at end of year
5,184 5,062
Unfunded status
$ (9,302 ) $ (9,196 )
The following table summarizes the amounts recognized in the consolidated balance sheets related to the defined benefit pension plans:
December 31,
2018
2017
Current liabilities
$ (443 ) $ (342 )
Non current liabilities
$ (8,859 ) $ (8,854 )
AOCI
$ (1,054 ) $ (1,252 )
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The following table provides information for those pension plans with an accumulated benefit obligation in excess of plan assets and projected benefit obligations in excess of plan assets:
December 31,
2018
2017
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation
$ 13,605 $ 13,499
Fair value of plan assets
$ 5,184 $ 5,062
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation
$ 14,486 $ 14,258
Fair value of plan assets
$ 5,184 $ 5,062
The components of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive loss were as follows:
December 31,
2018
2017
Service cost
$ 888 $ 442
Interest cost
283 168
Expected return on plan assets
(150 )
Amortization of actuarial gains
(78 ) (4 )
Net period benefit cost
$ 943 $ 606
The following table presents the weighted-average assumptions used to determine the net periodic benefit cost as of:
December 31,
2018
2017
Discount rate
2.31 % 2.38 %
Expected return on plan assets
3.00 % %
Rate of compensation increase
3.76 % 4.56 %
Social Security increase rate
2.50 % 2.50 %
Pension increase rate
1.80 % 2.00 %
The following table presents the weighted-average assumptions used to determine the benefit obligations as of:
December 31,
2018
2017
Discount rate
2.26 % 2.31 %
Rate of compensation increase
3.68 % 3.76 %
Social Security increase rate
2.50 % 2.50 %
Pension increase rate
1.80 % 1.80 %
The Company determines the assumptions used to measure plan liabilities as of the December 31 measurement date.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to be required to settle the Company’s defined benefit pension plan obligations. The discount rates are derived using weighted average yield curves on corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates. At December 31, 2018, the discount rates ranged from 0.40% to 7.10% for the Company’s pension plan and postretirement benefit plan. At December 31, 2017, the discount rates ranged from 0.45% to 7.10% for the Company’s pension plan and postretirement benefit plan.
Plan Assets
The general investment objective for our plan assets is to obtain a rate of investment return consistent with the level of risk being taken and to earn performance rates of return as required by local regulations for our defined benefit plans. For such plans, the strategy is to invest primarily 100% in insurance contracts. Plan assets held in insurance contracts do not have target asset allocation ranges. The expected long-term return on plan assets is estimated based off of historical and expected returns. As of December 31, 2018, the expected weighted-average long-term rate of return on plan assets was 3%.
The fair value of our plan assets and the respective level in the far value hierarchy by asset category is as follows:
December 31, 2018
December 31, 2017
Level 1
Level 2
Level 3
Total
Assets
Level 1
Level 2
Level 3
Total
Assets
Fair value measurement of pension plan assets:
Insurance contract
$ 5,184 $ 5,184 $ 5,062 $ 5,062
The fair value of the insurance contracts is an estimate of the amount that would be received in an orderly sale to a market participant at the measurement date. The amount the plan would receive from the contract holder if the contracts were terminated is the primary input and is unobservable. The insurance contracts are therefore classified as Level 3 investments.
The following table provides the estimated pension benefit payments that are payable from the plans to participants as of December 31, 2018 for the following years:
2019
$ 488
2020
610
2021
489
2022
643
2023
781
2024 to 2027
4,923
Total
$ 7,934
Based on the current status of our defined benefit obligations, we expect to make payments in the amount of  $274 to fund these plans in 2019. However, this estimate may change based on future regulatory changes.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 12:   Debt
The following is a summary of the Company’s debt:
December 31, 2018
December 31, 2017
Type
Maturity
Effective
Interest
Rate
Carrying
Value
Effective
Interest
Rate
Carrying
Value
Senior Unsecured Notes
2024 7.875 % $ 500,000 7.875 % $ 500,000
Term Loan Facility
2023 5.729 % 1,483,993 4.700 % 1,530,700
The Revolving Credit Facility
2021 5.754 % 5,000 %
The Revolving Credit Facility
2021 5.729 % 40,000 4.751 % 30,000
Total debt outstanding
2,028,993 2,060,700
Debt issuance costs
(34,838 ) (43,086 )
Term Loan Facility, discount
(3,633 ) (4,534 )
Short-term debt, including current portion of long-term debt
(60,345 ) (45,345 )
Long-term debt, net of current portion and debt issuance costs
$ 1,930,177 $ 1,967,735
The loans were priced at market terms and collectively have a weighted average interest rate and term of 6.259% and 5.473% for the year ended December 31, 2018 and 2017, respectively.
Senior Unsecured Notes
On October 3, 2016, in connection with the 2016 Transaction, Camelot Finance S.A., a wholly-owned subsidiary of the Company, issued senior unsecured notes (“Notes”) in an aggregate principal amount of $500,000. The Notes bear interest at a rate of 7.875% per annum, payable semi-annually to holders of record in April and October and mature in October 2024. The first interest payment was made April 2017. The Notes include customary covenants, including covenants that restrict, subject to certain exceptions, Bidco’s, and certain of its subsidiaries’, ability to incur indebtedness, issue certain types of stock, incur liens, make certain investments, dispose of assets, make certain types of restricted payments, consolidate or merge with certain entities or enter into certain related party transactions.
The Notes are subject to redemption as a result of certain changes in tax laws or treaties of  (or their interpretation by) a relevant taxing jurisdiction at 100% of the principal amount, plus accrued and unpaid interest to the date of redemption, and upon certain changes in control at 101% of the principal amount, plus accrued and unpaid interest to the date of purchase. Additionally, at the Company’s election the Notes may be redeemed (i) prior to October 15, 2019 at a redemption price equal to 100% of the aggregate principal amount of Notes being redeemed plus a “make-whole” premium, plus accrued and unpaid interest to the date of redemption or (ii) on October 15 of each of the years referenced below based on the call premiums listed below, plus accrued and unpaid interest to the date of redemption.
Period
Redemption Price
(as a percentage of principal)
2019
103.938 %
2020
101.969 %
2021 and thereafter
100.000 %
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Senior Secured Credit Facility
The Company’s credit agreement, dated as of October 3, 2016 (“Credit Agreement”), initially consisted of a $1,550,000 Term Loan Facility and a $175,000 first lien senior secured revolving credit facility in an aggregate principal amount of  $175,000, with a letter of credit sub limit of  $25,000 (“Revolving Credit Facility”). The Revolving Credit Facility carries an interest rate at LIBOR plus 3.25% per annum or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing, and matures on October 3, 2021. The Revolving Credit Facility interest rate margins will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement). The Term Loan Facility consisted of a $651,000 borrowing by Camelot Finance LP, a subsidiary of Onex Corporation, and an $899,000 borrowing by Camelot Cayman LP, a subsidiary of Onex Corporation (collectively “Tower Borrowers”). The proceeds of the loans to Tower Borrowers were, in turn, loaned to the Company in loans with identical principal amounts and substantially similar repayment terms. In addition to the interest rates above the Company pays 0.1% interest to the Tower Borrowers. Camelot Finance LP was dissolved on December 31, 2017, at which time Credit Suisse AG, Cayman Islands Branch, acting as the administrative agent for the respective portion of the Term Loan Facility, became the direct lender to the Company. The Term Loan Facility matures on October 3, 2023. Principal repayments under the Term Loan Facility are due quarterly in an amount equal to 0.25% of the aggregate outstanding principal amount borrowed under the Term Loan Facility on October 3, 2016 and on the maturity date, in an amount equal to the aggregate outstanding principal amount on such date, together in each case, with accrued and unpaid interest. In connection with the Term Loan Facility, the Company incurred $64,888 of debt issuance costs.
On April 6, 2017, and November 16, 2017, the Borrowers and the other loan parties entered into Amendments (the “Amendments”) to the Credit Agreement in order to (i) reduce the margins under the existing senior secured U.S. dollar-denominated Term Loan Facility to LIBOR plus 3.50%, and 3.25%, respectively, per annum (with a 1.00% LIBOR floor) or Prime plus 2.25% per annum, as applicable, and (ii) reset the prepayment premium of 101% on certain prepayments and amendments of the Term Loan Facility in connection with re-pricing events (“Amended Term Loan Facility”). In addition, the Company pays 0.1% interest to the Tower Borrowers. Effective December 31, 2017, the Company no longer pays interest to Camelot Finance LP. The Amended Term Loan Facility was $1,534,539. As a result of the Amendments, debt issuance costs and debt discounts of  $13,892, which had been capitalized in connection with the original Term Loan Facility issued on October 3, 2016, were written off to Interest expense, net in the Consolidated Statements of Operations as extinguishment charges for the year ended December 31, 2017. The Amendments also provided for a 0.25% step-down in margin once UK Holdco achieves a B2 corporate family rating from Moody’s. Except as noted above, all other terms of the Amended Term Loan Facility are substantially similar to terms of the Company’s existing Term Loan Facility.
Upon sale of the IPM Product Line and related assets, the Company made an excess cash payment of $31,378 toward the Company’s Term Loan Facility in accordance with the Credit Facility.
The Revolving Credit Facility provides for revolving loans, same-day borrowings and letters of credit pursuant to commitments in an aggregate principal amount of  $175,000 with a letter of credit sublimit of $25,000. Proceeds of loans made under the Revolving Credit Facility may be borrowed, repaid and reborrowed prior to the maturity of the Revolving Credit Facility. Our ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, delivery of required notices, accuracy of the representations and warranties contained in the Credit Agreement and the absence of any default or event of default under the Credit Agreement.
With respect to the Amendments, the Company may be subject to certain negative covenants, including either a fixed charge coverage ratio, total first lien net leverage ratio, or total net leverage ratio if certain conditions are met. These conditions were not met and the Company was not required to perform these covenants as of December 31, 2018.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The obligations of the borrowers under the Credit Agreement are guaranteed by UK Holdco and certain of its restricted subsidiaries and are collateralized by substantially all of UK Holdco’s and certain of its restricted subsidiaries’ assets (with customary exceptions described in the Credit Agreement). UK Holdco and its restricted subsidiaries are subject to certain covenants including restrictions on UK Holdco’s ability to pay dividends, incur indebtedness, grant a lien over its assets, merge or consolidate, make investments, or make payments to affiliates.
As of December 31, 2018, letters of credit totaling $2,002 were collateralized by the Revolving Credit Facility. Notwithstanding the Revolving Credit Facility, as of December 31, 2018 the Company had an unsecured corporate guarantee outstanding for $9,639 and cash collateralized letters of credit totaling $38, all of which were not collateralized by the Revolving Credit Facility. The Company borrowed $45,000 and $30,000 against the Revolving Credit Facility as of December 31, 2018 and 2017, respectively, to support current operations. The Company’s cash from operations is expected to meet repayment needs for the next twelve months.
Amounts due under all of the outstanding borrowings as of December 31, 2018 for the next five years are as follows:
2019
$ 60,345
2020
15,345
2021
15,345
2022
15,345
2023
1,422,613
Thereafter
500,000
Total maturities
2,028,993
Less: capitalized debt issuance costs and original issue discount
(38,471 )
Total debt outstanding as of December 31, 2018
$ 1,990,522
Note 13:   Revenue
Disaggregated Revenues
The tables below show the Company’s disaggregated revenues for the periods presented:
Years Ended December 31,
2018
2017
Subscription revenues
$ 794,097 $ 785,717
Transaction revenues
177,523 181,590
Total revenues, gross
971,620 967,307
Deferred revenues adjustment (1)
(3,152 ) (49,673 )
Total Revenues, net
$ 968,468 $ 917,634
(1)
This accounting adjustment relates to the 2016 Transaction, which included a revaluation of deferred revenues to account for the difference in value between the customer advances retained by the Company upon the consummation of the 2016 Transaction and our outstanding performance obligations related to those advances.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Cost to Obtain a Contract
The Company has prepaid sales commissions included in both Prepaid expenses and Other non-current assets on the balance sheets. The amount of prepaid sales commissions included in Prepaid expenses was $10,407 and $8,285 as of December 31, 2018 and 2017, respectively. The amount of prepaid sales commissions included in Other non-current assets was $9,493 and $5,457 as of December 31, 2018 and 2017, respectively. Amortization expense of the commission balances amounted to $9,995 and $4,335 for the years ended December 31, 2018 and 2017, respectively. The Company has not recorded any impairments against these prepaid sales commissions.
Contract Balances
Accounts
receivables
Current portion
of deferred
revenues
Non-current
portion of
deferred revenues
Opening (1/1/2018)
$ 317,808 $ 361,260 $ 15,796
Closing (12/31/2018)
331,295 391,102 17,112
Increase/(decrease)
$ (13,487 ) $ (29,842 ) $ (1,316 )
Opening (1/1/2017)
$ 361,586 $ 333,944 $ 18,602
Closing (12/31/2017)
317,808 361,260 15,796
Increase/(decrease)
$ 43,778 $ (27,316 ) $ 2,806
The amount of revenues recognized in the period that were included in the opening deferred revenues current and long-term balances were $361,260. This revenue consists primarily of subscription revenue.
Transaction Price Allocated to the Remaining Performance Obligation
As of December 31, 2018, approximately $68,394 of revenue is expected to be recognized in the future from remaining performance obligations, excluding contracts with durations of one year or less. The Company expects to recognize revenue on approximately 63% of these performance obligations over the next 12 months. Of the remaining 37%, 21% is expected to be recognized within the following year, with the final 16% expected to be recognized within years 3 to 9.
Note 14:   Shareholders’ Equity
Shareholders’ Equity
In March 2017, the Company formed the Management Incentive Plan under which certain employees of the Company may be eligible to purchase shares of the Company. In exchange for each share purchase subscription, the purchaser is entitled to a fully vested right to an ordinary share. Additionally, along with a subscription, employees receive a corresponding number of options to acquire additional ordinary shares subject to five year vesting. See “Note 15 — Employment and Compensation Arrangements” for additional detail related to the options. The Company has received net subscriptions for 1,503 and 9,220 shares during the years ended December 31, 2018 and 2017, respectively. Additionally, the Company granted 500 ordinary shares in exchange for services provided during the year ended December 31, 2017. At December 31, 2018, the number of shares issued and outstanding under the Management Incentive Plan was 11,223.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 15:   Employment and Compensation Arrangements
Employee Incentive Plans
The Company’s 2016 Equity Incentive Plan provides for certain employees of the Company to be eligible to participate in equity ownership in the Company. Equity awards may be issued in the form of options to purchase shares of the Company which are exercisable upon the occurrence of conditions specified within individual award agreements. Equity awards may also be issued in the form of restricted shares with dividend rights subject to vesting terms and conditions specified in individual award agreements. Additionally, the Company may make available share purchase rights under the terms of the 2016 Equity Incentive Plan. Total share-based compensation expense included in the Consolidated Statements of Operations amounted to $13,715 and $17,663 for the years ended December 31, 2018 and 2017, respectively. The total associated tax benefits recognized amounted to $2,740 and $3,192 for the years ended December 31, 2018 and 2017, respectively.
The Company’s Management Incentive Plan provides for certain employees of the Company to be eligible to purchase shares of the Company. See Note 14 — Shareholders’ Equity for additional information. Along with each subscription, employees may receive a corresponding number of options to acquire additional ordinary shares subject to five year vesting.
The Company issues shares for stock options from authorized shares. At December 31, 2018, the Company was authorized to grant up to 250,000 stock options under its existing stock incentive plans. As of December 31, 2018 and 2017, 64,399 and 79,307, respectively, stock options have not been granted.
As of December 31, 2018 and 2017, there was $19,637 and $29,633, respectively, of total unrecognized compensation cost, related to outstanding stock options, which is expected to be recognized through 2023 with a remaining weighted-average service period of 5.0 years.
The Company’s stock option activity is summarized below:
Number
of
Options
Weighted Average
Exercise Price
per Share
Weighted Average
Remaining
Contractual Life
Aggregate
Intrinsic
Value
Outstanding as of December 31, 2017
170,693 $ 1,572 9.3 $ 2,262
Granted
31,178 1,678 9.7
Forfeited and expired
(16,270 ) 1,601
Outstanding as of December 31, 2018
185,601 $ 1,587 8.5 $ 13,293
Vested and exercisable at December 31, 2018
50,364 $ 1,568 8.3 $ 3,880
The aggregate intrinsic value in the table above represents the difference between the Company’s most recent valuation and the exercise price of each in-the-money option on the last day of the period presented.
No stock options were exercised in the years ended December 31, 2018 or 2017. The weighted-average fair value of options granted per share was $244 and $253 as of December 31, 2018 and 2017, respectively.
The Company accounts for awards issued under the Equity Incentive Plan as additional contributions to equity. Share-based compensation includes expense associated with stock option grants which is estimated based on the grant date fair value of the award issued. Share-based compensation expense related to stock options is recognized over the vesting period of the award, which is generally five years, on a graded-scale basis. The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted. The Black-Scholes model takes into account the fair value of an ordinary share and the contractual and expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. The fair value of our ordinary shares is determined utilizing an external third party pricing specialist. The contractual term of the option ranges from the 1 year to 10 years. While the Company does not have any history for expected terms, employees do not have any specific benefit to exercise the options before the
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
terms are met as the shares are not freely tradable, and as such an expected term near the high end of the contractual range is deemed most appropriate. Expected volatility is the average volatility over the expected terms of comparable public entities from the same industry historical data. The risk-free interest rate is based on a treasury rate with a remaining term similar to the contractual term of the option. The Company is recently formed and at this time does not expect to distribute any dividends. The Company recognizes forfeitures as they occur and does not expect to have material forfeitures. The assumptions used to value the Company’s options granted during the period presented and their expected lives were as follows:
December 31,
2018
2017
Weighted-average expected dividend yield
Expected volatility
21.00 – 23.05 % 24.84 – 27.90 %
Weighted-average expected volatility
21.86 % 27.50 %
Weighted-average risk-free interest rate
3.02 % 2.53 %
Expected life (in years)
8.5 9.0
Note 16:   Income Taxes
Income tax (benefit)/expense on income/(loss) analyzed by jurisdiction is as follows:
Years Ended December 31,
2018
2017
Current
U.K.
$ 1,014 $ (142 )
U.S. Federal
6,395 5,202
U.S. State
2,146 833
Other
11,061 8,552
Total current
20,616 14,445
Deferred
U.K.
85 (427 )
U.S. Federal
(5,465 ) (10,648 )
U.S. State
(227 ) (142 )
Other
(9,360 ) (24,521 )
Total deferred (1)
(14,967 ) (35,738 )
Total provision (benefit) for income taxes
$ 5,649 $ (21,293 )
(1)
Due to rate reductions in the U.S. and Belgium enacted in the 4th quarter of 2017.
The components of pre-tax loss are as follows:
Years Ended December 31,
2018
2017
U.K. $ (222,043 ) $ (211,944 )
U.S. (11,880 ) (58,054 )
Other loss
(2,590 ) (15,225 )
Pre-tax loss
$ (236,513 ) $ (285,223 )
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
A reconciliation of the statutory U.K. income tax rate to the Company’s effective tax rate is as follows:
Years Ended December 31,
2018
2017
Loss before tax:
$ (236,513 ) $ (285,223 )
Income tax, at the statutory rate
(44,937 ) (54,905 )
Statutory rate (1)
19.0 % 19.3 %
Effect of different tax rates
(1.2 )% 3.3 %
Tax rate modifications (2)
% 5.7 %
Valuation Allowances
(18.0 )% (20.8 )%
Permanent differences
(0.7 )% 0.3 %
Withholding tax
(0.2 )% (0.3 )%
Tax indemnity
(2.7 )% %
Sale of Subsidiary
2.2 % %
Other
(0.8 )% %
Effective rate
(2.4 )% 7.5 %
(1)
The Company performs a reconciliation of the income tax provisions based on its domicile and statutory rate. Reconciliations are based on the U.K. statutory corporate tax rate.
(2)
Due to rate reductions in the U.S. and Belgium enacted in the 4th quarter of 2017.
The tax effects of the significant components of temporary differences giving rise to the Company’s deferred income tax assets and liabilities are as follows:
December 31,
2018
2017
Accounts receivable
$ 916 $ 1,310
Goodwill
1,217
Fixed assets, net
1,670
Accrued expenses
3,735 3,417
Deferred revenues
3,570 915
Other assets
9,655 4,700
Unrealized gain/loss
74 528
Debt issuance costs
1,199
Operating losses and tax attributes
135,219 94,571
Total deferred tax assets
154,368 108,328
Valuation allowances
(133,856 ) (92,812 )
Net deferred tax assets
20,512 15,516
Other identifiable intangible assets, net
(43,247 ) (57,082 )
Other liabilities
(7,785 ) (3,286 )
Goodwill
(42 )
Fixed Assets, net
(238 )
Debt issuance costs
(116 )
Total deferred tax liabilities
(51,312 ) (60,484 )
Net deferred tax liabilities
$ (30,800 ) $ (44,968 )
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
In the Consolidated Balance Sheets, deferred tax assets and liabilities are shown net if they are in the same jurisdiction. The components of the net deferred tax liabilities as reported on the Consolidated Balance Sheets are as follows:
December 31,
2018
2017
Deferred tax asset
$ 12,426 $ 6,824
Deferred tax liability
(43,226 ) (51,792 )
Net deferred tax liability
$ (30,800 ) $ (44,968 )
The Tax Cuts and Jobs Act (the Act) was enacted in the US on December 22, 2017. Of most relevance to the Company, the Act reduced the US federal corporate income tax rate to 21% from 35%, established a Base Erosion Anti-Abuse Tax (“BEAT”) regime and changed the provisions limiting current interest deductions and use of NOL carryforwards. Certain new provisions are effective for the Company beginning December 1, 2018 and did not have a material impact to the 2018 financial statements.
SAB 118 measurement period
We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017 and throughout 2018. At December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes, for the remeasurement of deferred tax assets and liabilities and recorded a provisional tax benefit amount of  $2,237 under SAB 118. At December 31, 2018, we have now completed our accounting for all of the enactment-date income tax effects of the Act. As further discussed above, during 2018, we did not recognize any adjustments to the provisional amounts recorded at December 31, 2017.
Deferred tax assets and liabilities
As of December 31, 2017, we remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future (which was generally 21% for the US and 25% for Belgium), by recording a tax benefit amount of  $2,237 (provisional) related to the US and $14,290 related to Belgium. Upon further analysis and refinement of our calculations during the 12 months ended December 31, 2018, it was determined that no adjustment to these amounts was necessary.
The Company is required to assess the realization of its deferred tax assets and the need for a valuation allowance. The assessment requires judgment on the part of management with respect to benefits that could be realized from future taxable income. The valuation allowance is $133,856 and $92,812 at December 31, 2018 and 2017, respectively against certain deferred tax assets, as it more likely than not that such amounts will not be fully realized. During the years ended December 31, 2018 and 2017, the valuation allowance increased by $41,044 and $44,633, respectively, primarily due to operating losses in certain jurisdictions and an increase in deferred tax assets with a full valuation allowance. The increases were partially offset by the release of valuation allowances in jurisdictions with current year operating income.
At December 31, 2018, the Company had U.K. tax loss carryforwards of  $352,632, Japan tax loss carryforwards of  $58,901, U.S. federal tax loss carryforwards of  $104,122, tax loss carryforwards in other foreign jurisdictions of  $18,495, and U.S. state tax loss carryforwards of  $67,823. The majority of the unrecognized deductible tax losses relate to UK, US, and Japan. The carryforward period for the Japan tax losses is nine years, and the expiration period begins 2025. The carryforward period for the UK tax losses is indefinite. The carryforward period for US federal tax losses is twenty years for losses generated in tax years ended prior to December 31, 2017. The expiration period for these losses begins in 2036. For US losses generated in tax years beginning after January 1, 2018, the carryforward period is indefinite. The carryforward period for US state losses varies, and the expiration period is between 2018 and 2036.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The Company has not provided income taxes and withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2018 because the Company intends to permanently reinvest such earnings. As of December 31, 2018, the cumulative amount of earnings upon which income taxes and withholding taxes have not been provided is approximately $7,748. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.
Uncertain Tax Positions
Unrecognized tax benefits represent the difference between the tax benefits that we are able to recognize for financial reporting purposes and the tax benefits that we have recognized or expect to recognize in filed tax returns. The total amount of net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $1,450 and $91 as of December 31, 2018 and 2017, respectively.
The Company recognizes accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of December 31, 2018, the interest and penalties are $449 and as of December 31, 2017, the interest and penalties are $5. It is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months by a range of $0 to $252.
The Company files income tax returns in the United States and various non-U.S. jurisdictions. As of December 31, 2018, the Company’s open tax years subject to examination were 2014 through 2018.
The following table summarizes the Company’s unrecognized tax benefits, excluding interest and penalties:
December 31,
2018
2017
Balance at the Beginning of the year
$ 91 $ 211
Increases for tax positions taken in prior years
1,339
Increases for tax positions taken in the current year
72
Decreases due to statute expirations
(52 ) (120 )
Balance at the End of the year
$ 1,450 $ 91
Note 17:   Earnings per Share
Potential common shares of 185,601 and 170,693 related to options under the employee incentive plan were excluded from diluted EPS for the years ended December 31, 2018 and 2017, respectively, as the Company had a net loss for the years ended December 31, 2018 and 2017. See “Note 15 — Employment and Compensation Arrangements.”
The basic and diluted EPS computations for our common stock are calculated as follows (in thousands, except per share amounts):
Years Ended December 31,
2018
2017
Basic/Diluted EPS
Net loss
$ (242,162 ) $ (263,930 )
Preferred stock dividends
Income available to common stockholders
$ (242,162 ) $ (263,930 )
Weighted-average number of common shares outstanding
1,645,818 1,641,095
Basic EPS
$ (147.14 ) $ (160.83 )
Diluted EPS
$ (147.14 ) $ (160.83 )
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 18:   Product and Geographic Sales Information
The Company’s chief operating decision maker (“CODM”) assesses Company-wide performance and allocates resources based on consolidated financial information. As such, the company has one operating and reportable segment. The CODM evaluates performance based on profitability including Standalone Adjusted EBITDA as defined by our (i) Revolving Credit Facility and (ii) the Term Loan Facility, collectively our (“Senior Secured Credit Facilities”).
No single customer accounted for more than 1% of revenues and our ten largest customers represented only 6% and 7% of revenues for the years ended December 31, 2018 and 2017, respectively.
Revenues by geography
The following table summarizes revenues from external customers by geography, which is based on the location of the customer:
Years Ended December 31,
2018
2017
Revenues:
North America
$ 450,356 $ 455,791
Europe
242,415 243,245
APAC
209,118 201,234
Emerging Markets
69,731 67,037
Deferred revenues adjustment
(3,152 ) (49,673 )
Total
$ 968,468 $ 917,634
Assets by geography
Assets are allocated based on operations and physical location. The following table summarizes non-current assets other than financial instruments and deferred tax assets by geography:
December 31,
2018
2017
Assets:
North America
$ 1,036,192 $ 1,163,704
Europe
2,145,073 2,294,998
APAC
79,487 68,034
Emerging Markets
24,241 26,533
Total
$ 3,284,993 $ 3,553,269
Revenue by product group
The following table summarizes revenue by product group (in thousands):
Years Ended December 31,
2018
2017
Web of Science Product Line
$ 361,957 $ 352,995
Cortellis Product Line
169,225 169,299
Science Group
531,182 522,294
Derwent Product Line
176,016 172,897
MarkMonitor Product Line
122,947 120,408
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Years Ended December 31,
2018
2017
CompuMark Product Line
121,025 119,854
Intellectual Property Group
419,988 413,159
IP Management Product Line
20,450 31,854
Deferred revenues adjustment
(3,152 ) (49,673 )
Total
$ 968,468 $ 917,634
Note 19:   Commitments and Contingencies
The Company does not have any recorded or unrecorded guarantees of the indebtedness of others.
Contingencies
Lawsuits and Legal Claims
The Company is engaged in various legal proceedings, claims, audits and investigations that have arisen in the ordinary course of business. These matters include, but are not limited to, antitrust/competition claims, intellectual property infringement claims, employment matters and commercial matters. The outcome of all of the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with outside legal counsel, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will not have a material impact on the Company’s financial condition taken as a whole.
Contingent Liabilities
In conjunction with the acquisition of Publons, the Company agreed to pay former shareholders up to an additional $9,500 through 2020. Amounts payable are contingent upon Publons’ achievement of certain milestones and performance metrics. The Company paid $2,470 of the contingent purchase price in the year ended December 31, 2018, as a result of Publons achieving the first tier of milestones and performance metrics. The Company had an outstanding liability for $2,960 and $5,900 related to the estimated fair value of this contingent consideration as of December 31, 2018 and 2017, respectively. The outstanding balance consisted of  $1,600 and $2,250 included in Accrued expenses and other current liabilities, and $1,360 and $3,650 included in Other non-current liabilities in the Consolidated Balance Sheets as of December 31, 2018 and 2017 respectively.
In conjunction with the acquisition of Kopernio, the Company agreed to pay former shareholders up to an additional $3,500 through 2021. Amounts payable are contingent upon Kopernio’s achievement of certain milestones and performance metrics and will be recognized over the concurrent service period.
In conjunction with the acquisition of TrademarkVision, the Company agreed to pay former shareholders a potential earn-out dependent upon achievement of certain milestones and financial performance metrics through 2020. Amounts payable are contingent upon TrademarkVision’s achievement of certain milestones and performance metrics. As of December 31, 2018, the Company had an outstanding liability for $4,115 related to the estimated fair value of this contingent consideration, of which $4,115 was included in Other non-current liabilities in the Consolidated Balance Sheets.
Tax Indemnity
In connection with the 2016 Transaction, the Company recorded certain tax indemnification assets pursuant to the terms of the separation and indemnified liabilities identified therein. As a result of counterparty dispute related to certain of the indemnification claims, the Company wrote off  $33,819
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
during the 4th quarter of 2018, which represented a portion of the amount originally recorded, plus accumulated foreign currency impacts. Management continues to interpret the contractual obligation due from Former Parent and its controlled entities (“Thomson Reuters”) as due in full. The asset write down was recorded within Other operating income (expense), net within the Consolidated Statement of Operations. Although the claim has uncertainty of collectability, the Company will continue to vigorously defend its claim for the full value of the indemnity, including the filing of formal legal claims as necessary.
Commitments
Leases
The Company enters into operating leases in the ordinary course of business, primarily for real property and equipment. Payments for these leases are contractual obligations as scheduled per each agreement. Total rental expense under operating leases amounted to $25,527 for the year ended December 31, 2018. The total rental expense under operating leases amounted to $17,255 for the year ended December 31, 2017.
The future aggregate minimum lease payments as of December 31, 2018 under all non-cancelable operating leases for the years noted are as follows:
Year ended December 31,
2019
$ 22,140
2020
19,531
2021
17,240
2022
15,333
2023
14,944
Thereafter
40,367
Total operating lease commitments
$ 129,555
In connection with certain leases, the Company guarantees the restoration of the leased property to a specified condition after completion of the lease period. As of December 31, 2018 and 2017, the liability of $4,100 and $4,200, respectively, associated with these restorations is recorded within other liabilities.
There were no material future minimum sublease payments to be received under non-cancelable subleases at December 31, 2018. There was no material sublease income as of December 31, 2018 and 2017, respectively.
Unconditional purchase obligations
Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing provisions and the approximate timing of the transactions. The Company has various purchase obligations for materials, supplies, outsourcing and other services contracted in the ordinary course of business. These items are not recognized as liabilities in our consolidated financial statements but are required to be disclosed. The contractual terms of these purchase obligations extend through 2021. The Company paid $71,859 towards these purchase obligations during the year ended December 31, 2018.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
The future unconditional purchase obligations as of December 31, 2018 are as follows:
Year ended December 31,
2019
$ 34,321
2020
24,370
2021
8,151
2022
13
Total
$ 66,855
Note 20:   Related Party and Former Parent Transactions
Onex Partners Advisor LP (“Onex”), an affiliate of the Company, is considered a related party. Concurrent with the 2016 Transaction, the Company entered into a Consulting Services Agreement with Onex, pursuant to which the Company is provided certain ongoing strategic and financing consulting services in exchange for a quarterly management fee. In connection with this agreement, the Company recognized $920 and $1,230 in operating expenses related to this agreement for the years ended December 31, 2018 and 2017, respectively. As noted in Note 12 — Debt, the Company pays 0.1% interest per annum to Onex for the Credit Agreement. For the years ended December 31, 2018 and 2017, the Company recognized interest expense, for Onex related interest, of  $905 and $1,557, respectively. The Company had an outstanding liability of  $450 and $162 to Onex as of December 31, 2018 and 2017, respectively.
Baring, an affiliate of the Company, is considered a related party. Concurrently with the 2016 Transaction, the Company entered into a Management Services Agreement with Baring, pursuant to which the Company is provided certain ongoing strategic and financing consulting services. In connection with this agreement, the Company recognized $669 and $854 in operating expenses related to this agreement for the years ended December 31, 2018 and 2017, respectively. The Company had an outstanding liability of $334 and $641 to Baring as of December 31, 2018 and 2017, respectively.
The fees to Onex and Baring were negotiated at a rate that management believes is appropriate and reasonable for the value of the services being provided, and is commensurate with the fee that would be charged by independent third parties for similar services.
In connection with the 2016 Transaction, Bidco and a subsidiary of the Former Parent entered into the Transition Service Agreement, which became effective on October 3, 2016, pursuant to which such subsidiary of the Former Parent will, or will cause its affiliates and/or third-party service providers to, provide Bidco, its affiliates and/or third-party service providers with certain technology, facilities management, human resources, sourcing, financial, accounting, data management, marketing and other services to support the operation of the IP&S business as an independent company. Such services are provided by such subsidiary of the Former Parent or its affiliates and/or third-party service providers for various time periods and at various costs based upon the terms set forth in the Transition Service Agreement.
In connection with the acquisition of Publons, the Company paid a $716 consulting fee for the year ended December 31, 2017, which is included in Transaction expenses, to a former member of its Board of Directors.
A controlled affiliate of Baring is a vendor of ours. Total payments to this vendor were $531 and $388 for the years ended December 31, 2018 and 2017, respectively. The Company had an outstanding liability of $120 and $199 as of December 31, 2018 and 2017, respectively.
One member of our key management is the Co-founder of a vendor of ours. Total payments to this vendor were $865 for the year ended December 31, 2018 and the Company had an outstanding liability of $332 as of December 31, 2018. This vendor was not a related party in 2017.
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CAMELOT HOLDINGS (JERSEY) LIMITED
Notes to the Consolidated Financial Statements  — (Continued)
(Amounts in Thousands, Except Per Share Data, Option Price Amounts, Ratios or As Noted)
Note 21:   Subsequent Events
On January 14, 2019, the Company entered into a definitive agreement to merge with Churchill Capital Corporation (“Churchill”), a public investment vehicle listed on the New York Stock Exchange (Ticker: CCC). An amendment to this agreement was executed effective February 26, 2019. The Company’s existing shareholders will retain 100% of their equity, which converts to 73.8% ownership of the outstanding shares of the combined company at closing, assuming no redemptions by Churchill’s public stockholders. The remaining outstanding shares of the combined company will be held by the current stockholders and founders of Churchill. The transaction is expected to be completed during the second quarter of 2019, subject to approval by Churchill stockholders and other customary closing conditions. The combined company will be called Clarivate Analytics.
Prior to the consummation of the merger, Clarivate will enter into a tax receivable agreement with its current equity holders, which will provide for the sharing of tax benefits relating to certain pre-business combination tax attributes as those tax benefits are realized by Clarivate. Under the Tax Receivable Agreement, the aggregate reduction in income taxes payable will be computed by comparing the actual tax liability of Camelot Holdings (Jersey) Limited and its subsidiaries with the estimated tax liability of applicable entities had such entities not been able to utilize the Covered Tax Assets, taking into account several assumptions including, for example, that the relevant entities will pay U.S. state and local taxes at a rate of 7%, the tax assets existing at the time of the Company’s entry into the Tax Receivable Agreement are deemed to be utilized and give rise to a tax savings before certain other tax benefits, and certain asset or equity transfers by certain of the Company’s subsidiaries will be treated under the Tax Receivable Agreement as giving rise to tax benefits associated with the Covered Tax Assets implicated by such asset or equity transfers. Payments under the Tax Receivable Agreement will generally be made annually in cash, and the amounts payable will be subject to interest from the due date (without extensions) of the applicable tax filing that reflects a covered savings until the payment under the Tax Receivable Agreement is made. Tax Receivable Agreement payments are expected to commence in 2021 (with respect to taxable periods ending in 2019) and will be subject to deferral, at the Company’s election, for payment amounts in excess of $30 million for payments to be made in 2021 and 2022, but will not be subject to deferral thereafter. Amounts deferred under the preceding sentence will accrue interest until paid in accordance with the terms of the Tax Receivable Agreement. The Tax Receivable Agreement is subject to certain events of default that may give rise to an acceleration of the Company’s obligations under the Tax Receivable Agreement. The amount and timing of Tax Receivable Agreement payments, however, may vary based on a number of factors, including the amount, character and timing of our subsidiaries’ taxable income in the future, and any successful challenges to our tax positions. Consequently, we are unable to reliably estimate the timing or amount of payments expected to be made under the Tax Receivable Agreement.
Through January 31, 2019, management paid down $15,000 of the $45,000 outstanding Revolving Credit Facility balance as of December 31, 2018.
Management has evaluated the impact of events that have occurred subsequent to December 31, 2018 through the date of the financial statements in this report were available for issuance. Based on this evaluation, other than as recorded or disclosed within these consolidated financial statements and related notes, the Company has determined no other events were required to be recognized or disclosed.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Clarivate Analytics Plc
Opinion on the Financial Statement — Consolidated Balance Sheet
We have audited the accompanying consolidated balance sheet of Clarivate Analytics Plc (the “Company”) as of January 31, 2019, including the related notes (collectively referred to as the “consolidated financial statement”). In our opinion, the consolidated financial statement presents fairly, in all material respects, the financial position of the Company as of January 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The consolidated financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's consolidated financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of the consolidated financial statement in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statement is free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement. We believe that our audit provides a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 26, 2019
We have served as the Company's auditor since 2019.
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CLARIVATE ANALYTICS PLC
Consolidated Balance Sheet as of January 31, 2019
(Dollars in actuals)
Shareholders’ Equity:
Ordinary shares, no par value, 2 issued and outstanding (unlimited shares authorized)
$ 2.00
Ordinary shares receivable
(2.00 )
Total Shareholders’ Equity
$ 0.00
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CLARIVATE ANALYTICS PLC
Notes to the Consolidated Balance Sheet
Note 1:   Background and Nature of Operations
Clarivate Analytics Plc (“the Company”) was incorporated as a Jersey limited company on January 7, 2019. Pursuant to the definitive agreement entered into to effect a merger between Camelot Holdings (Jersey) Limited and Churchill Capital Corp (the “Transaction”), the Company was formed for the purposes of completing the Transaction and related transitions and carrying on the business of Camelot Holdings (Jersey) Limited, and its subsidiaries. In conjunction with the Transaction with Churchill Capital Corp, the Company will be the sole managing member of Camelot Holdings (Jersey) Limited, and is expected to operate and control all the business and affairs of Camelot Holdings (Jersey) Limited, and through Camelot Holdings (Jersey) Limited and its subsidiaries.
Note 2:   Basis of Presentation and Accounting
The balance sheet is presented in accordance with accounting principles generally accepted in the United States of America. Separate statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows have not been presented because there have been no activities in this entity as of January 31, 2019.
Basis for Consolidation
The consolidated balance sheet includes the accounts of the Company and its wholly owned subsidiaries, Camelot Merger Sub (Jersey) Limited and CCC Merger Sub, Inc. The Company, Camelot Merger Sub (Jersey) Limited, and CCC Merger Sub, Inc. did not have any operations as of January 31, 2019.
Note 3:   Summary of Significant Accounting Policies — Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Note 4:   Shareholders’ Equity
There is no limit on the number of shares of any class, no par value, the Company is authorized to issue. On January 9, 2019, the Company issued 2 ordinary shares; 1 to Onex Partners IV LP, and 1 to Onex Partners IV GP LP, who each agreed to pay $1.00 per share. The ordinary shares receivable is reflected as a reduction to shareholders’ equity. As of January 31, 2019, 2 shares were issued and outstanding.
Note 5:   Subsequent Events
The Company has evaluated subsequent events through February 26, 2019, the date on which the balance sheet was available for issuance.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Churchill Capital Corp
Opinion on the Financial Statement
We have audited the accompanying balance sheet of Churchill Capital Corp (the “Company”) as of December 31, 2018, the related statements of operations, changes in stockholders’ equity and cash flows for the period from June 20, 2018 (inception) through December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period from June 20, 2018 (inception) through December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2018.
New York, NY
February 27, 2019
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CHURCHILL CAPITAL CORP
BALANCE SHEET
DECEMBER 31, 2018
ASSETS
Current Assets
Cash
$ 3,528,190
Prepaid expenses and other current assets
334,654
Total Current Assets
3,862,844
Marketable securities held in Trust Account
694,574,904
Total Assets
$ 698,437,748
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses
$ 1,936,353
Deferred tax liability
13,098
Income taxes payable
794,936
Total Current Liabilities
2,744,387
Deferred underwriting fee payable
24,150,000
Total Liabilities
26,894,387
Commitments and Contingencies
Common stock subject to possible redemption, 66,301,394 shares at redemption value
666,543,359
Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 2,698,606 issued and outstanding (excluding 66,301,394 shares subject to possible redemption)
270
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 17,250,000 shares issued and outstanding
1,725
Additional paid-in capital
3,756,501
Retained earnings
1,241,506
Total Stockholders’ Equity
5,000,002
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 698,437,748
The accompanying notes are an integral part of these financial statements.
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CHURCHILL CAPITAL CORP
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 20, 2018 (INCEPTION) THROUGH DECEMBER 31, 2018
Operating costs
$ 2,525,364
Loss from operations
(2,525,364 )
Other income:
Interest income
4,512,532
Unrealized gain on marketable securities held in Trust Account
62,372
Other income, net
4,574,904
Income before provision for income taxes
2,049,540
Provision for income taxes
(808,034 )
Net income
$ 1,241,506
Weighted average shares outstanding, basic and diluted (1)
17,706,822
Basic and diluted net loss per common share (2)
$ (0.13 )
(1)
Excludes an aggregate of up to 66,301,394 shares subject to redemption as of December 31, 2018.
(2)
Net loss per common share — basic and diluted excludes income attributable to common stock subject to possible redemption of  $3,529,452 for the period from June 20, 2018 (inception) through December 31, 2018.
The accompanying notes are an integral part of these financial statements.
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CHURCHILL CAPITAL CORP
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE PERIOD FROM JUNE 20, 2018 (INCEPTION) THROUGH DECEMBER 31, 2018
Class A Common Stock
Class B Common Stock
Additional
Paid-in
Capital
Retained
Earnings
Total
Stockholders’
Equity
Shares
Amount
Shares
Amount
Balance – June 20, 2018 (inception)
$ $ $ $ $
Issuance of Class B common stock to Sponsor
17,250,000 1,725 23,275 25,000
Sale of 69,000,000 Units, net of underwriting discount and offering expenses
69,000,000 6,900 651,969,955 651,976,855
Sale of 18,300,000 Private Placement Warrants
18,300,000 18,300,000
Common stock subject to redemption
(66,301,394 ) (6,630 ) (666,536,729 ) (666,543,359 )
Net income
1,241,506 1,241,506
Balance – December 31, 2018
2,698,606 $ 270 17,250,000 $ 1,725 $ 3,756,501 $ 1,241,506 $ 5,000,002
The accompanying notes are an integral part of these financial statements.
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CHURCHILL CAPITAL CORP
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JUNE 20, 2018 (INCEPTION) THROUGH DECEMBER 31, 2018
Cash Flows from Operating Activities:
Net income
$ 1,241,506
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account
(4,512,532 )
Unrealized gain on marketable securities held in Trust Account
(62,372 )
Deferred tax provision
13,098
Changes in operating assets and liabilities:
Prepaid expenses
(334,654 )
Accounts payable and accrued expenses
1,936,353
Income taxes payable
794,936
Net cash used in operating activities
(923,665 )
Cash Flows from Investing Activities:
Investment of cash in Trust Account
(690,000,000 )
Net cash used in investing activities
(690,000,000 )
Cash Flows from Financing Activities:
Proceeds from issuance of common stock to Sponsor
25,000
Proceeds from sale of Units, net of underwriting discounts paid
676,200,000
Proceeds from sale of Private Placement Warrants
18,300,000
Reimbursement of offering expenses from underwriter
588,000
Proceeds from promissory note – related party
275,000
Repayment of promissory note – related party
(275,000 )
Payment of offering costs
(661,145 )
Net cash provided by financing activities
694,451,855
Net Change in Cash
3,528,190
Cash – Beginning
Cash – Ending $ 3,528,190
Non-cash investing and financing activities:
Initial classification of common stock subject to redemption
$ 665,300,820
Change in value of common stock subject to redemption
$ 1,242,539
Deferred underwriting fee payable
$ 24,150,000
The accompanying notes are an integral part of these financial statements.
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CHURCHILL CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Churchill Capital Corp (the “Company”) was incorporated in Delaware on June 20, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company is focusing on businesses in the broader technology services and software industry and, more specifically, the predictive analytics and data market. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2018, the Company had not commenced any operations. All activity for the period from June 20, 2018 (inception) through December 31, 2018 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, its search for a Business Combination and activities in connection with the proposed acquisition of Clarivate Analytics Plc (“Holdings”), currently a subsidiary of Onex Partners IV LP and Onex Partners IV GP LP; Camelot Holdings (Jersey) Limited (“Clarivate”) (see Note 12). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Initial Public Offering was declared effective on September 6, 2018. On September 11, 2018, the Company consummated the Initial Public Offering of 69,000,000 units (“Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which includes a full exercise by the underwriters of their over-allotment option in the amount of 9,000,000 Units, at $10.00 per Unit, generating gross proceeds of  $690,000,000, which is described in Note 4.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 18,300,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of  $1.00 per Private Placement Warrant in a private placement to Churchill Sponsor LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of  $18,300,000, which is described in Note 5.
Following the closing of the Initial Public Offering on September 11, 2018, an amount of  $690,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which may be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below, except that interest earned on the Trust Account can be released to the Company to pay its tax obligations.
Transaction costs relating to the Initial Public Offering amounted to $38,023,145, consisting of $13,800,000 of underwriting fees, $24,150,000 of deferred underwriting fees and $73,145 of other costs, which is net of a $588,000 reimbursement received from the underwriters (see Note 7). In addition, as of December 31, 2018, $3,528,190 of cash was held outside of the Trust Account and is available for working capital purposes.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete an initial Business Combination with one or more operating
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CHURCHILL CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS
businesses or assets having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law or stock exchange requirements and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transactions is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor and its permitted transferees has agreed to vote their Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination.
If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor and its permitted transferees have agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held by them in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to consummate a Business Combination within the Combination Window (as defined below) and (c) not to propose an amendment to the Company’s Amended and Restated
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Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment.
The Company has until September 11, 2020 to consummate a Business Combination (the “Combination Window”). If the Company is unable to complete a Business Combination within the Combination Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Window.
The Sponsor and its permitted transferees have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Window. However, if the Sponsor and their permitted transferees acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Window. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Window and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.00 per Unit.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
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NOTES TO FINANCIAL STATEMENTS
NOTE 2. LIQUIDITY
The Company has principally financed its operations from inception using proceeds from the sale of its equity securities to its shareholders prior to the Initial Public Offering and such amount of proceeds from the sale of the Private Placement Warrants and the Initial Public Offering that were placed in an account outside of the Trust Account for working capital purposes. As of December 31, 2018, the Company had $3,528,190 in its operating bank accounts, $694,574,904 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of approximately $2,020,000, which excludes approximately $902,000 of franchise and income taxes payable that will be paid from interest earned on the Trust Account. In addition, two of the Company’s service providers have agreed to defer the payment of fees owed to them until the consummation of a Business Combination, which amounted to approximately $900,000 as of December 31, 2018. Such fees are included in the accounts payable and accrued expenses in the accompanying balance sheet at December 31, 2018. Based on the foregoing, the Company believes it will have sufficient cash to meet its needs for the next twelve months following the date from when the financial statements are issued.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
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NOTES TO FINANCIAL STATEMENTS
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2018.
Marketable securities held in Trust Account
At December 31, 2018, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2018, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
Income taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net loss per common share
Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2018, which
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NOTES TO FINANCIAL STATEMENTS
are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 52,800,000 shares of common stock, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.
Reconciliation of net loss per common share
The Company’s net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the income of the Trust Account and not the losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:
For the Period from
June 20, 2018
(inception) through
December 31,
2018
Net income
$ 1,241,506
Less: Income attributable to shares subject to redemption
(3,529,452 )
Adjusted net loss
$ (2,287,946 )
Weighted average shares outstanding, basic and diluted
17,706,822
Basic and diluted net loss per share
$ (0.13 )
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of  $250,000. At December 31, 2018, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Financial instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent accounting pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 4. PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 69,000,000 Units at a purchase price of $10.00 per Unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 9,000,000 Units at $10.00 per Unit. Each Unit consists of one share of Class A common stock and one half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of  $11.50 per share, subject to adjustment (see Note 8).
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the Initial Public Offering, the Sponsor purchased an aggregate of 18,300,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of  $18,300,000. Each Private Placement Warrant is exercisable to purchase one share of Class A
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NOTES TO FINANCIAL STATEMENTS
common stock at a price of  $11.50 per share. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Window, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
In July 2018, the Sponsor purchased 11,500,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. On August 31, 2018 and September 6, 2018, the Company effected stock dividends of 0.125 of a share of Class B common stock and one third of a share of Class B common stock, respectively, for each outstanding share of Class B common stock, resulting in 17,250,000 Founder Shares outstanding. All share and per share amounts have been retroactively restated to reflect the stock dividends. The Founder Shares will automatically convert into shares of Class A common stock upon consummation of a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 8.
The Founder Shares included an aggregate of up to 2,250,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to fully exercise their over-allotment option, 2,250,000 Founder Shares are no longer subject to forfeiture.
The Sponsor and its permitted transferees have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note — Related Party
On July 6, 2018, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company borrowed an aggregate principal amount of  $275,000. The Promissory Note was non-interest bearing and payable on the earlier of March 31, 2019 or the completion of the Initial Public Offering. The Promissory Note was repaid upon the consummation of the Initial Public Offering on September 11, 2018.
Administrative Support Agreement
The Company entered into an agreement commencing on September 6, 2018 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a total of $31,250 per month for office space, administrative and support services. For the period from June 20, 2018 (inception) through December 31, 2018, the Company incurred $118,750 in fees for these services.
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NOTES TO FINANCIAL STATEMENTS
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of  $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
NOTE 7. COMMITMENTS AND CONTINGENCIES
Contingent Fee Arrangement
The Company has entered into a fee arrangement with a service provider pursuant to which certain fees incurred by the Company will be deferred and become payable only if the Company consummates a Business Combination. If a Business Combination does not occur, the Company will not be required to pay these contingent fees. As of December 31, 2018, the amount of these contingent fees was approximately $300,000. To the extent a Business Combination is consummated, the Company anticipates incurring a significant amount of additional costs. There can be no assurances that the Company will complete a Business Combination.
Registration Rights
Pursuant to a registration rights agreement entered into on September 6, 2018, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $24,150,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that the Company does not complete a Business Combination, subject to the terms of the underwriting agreement.
Operating Lease
The Company leases space for corporate purposes under a lease agreement that expires in November 2019. The Company incurred rent expense amounting to approximately $10,200 for the period from June 20, 2018 (inception) through December 31, 2018.
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NOTES TO FINANCIAL STATEMENTS
Future minimum lease payments due under the lease amount to approximately $99,000 for the year ended December 31, 2019.
Reimbursement of Expenses
The Sponsor, and the Company’s officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations, including up to $500,000 for office space rented outside of New York City and personnel hired solely for activities on the Company’s behalf.
NOTE 8. STOCKHOLDERS’ EQUITY
Preferred Stock  — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2018, there were no shares of preferred stock issued or outstanding.
Class A Common Stock  — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of  $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2018, there were 2,698,606 shares of Class A common stock issued and outstanding, excluding 66,301,394 shares of common stock subject to possible redemption.
Class B Common Stock  — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of  $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At December 31, 2018, there were 17,250,000 shares of Class B common stock issued and outstanding.
Holders of Class B common stock will have the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent warrants issued, or to be issued, to any seller in a Business Combination. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
Warrants  — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of  (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
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NOTES TO FINANCIAL STATEMENTS
The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its reasonable best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available
Once the warrants become exercisable, the Company may redeem the Public Warrants:

in whole and not in part;

at a price of $0.01 per warrant;

upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and

if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Window and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 days
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NOTES TO FINANCIAL STATEMENTS
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 9. INCOME TAX
The Company’s net deferred tax liability is as follows:
Deferred tax liability
Unrealized gain on marketable securities
$ (13,098 )
Total deferred tax liability
$ (13,098 )
The income tax provision consists of the following:
Federal
Current
$ 794,936
Deferred
13,098
State
Current
Deferred
Income tax provision
$ 808,034
As of December 31, 2018, the Company did not have any U.S. federal and state net operating loss carryovers (“NOLs”).
In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2018 is as follows:
Statutory federal income tax rate
21.0 %
State taxes, net of federal tax benefit
0.0 %
Business combination expenses
18.4 %
Income tax provision (benefit)
39.4 %
The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. The Company’s tax returns for the period from June 20, 2018 (inception) through December 31, 2018 remain open and subject to examination. The Company considers New York to be a significant state tax jurisdiction.
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
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CHURCHILL CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1:
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
Level
December 31,
2018
Assets:
Marketable securities held in Trust Account
1 $ 694,574,904
NOTE 11. SELECTED QUARTERLY INFORMATION (UNAUDITED)
The following table presents summarized unaudited quarterly financial data for each of the quarters for the period from June 20, 2018 (inception) through December 31, 2018. The data has been derived from the Company’s unaudited financial statements that, in management’s opinion, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such information when read in conjunction with the financial statements and notes thereto. The results of operations for any quarter are not necessarily indicative of the results of operations for any future period.
June 20, 2018
(inception) through
June 30, 2018
Third
Quarter
Fourth
Quarter
For the Period from June 20, 2018 (inception) through December 31, 2018
Operating costs
$ 1,027 $ 152,582 $ 2,371,756
Unrealized gain (loss) on marketable securities
$ $ (48,430 ) $ 110,802
Interest income
$ $ 738,355 $ 3,774,177
Net income (loss)
$ (1,027 ) $ 424,717 $ 817,815
Basic and diluted loss per share
$ (0.00 ) $ (0.01 ) $ (0.11 )
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CHURCHILL CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS
NOTE 12. SUBSEQUENT EVENTS
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
On January 14, 2019, the Company entered into the Merger Agreement by and among the Company, Clarivate; CCC Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Delaware Merger Sub”); and Camelot Merger Sub (Jersey) Limited, a wholly owned subsidiary of Holdings (“Jersey Merger Sub”). On February 26, 2019, the parties entered into Amendment No. 1 to the Merger Agreement to make certain technical amendments to the Merger Agreement.
Pursuant to the Merger Agreement, a business combination between the Company and Clarivate will be effected through (i) the merger of Jersey Merger Sub with and into Clarivate with Clarivate being the surviving company in the merger (the “Jersey Merger”), in connection with which affiliates of Onex Partners Managers LP (the “Onex Shareholders”), an affiliate of Baring Private Equity Asia Group Limited (the “Baring Shareholder”) and the management shareholders of Clarivate (together with the Onex Shareholders and the Baring Shareholder, the “Clarivate Owners”) will be issued an aggregate of 217,500,000 ordinary shares of Holdings (the “Ordinary Shares”) and (ii) the merger of Delaware Merger Sub with and into the Company with the Company being the surviving corporation in the merger. In connection with the Mergers, each stockholder of the Company will receive one Ordinary Share for each share of the Company’s common stock that such stockholder owns, and existing warrants to purchase the Company’s common stock will become warrants (“Holdings Warrants”) exercisable to purchase Ordinary Shares in accordance with the terms thereof. In addition, the number of Ordinary Shares issued to the Clarivate Owners increases by 1 Ordinary Share for every $10 of transaction-related expenses incurred by the Company in excess of an agreed amount.
Consummation of the proposed transactions is conditioned on the Company having at least $5,000,001 of net tangible assets remaining after the closing. In addition, the consummation of the transactions contemplated by the Merger Agreement is conditioned upon, among other things, (i) the waiting period under the Hart-Scott-Rodino Act having expired, (ii) no order, statute, rule or regulation enjoining or prohibiting the consummation of the transactions being in force, (iii) the memorandum of association and articles of association of Holdings having been amended and restated, (iv) the Form F-4 registration statement of Holdings with respect to the registration of the Ordinary Shares and Holdings Warrants having become effective in accordance with the provision of the Securities Act and no stop order having been issued by the SEC which remains in effect with respect to the Form F-4, and no proceeding seeking such a stop order having been threatened or initiated by the SEC which remains pending, (v) the approval for listing by the New York Stock Exchange of the Ordinary Shares and Holdings Warrants to be issued in connection with the business combination having been obtained; (vi) the Company having at least $550,000,000 of cash after giving effect to payment of amounts that the Company will be required to pay to redeeming stockholders upon consummation of the proposed transactions and certain other fees and expenses described in the Merger Agreement; and (vii) the approval of the Company’s stockholders of the transactions contemplated by the Merger Agreement having been obtained.
The Company has engaged the Klein Group to act as the Company’s financial advisor in connection with the Mergers. Pursuant to this engagement, the Company will pay the Klein Group an advisory fee of $12.5 million, which shall be earned upon the closing of the Mergers ($7.5 million of such fee to be payable upon the closing of the Mergers, $2.5 million of such fee to be payable on January 31, 2020 and the final $2.5 million of such fee to be payable on January 29, 2021). The payment of such fee is conditioned upon the completion of the Mergers. The engagement of the Klein Group and the payment of the advisory fee has been approved by the Company’s audit committee and board of directors in accordance with the Company’s related persons transaction policy. The Company and the other parties to the letter agreement entered into at the time of the Initial Public Offering (the “Letter Agreement”) amended the Letter Agreement to permit the engagement of the Klein Group described above.
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Annex A-1​
AGREEMENT AND PLAN OF MERGER
dated as of
January 14, 2019
by and among
CHURCHILL CAPITAL CORP,
CLARIVATE ANALYTICS PLC,
CAMELOT HOLDINGS (JERSEY) LIMITED,
CCC MERGER SUB, INC.,
and
CAMELOT MERGER SUB (JERSEY) LIMITED

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Article I
CERTAIN DEFINITIONS
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Article II
THE JERSEY MERGER
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Article III
THE DELAWARE MERGER; CLOSING
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Article IV
EFFECTS OF THE DELAWARE MERGER
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Article V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Article VI
REPRESENTATIONS AND WARRANTIES
OF Holdings, JERSEY MERGER SUB AND DELAWARE MERGER SUB
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Article VII
REPRESENTATIONS AND WARRANTIES
OF ACQUIROR
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Article VIII
COVENANTS OF THE COMPANY AND HOLDINGS
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Article IX
COVENANTS OF ACQUIROR
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Article X
JOINT COVENANTS
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Article XI
CONDITIONS TO OBLIGATIONS
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Article XII
TERMINATION/EFFECTIVENESS
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MISCELLANEOUS
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EXHIBITS
Exhibit A – Form of Registration Rights Agreement
Exhibit B – Form of Nominating Agreement
Exhibit C – Form of Jersey Transfer Instrument
Exhibit D – Form of Delaware Certificate of Merger
Exhibit E – Form of Tax Receivable Agreement
Exhibit F
Form of Amended and Restated Memorandum of Association and Articles of Association of Holdings
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this “ Agreement ”), dated as of January 14, 2019, is entered into by and among Churchill Capital Corp, a Delaware corporation (“ Acquiror ”), Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (“ Holdings ”), Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey (the “ Company ”), CCC Merger Sub, Inc., a Delaware corporation (“ Delaware Merger Sub ”), and Camelot Merger Sub (Jersey) Limited), a private limited company organized under the laws of the Island of Jersey (“ Jersey Merger Sub ”). Except as otherwise indicated, capitalized terms used but not defined herein shall have the meanings set forth in Article I of this Agreement.
RECITALS
WHEREAS, Acquiror is a blank check company incorporated to acquire one or more operating businesses through a Business Combination;
WHEREAS, Holdings is a newly formed entity owned 50% by Onex Partners IV LP and 50% by Onex Partners IV GP LP, and was formed for the purpose of the Transactions, and the parties hereto have agreed that it is desirable to utilize Holdings to effectuate the Jersey Merger and the Delaware Merger and for Holdings to register with the SEC to become a publicly traded company;
WHEREAS, Jersey Merger Sub is a newly formed, wholly owned, direct subsidiary of Holdings, and was formed for the sole purpose of the Jersey Merger;
WHEREAS, Delaware Merger Sub is a newly formed, wholly owned, direct subsidiary of Holdings, and was formed for the sole purpose of the Delaware Merger;
WHEREAS, subject to the terms and conditions hereof, (i) immediately prior to the Closing, Jersey Merger Sub is to merge with and into the Company pursuant to the Jersey Merger, with the Company surviving as the Surviving Jersey Company, and (ii) at the Closing, Delaware Merger Sub is to merge with and into Acquiror pursuant to the Delaware Merger, with Acquiror surviving as the Surviving Delaware Company;
WHEREAS, in connection with the Transactions, Acquiror, Holdings, the Sponsors and certain Company Shareholders are to enter into the Amended and Restated Registration Rights Agreement at Closing in the form attached hereto as Exhibit A (the “ Registration Rights Agreement ”);
WHEREAS, in connection with the Transactions, Holdings and Jerre Stead are to enter into a Director Nomination Agreement at Closing in the form attached hereto as Exhibit B (the “ Nominating Agreement ”);
WHEREAS, contemporaneously with execution of this Agreement, certain Company Shareholders and the Company entered into an amended and restated shareholders agreement with Holdings (the “ Shareholders Agreement ”), to become effective at the Closing;
WHEREAS, contemporaneously with execution of this Agreement, the Sponsors, Acquiror, the Company and Holdings have entered into the Sponsor Agreement (as defined below);
WHEREAS, the respective boards of directors or similar governing bodies of each of Acquiror, Holdings, Delaware Merger Sub, the Company and Jersey Merger Sub have each approved and declared advisable the Transactions upon the terms and subject to the conditions of this Agreement and in accordance with, as applicable, the Delaware General Corporation Law (the “ DGCL ”) and the Jersey Companies Law;
WHEREAS, in furtherance of the Transactions, Acquiror shall provide an opportunity to its stockholders to have their Acquiror Common Stock redeemed for the consideration, and on the terms and subject to the conditions and limitations, set forth in this Agreement, the Acquiror Organizational Documents, the Trust Agreement, and the Proxy Statement/Prospectus in conjunction with, inter alia , obtaining approval from the stockholders of Acquiror for the Business Combination (the “ Offer ”);
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WHEREAS, each of the parties intends that, for U.S. federal income tax purposes, (i) this Agreement is intended to constitute a “plan of reorganization” within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”) and Treasury Regulations promulgated thereunder, (ii) the Delaware Merger shall constitute a “reorganization” within the meaning of Section 368(a) of the Code and (iii) the Delaware Merger, taken together with the Jersey Merger, shall constitute a transaction that qualifies under Section 351 of the Code (clauses (ii) and (iii), the “ Intended Tax Treatment ”); and
WHEREAS, each of the parties intends that each of the Jersey Merger and the Delaware Merger is intended to qualify as a foreign merger within the meaning of subsection 87(8.1) of the Income Tax Act (Canada).
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, Acquiror, Holdings, Delaware Merger Sub, the Company and Jersey Merger Sub agree as follows:
Article I
CERTAIN DEFINITIONS
1.01 Definitions . As used herein, the following terms shall have the following meanings:
Acquiror ” has the meaning specified in the preamble hereto.
Acquiror Board ” means the board of directors of Acquiror.
Acquiror Common Share ” has the meaning specified in Section 4.01(a) .
Acquiror Common Stock ” means Acquiror’s common stock, par value $0.0001 per share.
Acquiror Cure Period ” has the meaning specified in Section 12.01(c) .
Acquiror Organizational Documents ” means the Certificate of Incorporation and Acquiror’s bylaws.
Acquiror Representations ” means the representations and warranties of Acquiror expressly and specifically set forth in Article VII of this Agreement, as qualified by the Schedules. For the avoidance of doubt, the Acquiror Representations are solely made by Acquiror.
Acquiror Stockholder ” means a holder of Acquiror Common Stock.
Acquiror Stockholder Approval ” has the meaning specified in Section 7.02(b) .
Acquiror Warrant ” means a warrant entitling the holder to purchase one share of Acquiror Common Stock per warrant.
Acquisition Transaction ” has the meaning specified in Section 10.03(a) .
Action ” means any claim, action, suit, assessment, arbitration or proceeding, in each case that is by or before any Governmental Authority.
Affiliate ” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise.
Affiliate Agreement ” has the meaning specified in Section 5.21 .
Agreement ” has the meaning specified in the preamble hereto.
Anti-Corruption Laws ” means any applicable Laws relating to anti-bribery or anti-corruption (governmental or commercial), including Laws that prohibit the corrupt payment, offer, promise, or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any representative of a foreign Governmental Authority or commercial entity to obtain a business advantage, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010, and all national and international Laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.
Audited Financial Statements ” has the meaning specified in Section 5.07 .
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Available Closing Date Cash ” means, as of immediately prior to the Closing, an aggregate amount equal to the result of  (without duplication) (i) the cash available to be released from the Trust Account, minus (ii) the sum of all payments to be made as a result of the completion of the Offer and any redemptions or conversions of Acquiror Common Stock by any Converting Stockholders, minus (iii) the Outstanding Acquiror Expenses, minus (iv) to the extent not included in the Outstanding Acquiror Expenses, the sum of all outstanding deferred, unpaid or contingent underwriting, broker’s or similar fees, commissions or expenses owed by Acquiror, the Sponsors or their respective Affiliates (to the extent Acquiror or any of its Subsidiaries is responsible for or obligated to reimburse or repay any such amounts), plus (v) the aggregate amount of cash received by Acquiror from JMJS Group – II, LP and Michael Klein pursuant to Section 5(a) of the Sponsor Agreement. For the avoidance of doubt, Available Closing Date Cash shall not be reduced by the Outstanding Company Expenses to be paid in accordance with Section 4.07(a) ; provided, however, that monies that are released from the Trust Account immediately following the Closing may be used to pay Outstanding Company Expenses.
Business Combination ” has the meaning ascribed to such term in the Certificate of Incorporation.
Business Combination Proposal ” has the meaning set forth in Section 10.03(b) .
Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or the Island of Jersey are authorized or required by Law to close.
Certificate ” has the meaning specified in Section 4.02(a) .
Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of Acquiror, filed with the Secretary of State of the State of Delaware on September 6, 2018.
Claim ” means any demand, claim, action, legal, judicial or administrative proceeding (whether at law or in equity) or arbitration.
Closing ” has the meaning specified in Section 3.03 .
Closing Date ” has the meaning specified in Section 3.03 .
Closing Date Certificate ” has the meaning specified in Section 3.06 .
Code ” has the meaning specified in the Recitals hereto.
Company ” has the meaning specified in the preamble hereto.
Company Benefit Plan ” has the meaning specified in Section 5.13(a) .
Company Certificate ” has the meaning specified in Section 2.04(a) .
Company Cure Period ” has the meaning specified in Section 12.01(b) .
Company Option ” means an option to purchase Company Shares granted pursuant to the Company Stock Plan.
Company Representations ” means the representations and warranties of the Company expressly and specifically set forth in Article V of this Agreement, as qualified by the Schedules. For the avoidance of doubt, the Company Representations are solely made by the Company.
Company Share ” means an ordinary share in the capital of the Company.
Company Shareholder ” means a holder of Company Shares.
Company Shareholders Agreement ” means that certain Shareholders Agreement, dated as of October 3, 2016, by and among the Company and the Company Shareholders listed on the Shareholder Schedule thereto.
Company Stock Plan ” means the Camelot Holdings (Jersey) Limited 2016 Equity Incentive Plan.
Confidentiality Agreement ” has the meaning specified in Section 13.09 .
Contracts ” means any legally binding contracts, agreements, subcontracts, leases, and purchase orders.
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Converting Stockholder ” means an Acquiror Stockholder who demands that Acquiror convert its Acquiror Common Stock into cash in connection with the transactions contemplated hereby and in accordance with the Acquiror Organizational Documents.
DGCL ” has the meaning specified in the Recitals hereto.
Delaware Certificate of Merger ” has the meaning specified in Section 3.01 .
Delaware Letter of Transmittal ” has the meaning specified in Section 4.02(a) .
Delaware Merger ” has the meaning specified in in Section 3.01 .
Delaware Merger Effective Time ” has the meaning specified in Section 3.01 .
Delaware Merger Sub ” has the meaning specified in the preamble hereto.
Effective Date ” means the effective date of the Form F-4.
Environmental Laws ” means any and all applicable Laws relating to pollution or protection of the environment (including natural resources) or the use, storage, emission, disposal or release of Hazardous Materials, each as in effect on and as interpreted as of the date hereof.
ERISA ” has the meaning specified in Section 5.13(a) .
Excess Expenses ” means (a) the sum of the amounts described in clauses (iii) and (iv) of the definition of Available Closing Date Cash minus (b) the amount set forth on Schedule 1.01(b) .
Exchange Act ” means the Securities Exchange Act of 1934, as amended.
Exchange Ratio ” means (a) (i) the amount of Excess Expenses divided by $10.00 plus (ii) 217,500,000 divided by (b) 1,645,890.01, which is formulaically expressed as:
Exchange Ratio = [(the amount of Excess Expenses / $10.00) + 217,500,000] / 1,645,890.01
If the amount of Excess Expenses is zero or a negative number, the amount calculated in clause (i) above shall be zero. The number referred to in clause (b) above shall be equitably adjusted in the event that any Company Options are exercised after the date hereof.
Excluded Shares ” means shares of Acquiror Common Stock, if any, (i) held in the treasury of Acquiror or (ii) without duplication of clause (i), for which a Converting Stockholder has demanded that Acquiror convert or redeem such shares of Acquiror Common Stock.
Existing Notes ” means the $500,000,000 aggregate principal amount of 7.875% Senior Notes due 2024 issued pursuant to an indenture (the “ Existing Indenture ”) dated as of October 3, 2016 (as amended and/or supplemented) among Camelot Finance S.A., the guarantors party thereto and Wilmington Trust, National Association, as trustee.
Financial Derivative/Hedging Arrangement ” means any transaction (including an agreement with respect thereto) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any combination of these transactions.
Financial Statements ” has the meaning specified in Section 5.07 .
First Lien Credit Facility ” means the Term Loan Facility and the Revolving Credit Facility.
Form F-4 ” means the registration statement on Form F-4 of Holdings with respect to registration of the Holdings Shares and Holdings Warrants to be issued in connection with the Delaware Merger.
GAAP ” means United States generally accepted accounting principles, consistently applied.
Governmental Authority ” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal.
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Governmental Order ” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority.
Hazardous Material ” means material, substance or waste that is listed, regulated, or otherwise defined as “hazardous,” “toxic,” or “radioactive,” or as a “pollutant” or “contaminant” (or words of similar intent or meaning) under applicable Environmental Laws as in effect as of the date hereof, including but not limited to petroleum, petroleum by-products, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable or explosive substances, or pesticides.
Holdings ” has the meaning specified in the preamble hereto.
Holdings Board ” has the meaning specified in Section 8.07 .
Holdings Representations ” means the representations and warranties of Holdings, Delaware Merger Sub and Jersey Merger Sub expressly and specifically set forth in Article VI of this Agreement, as qualified by the Schedules. For the avoidance of doubt, the Holdings Representations are solely made by Holdings, Delaware Merger Sub and Jersey Merger Sub.
Holdings Share ” means an ordinary share of no par value in the capital of Holdings.
Holdings Warrant ” means a warrant entitling the holder to purchase such number of Holdings Share(s) per warrant as set forth therein.
HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness ” means, with respect to any Person, without duplication, any obligations (whether or not contingent) consisting of  (a) the outstanding principal amount of and accrued and unpaid interest on, and other payment obligations for, borrowed money, or payment obligations issued or incurred in substitution or exchange for payment obligations for borrowed money, (b) amounts owing as deferred purchase price for property or services, including “earnout” payments, (c) payment obligations evidenced by any promissory note, bond, debenture, mortgage or other debt instrument or debt security, (d) contingent reimbursement obligations with respect to letters of credit, bankers’ acceptance or similar facilities (in each case to the extent drawn), (e) payment obligations of a third party secured by (or for which the holder of such payment obligations has an existing right, contingent or otherwise, to be secured by) any Lien, other than a Permitted Lien, on assets or properties of such Person, whether or not the obligations secured thereby have been assumed, (f) obligations under capitalized leases, (g) obligations under any Financial Derivative/Hedging Arrangement, (h) guarantees, make-whole agreements, hold harmless agreements or other similar arrangements with respect to any amounts of a type described in clauses (a) through (g) above and (i) with respect to each of the foregoing, any unpaid interest, breakage costs, prepayment or redemption penalties or premiums, or other unpaid fees or obligations; provided, however, that Indebtedness shall not include accounts payable to trade creditors and accrued expenses arising in the ordinary course of business consistent with past practice.
Information or Document Request ” means any request or demand for the production, delivery or disclosure of documents or other evidence, or any request or demand for the production of witnesses for interviews or depositions or other oral or written testimony, by any Regulatory Consent Authority relating to the transactions contemplated hereby or by any third party challenging the transactions contemplated hereby, including any so called “second request” for additional information or documentary material or any civil investigative demand made or issued by the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission or any subpoena, interrogatory or deposition.
Intellectual Property ” means all intellectual property rights created, arising, or protected under applicable Law, including all: (i) patents and patent applications, (ii) trademarks, service marks and trade names, (iii) copyrights, (iv) internet domain names and (v) trade secrets.
Intended Tax Treatment ” has the meaning specified in the Recitals hereto.
Interim Period ” has the meaning specified in Section 8.01 .
IT Systems ” has the meaning specified in Section 5.11(d) .
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Jersey Companies Law ” means the Companies (Jersey) Law 1991, as amended or restated from time to time.
Jersey Merger ” has the meaning specified in Section 2.01(a) .
Jersey Merger Effective Time ” means the effective time of the Jersey Merger, which will occur when the last entry is made on the register of Jersey companies in relation to the Jersey Merger by the registrar of Jersey companies in accordance with Article 127FM of the Jersey Companies Law.
Jersey Merger Pre-Conditions ” means (a) the Company has given notice to all creditors of the Jersey Merger in accordance with Article 127FC(1) of the Jersey Companies Law; (b) Jersey Merger Sub has given notice to all creditors of the Jersey Merger in accordance with Article 127FC(1) of the Jersey Companies Law; (c) the Company has obtained the approval of the Company Shareholders by way of special resolution; and (d) the Jersey Merger Sub has obtained the approval of Onex Partners IV LP and Onex Partners IV GP LP by way of special resolution.
Jersey Merger Sub ” has the meaning specified in the preamble hereto.
Jersey Transfer Instrument ” has the meaning specified in Section 2.04(a) .
Law ” means any statute, law, ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
Leased Real Property ” means all real property leased by the Company or its Subsidiaries, the lease of which may not be terminated at will, or by giving notice of 90 days or less, without cost or penalty.
Lien ” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, security interest or other lien of any kind.
Material Adverse Effect ” means, with respect to the Company, a material adverse effect on (i) the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided , however , that in no event would any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole: (a) any change in applicable Laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, (c) the announcement or the execution of this Agreement, the pendency or consummation of the Delaware Merger or the performance of this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, partners, providers and employees ( provided that the exceptions in this clause (c) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 9.02(a) ), (d) any change generally affecting any of the industries or markets in which the Company or its Subsidiaries operate or the economy as a whole, (e) the compliance with the terms of this Agreement or the taking of any action required or contemplated by this Agreement or with the prior written consent of Acquiror ( provided that the exceptions in this clause (e) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 9.02(a) ), (f) any earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event, (g) any national or international political or social conditions in countries in which, or in the proximate geographic region of which, the Company operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel or (h) any failure of the Company and its Subsidiaries, taken as a whole, to meet any projections, forecasts or budgets; provided , that clause (h) shall not prevent or otherwise affect a determination that any change or effect underlying such failure to meet projections or forecasts has resulted in, or contributed to, or would reasonably be expected to result in or contribute to, a Material Adverse Effect (to the extent such change or
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effect is not otherwise excluded from this definition of Material Adverse Effect), except in the case of clause (a), (b), (d), (f) and (g) to the extent that such change does not have a disproportionate impact on the Company and its Subsidiaries, taken as a whole, as compared to other industry participants or (ii) the ability of the Company to consummate the transactions contemplated hereby in accordance with the terms hereof.
Material Permits ” has the meaning specified in Section 5.23 .
Multiemployer Plan ” has the meaning specified in Section 5.13(e) .
Nominating Agreement ” has the meaning specified in the Recitals hereto.
NYSE ” means the New York Stock Exchange.
Offer ” has the meaning specified in the Recitals hereto.
Outstanding Acquiror Expenses ” has the meaning specified in Section 4.07(b) .
Outstanding Company Expenses ” has the meaning specified in Section 4.07(a) .
Owned Real Property ” has the meaning specified in Section 5.18(a) .
Per Share Delaware Merger Consideration ” means one Holdings Share.
Per Share Jersey Merger Consideration ” has the meaning specified in Section 2.02(a) .
Permits ” means all permits, licenses, certificates of authority, authorizations, approvals, registrations and other similar consents issued by or obtained from a Governmental Authority.
Permitted Liens ” means (i) statutory or common law Liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar Liens that arise in the ordinary course of business, that relate to amounts not yet delinquent or that are being contested in good faith through appropriate Actions, in each case only to the extent appropriate reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iii) Liens for Taxes not yet due and payable or which are being contested in good faith through appropriate Actions, in each case, for which appropriate reserves have been established in accordance with GAAP, (iv) Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that (A) are matters of record, (B) would be disclosed by a current, accurate survey or physical inspection of such real property, or (C) do not materially interfere with the present uses of such real property, (v) Liens that (A) were not incurred in connection with indebtedness for borrowed money and (B) are not material to the Company and its Subsidiaries, taken as a whole, (vi) non-exclusive licenses of Intellectual Property entered into in the ordinary course of business and (vii) Liens described on Schedule 1.01(a) .
Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.
Proposals ” has the meaning specified in Section 10.02(c) .
Proxy Statement ” means the proxy statement filed by Acquiror on Schedule 14A with respect to the Special Meeting to approve the Proposals.
Proxy Statement/Prospectus ” means the proxy statement/prospectus included in the Form F-4, including the Proxy Statement, relating to the transactions contemplated by this Agreement which shall constitute a proxy statement of the Acquiror to be used for the Special Meeting to approve the Proposals (which shall also provide the Acquiror Stockholders with the opportunity to redeem their shares of Acquiror Common Stock in conjunction with a stockholder vote on the Business Combination) and a prospectus with respect to the Holdings Shares to be offered and issued to the Acquiror Stockholders (other than the Sponsors) and the effect of the Transactions on the Acquiror Warrants pursuant to Section 4.04 , in all cases in accordance with and as required by the Acquiror Organizational Documents, applicable Law, and the rules and regulations of the NYSE.
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Real Estate Lease Documents ” has the meaning specified in Section 5.18(b) .
Real Property ” has the meaning specified in Section 5.18(a) .
Registered Intellectual Property ” has the meaning specified in Section 5.11(a) .
Registration Rights Agreement ” has the meaning specified in the Recitals hereto.
Regulatory Consent Authorities ” means the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission, as applicable.
Representative ” means, as to any Person, any of the officers, directors, managers, employees, counsel, accountants, financial advisors, lenders, debt financing sources and consultants of such Person.
Revolving Credit Facility ” means that certain first lien senior secured revolving credit facility in an aggregate principal amount of  $175 million, with a letter of credit sublimit of  $25 million, to be borrowed by certain of the borrowers thereunder, as amended to date.
Rollover Options ” has the meaning specified in Section 2.06 .
Schedules ” means the disclosure schedules of the Company and its Subsidiaries.
SEC ” means the United States Securities and Exchange Commission.
SEC Clearance Date ” means the date on which the SEC has declared the Form F-4 effective and has confirmed that it has no further comments on the Proxy Statement.
SEC Reports ” has the meaning specified in Section 7.08(a) .
Securities Act ” means the Securities Act of 1933, as amended.
Securities Laws ” means the securities laws of any state, federal or foreign entity and the rules and regulations promulgated thereunder.
Shareholders Agreement ” has the meaning specified in the Recitals hereto.
Significant Subsidiary ” means any direct or indirect Subsidiary of the Company which would qualify as a “significant subsidiary” pursuant to Rule 1-02(w) of Regulation S-X.
Software ” means any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (d) all documentation including user manuals and other training documentation relating to any of the foregoing.
Special Meeting ” means a meeting of the holders of Acquiror Common Stock to be held for the purpose of approving the Proposals.
Specified Representations ” has the meaning specified in Section 11.02(a)(i) .
Sponsor ” means each of Jerre Stead, Michael Klein, Sheryl von Blucher, Martin Broughton, Karen G. Mills, Balakrishnan S. Iyer, M. Klein Associates, Inc., Garden State Capital Partners LLC, The Iyer Family Trust dated 1/25/2001, Mills Family I, LLC, K&BM LP and Churchill Sponsor LLC.
Sponsor Agreement ” means that certain Amended and Restated Letter Agreement, dated as of the date hereof, by and among the Sponsors, Acquiror, Holdings and the Company, as amended or modified from time to time.
Sponsor Share ” means a share of Acquiror Common Stock held by any of the Sponsors as of immediately prior to the Delaware Merger Effective Time.
Sponsor Warrant ” means an Acquiror Warrant held by any of the Sponsors as of immediately prior to the Delaware Merger Effective Time.
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Subsidiary ” means, with respect to a Person, any corporation or other organization (including a limited liability company or a partnership), whether incorporated or unincorporated, of which such Person directly or indirectly owns or controls a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization or any organization of which such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.
Surviving Delaware Company ” has the meaning specified in Section 3.01 .
Surviving Jersey Company ” has the meaning specified in Section 2.01(b) .
Surviving Provisions ” has the meaning specified in Section 12.02 .
Tax ” means any federal, state, provincial, territorial, local, foreign and other net income tax, alternative or add-on minimum tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax) ad valorem, transfer, franchise, license, excise, severance, stamp, occupation, premium, personal property, real property, capital stock, profits, disability, registration, value added, estimated, customs duties, escheat, and sales or use tax, or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed with respect thereto by a Governmental Authority, whether as a primary obligor or as a result of being a transferee or successor of another Person or a member of an affiliated, consolidated, unitary, combined or other group or pursuant to Law, Contract or otherwise.
Tax Receivable Agreement ” means the agreement to be entered into among the Company Shareholders party thereto, the Company and Onex Partners IV LP, as TRA Party Representative, in substantially the form attached hereto as Exhibit E .
Tax Return ” means any return, report, statement, refund, claim, declaration, information return, statement, estimate or other document filed or required to be filed with respect to Taxes, including any schedule or attachment thereto and including any amendments thereof.
Term Loan Facility ” means that certain first lien senior secured term loan facility, originally in an aggregate principal amount of  $1,550 million, which was borrowed by Camelot Cayman LP, Camelot Finance S.A. and certain Subsidiaries of the Company named therein, as amended to date.
Terminating Acquiror Breach ” has the meaning specified in Section 12.01(c) .
Terminating Company Breach ” has the meaning specified in Section 12.01(b) .
Termination Date ” has the meaning specified in Section 12.01(b) .
Transactions ” means the transactions contemplated by this Agreement to occur at or immediately prior to the Closing, including the Jersey Merger and the Delaware Merger.
Treasury Regulations ” means the regulations promulgated under the Code.
Trust Account ” has the meaning specified in Section 7.06(a) .
Trust Agreement ” has the meaning specified in Section 7.06(a) .
Trustee ” has the meaning specified in Section 7.06(a) .
Unaudited Financial Statements ” has the meaning specified in Section 5.07 .
Warrant Agreement ” means that certain Warrant Agreement, dated as of September 6, 2018, between Acquiror and Continental Stock Transfer & Trust Company, a New York corporation.
1.02 Construction .
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer
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to this entire Agreement, (iv) the terms “Article”, “Section”, “Schedule”, “Exhibit” and “Annex” refer to the specified Article, Section, Schedule, Exhibit or Annex of or to this Agreement unless otherwise specified, (v) the word “including” shall mean “including without limitation” and (vi) the word “or” shall be disjunctive but not exclusive.
(b) Unless the context of this Agreement otherwise requires, references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto.
(c) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(d) The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.
(e) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(f) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
(g) The phrases “provided to,” “furnished to,” “made available” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred to has been provided no later than 9:00 a.m. on January 14, 2019 to the party to which such information or material is to be provided or furnished (i) in the virtual “data room” set up by the Company in connection with this Agreement or (ii) by delivery to such party or its legal counsel via electronic mail or hard copy form.
1.03 Knowledge . As used herein, the phrase “to the knowledge” shall mean the actual knowledge of, in the case of the Company, Jay Nadler, Richard Hanks and Stephen Hartman and, in the case of Acquiror, Jerre Stead, Michael Klein and Sheryl von Blucher.
1.04 Equitable Adjustments . If, between the date of this Agreement and the Closing, the outstanding Holdings Shares, Company Shares or shares of Acquiror Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event shall have occurred, then any number, value (including dollar value) or amount contained herein which is based upon the number of Holdings Shares, Company Shares or shares of Acquiror Common Stock will be appropriately adjusted to provide to the holders of Company Shares and the holders of Acquiror Common Stock the same economic effect as contemplated by this Agreement prior to such event; provided, however, that this Section 1.04 shall not be construed to permit Acquiror, Holdings, the Company, Delaware Merger Sub or Jersey Merger Sub to take any action with respect to their respective securities that is prohibited by the terms and conditions of this Agreement.
ARTICLE II
THE JERSEY MERGER
2.01 Jersey Merger . Immediately prior to the Closing and subject to the provisions of this Agreement and complying with the Jersey Merger Pre-Conditions:
(a) Jersey Merger Sub shall merge with and into the Company in accordance with the Jersey Companies Law (the “ Jersey Merger ”). Holdings, the Company and Jersey Merger Sub shall cause the Jersey Merger to be consummated by filing the necessary documentation in accordance with Jersey Companies Law.
(b) The Company will be the surviving company (the “ Surviving Jersey Company ”) and, upon the Jersey Merger Effective Time, (i) all property and rights to which the Company and Jersey Merger Sub were entitled immediately before the Jersey Merger Effective Time will become the property and right
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of the Company; (ii) the Company will become subject to all criminal and civil liabilities and all contracts, debts and other obligations, to which each of the Company and Jersey Merger Sub were subject immediately before the Jersey Merger Effective Time; (iii) all actions and other legal proceedings which, immediately before the Jersey Merger Effective Time, were pending by or against the Company and Jersey Merger Sub may be continued by or against the Company; and (iv) the Company shall remain as a private limited company organized under the laws of the Island of Jersey, retain its name as “Camelot Holdings (Jersey) Limited” and retain its registered address at St Paul’s Gate, 22-24 New Street, 4 th Floor, St. Helier, Jersey JE1 4TR.
(c) Upon the Jersey Merger Effective Time, the directors of the Surviving Jersey Company will be:
(i) Stephen Hartman of c/o Clarivate Analytics, Friars House, 160 Blackfriars Road, London SE1 8 EZ United Kingdom; and
(ii) Andrew Wright of c/o Clarivate Analytics, Friars House, 160 Blackfriars Road, London SE1 8 EZ United Kingdom.
(d) Upon the Jersey Merger Effective Time, all of the directors of the Company immediately prior to the Jersey Merger Effective Time shall cease to be directors of the Company.
2.02 Conversion of Company Shares; Effects of the Jersey Merger . Subject to the provisions of this Agreement and upon the Jersey Merger Effective Time:
(a) Holdings will become the sole shareholder of the Company, as the Surviving Jersey Company, and a share or stock swap shall occur so that each Company Share will thereby be surrendered to Holdings and the holder of such Company Share shall be entitled to be issued for such Company Share a number of Holdings Shares equal to the Exchange Ratio (the “ Per Share Jersey Merger Consideration ”), with any fraction of a Holdings Share in respect of each holder’s aggregate Company Shares rounded off to the nearest whole Holdings Share;
(b) each share in the capital of Jersey Merger Sub shall be converted into one ordinary share in the capital of the Surviving Jersey Company;
(c) each Company Share held in the treasury of the Company immediately prior to the Jersey Merger Effective Time shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto;
(d) the memorandum of association and articles of association of the Company shall be the memorandum of association and articles of association of the Surviving Jersey Company; and
(e) no assets of the Company shall be distributed in the Jersey Merger.
2.03 Company Shareholders’ Rights Upon the Jersey Merger . Upon consummation of the Jersey Merger, each Company Shareholder shall, subject to applicable Laws and this Agreement, cease to have any rights with respect to any share certificate evidencing such Company Shareholder’s title to one or more Company Shares, and to any Company Shares evidenced thereby, other than the right to receive a share certificate for Holdings Shares.
2.04 Delivery of Per Share Jersey Merger Consideration .
(a) As promptly as reasonably practicable after the date of this Agreement, Holdings shall cause to be mailed to each holder of record of Company Shares a transfer instrument in substantially the form attached hereto as Exhibit C (the “ Jersey Transfer Instrument ”), which shall (i) have customary representations and warranties as to title, authorization, execution and delivery, (ii) include, in the case of each Jersey Transfer Instrument to be executed by an individual who was a Management Shareholder (as defined in the Company Shareholders Agreement) prior to the Jersey Merger Effective Time, a joinder, effective as of the Closing, to the Registration Rights Agreement and Shareholders Agreement and (iii) specify that delivery shall be effected, and risk of loss and title to the Company Shares shall pass, only upon delivery of the Company Shares to Holdings (including all certificates representing Company Shares (each, a “ Company Certificate ” and, collectively, the “ Company Certificates ”), to the extent such Company Shares are certificated), together with instructions thereto.
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(b) Upon the receipt of a Jersey Transfer Instrument (accompanied with all Company Certificates representing Company Shares of the holder of such Company Shares, to the extent such Company Shares are certificated) duly, completely and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by Holdings, the holder of such Company Shares shall be entitled to receive in exchange therefor, the Per Share Jersey Merger Consideration into which such Company Shares have been converted pursuant to Section 2.02(a) . Until surrendered as contemplated by this Section 2.04(b) , each Company Share shall be deemed at any time from and after the Jersey Merger Effective Time to represent only the right to receive upon such surrender the Per Share Jersey Merger Consideration which the holders of Company Shares were entitled to receive in respect of such shares pursuant to this Section 2.04(b) .
2.05 Lost Certificate . In the event any Company Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Company Certificate to be lost, stolen or destroyed and, if required by Holdings, the provision by such Person of a customary indemnity against any claim that may be made against Holdings with respect to such Company Certificate, and Holdings shall issue in exchange for such lost, stolen or destroyed Company Certificate the Per Share Jersey Merger Consideration, deliverable in respect thereof as determined in accordance with this Article II .
2.06 Conversion of Company Options . Effective as of the Jersey Merger Effective Time, each Company Option, to the extent then outstanding and unexercised, shall automatically, without any action on the part of the holder thereof, be cancelled and converted into and thereafter evidence an option to purchase Holdings Shares with respect to that number of Holdings Shares that is equal to the product of (a) the number of Company Shares subject to such Company Option as of immediately prior to the Jersey Merger Effective Time, multiplied by (b) the Exchange Ratio, rounded down to the nearest whole number of Holdings Shares (after such conversion, “ Rollover Options ”), at an exercise price per Holdings Share equal to the quotient obtained by dividing (x) the per share exercise price of such Company Option by (y) the Exchange Ratio, rounded up to the nearest whole cent. Notwithstanding the foregoing, the conversion described in this Section 2.06 will be subject to such modifications, if any, as are required to cause the conversion to be made in a manner consistent with the requirements of Treasury Regulation Section 1.409A-1(b)(5)(v)(D). Following the Jersey Merger Effective Time, each Rollover Option shall be subject to the management equity incentive plan of Holdings in effect upon the Jersey Merger Effective Time and to the same terms and conditions as had applied to the corresponding Company Option as of immediately prior to the Jersey Merger Effective Time, except for such terms rendered inoperative by reason of the Transactions, subject to such adjustments as reasonably determined by the Holdings Board to be necessary or appropriate to give effect to the conversion or the Transactions.
ARTICLE III
THE DELAWARE MERGER; CLOSING
3.01 Delaware Merger . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, immediately following the consummation of the Jersey Merger, Holdings and Delaware Merger Sub shall cause Delaware Merger Sub to be merged with and into Acquiror (the “ Delaware Merger ”), with Acquiror being the surviving corporation (which is sometimes hereinafter referred to for the periods at and after the Delaware Merger Effective Time as the “ Surviving Delaware Company ”) following the Delaware Merger and the separate corporate existence of Delaware Merger Sub shall cease. The Delaware Merger shall be consummated in accordance with this Agreement and the DGCL and evidenced by a Certificate of Delaware Merger between Delaware Merger Sub and Acquiror in the form of Exhibit D (the “ Delaware Certificate of Merger ”), such Delaware Merger to be consummated immediately upon filing of the Delaware Certificate of Merger or at such later time as may be agreed by Acquiror and the Company in writing and specified in the Delaware Certificate of Merger (the “ Delaware Merger Effective Time ”).
3.02 Effects of the Delaware Merger . The Delaware Merger shall have the effects set forth in this Agreement and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Delaware Merger Effective Time, all the property, rights, privileges, powers and franchises of Delaware Merger Sub shall vest in the Surviving Delaware Company, and all debts, liabilities and duties of Delaware Merger Sub shall become the debts, liabilities and duties of the Surviving Delaware Company.
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3.03 Closing . Subject to the terms and conditions of this Agreement, the closing of the Delaware Merger (the “ Closing ”) shall take place electronically through the exchange of documents via e-mail or facsimile on the date which is three Business Days after the date on which all conditions set forth in Article XI shall have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof) or such other time and place as Acquiror and the Company may mutually agree in writing. The date on which the Closing actually occurs is referred to in this Agreement as the “ Closing Date .” Subject to the satisfaction or waiver of all of the conditions set forth in Article XI of this Agreement, and provided this Agreement has not theretofore been terminated pursuant to its terms, on the Closing Date, Acquiror, Holdings and Delaware Merger Sub shall cause the Delaware Certificate of Merger to be executed, acknowledged and filed with the Secretary of State of the State of Delaware as provided in Sections 251 and 103 of the DGCL.
3.04 Certificate of Incorporation and Bylaws of the Surviving Delaware Company . At the Delaware Merger Effective Time, (i) the certificate of incorporation of Acquiror as in effect immediately prior to the Delaware Merger Effective Time shall be amended and restated as set forth in the Delaware Certificate of Merger, until thereafter amended in accordance with its terms and as provided by the DGCL, and (ii) the bylaws of Acquiror as in effect immediately prior to the Delaware Merger Effective Time shall be amended and restated to be identical to the bylaws of Delaware Merger Sub in effect immediately prior to the Delaware Merger Effective Time, except that references to the name of Delaware Merger Sub shall be replaced with references to the name of Acquiror, until thereafter amended as provided therein or by the DGCL.
3.05 Directors and Officers of the Surviving Delaware Company . Immediately prior to the Delaware Merger Effective Time, each of Holdings and Delaware Merger Sub shall cause the individuals set forth on Schedule 3.05 to be designated or appointed as the directors and officers of Delaware Merger Sub immediately prior to the Delaware Merger Effective Time, and such individuals shall be the directors and officers of the Surviving Delaware Company until the earlier of their resignation or removal or until their respective successors are duly elected and qualified.
3.06 Closing Date Certificate . No sooner than five or later than two Business Days prior to the Closing Date, Acquiror shall deliver to Holdings and the Company a certificate (the “ Closing Date Certificate ”), duly executed and certified by an executive officer of Acquiror, which sets forth Acquiror’s good faith calculation of the Available Closing Date Cash (including supporting detail thereof) and the Exchange Ratio, in each case, determined in accordance with the definitions set forth in this Agreement.
ARTICLE IV
EFFECTS OF THE DELAWARE MERGER
4.01 Conversion of Shares of Acquiror Common Stock and Delaware Merger Sub Stock .
(a) At the Delaware Merger Effective Time, by virtue of the Delaware Merger and without any action on the part of any Acquiror Stockholder, each share of Acquiror Common Stock (an “ Acquiror Common Share ”) that is issued and outstanding immediately prior to the Delaware Merger Effective Time (other than any Excluded Shares, which shall not constitute “Acquiror Common Shares” hereunder), shall thereupon be converted into, and the holder of such Acquiror Common Share shall be entitled to receive, the Per Share Delaware Merger Consideration for such Acquiror Common Share. All of the shares of Acquiror Common Stock converted into the right to receive the Per Share Delaware Merger Consideration pursuant to this Article IV shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a Certificate previously representing any such shares of Acquiror Common Stock shall thereafter cease to have any rights with respect to such securities, except the right to receive the Per Share Delaware Merger Consideration into which such shares of Acquiror Common Stock shall have been converted in the Delaware Merger.
(b) At the Delaware Merger Effective Time, by virtue of the Delaware Merger and without any action on the part of Holdings or Delaware Merger Sub, each share of common stock, par value $0.0001 per share, of Delaware Merger Sub shall no longer be outstanding and shall thereupon be converted into and become one share of common stock, par value $0.0001 per share, of the Surviving Delaware Company.
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(c) At the Delaware Merger Effective Time, by virtue of the Delaware Merger and without any action on the part of any holder of Excluded Shares, each Excluded Share shall be surrendered and cancelled and shall cease to exist and no consideration shall be delivered or deliverable in exchange therefor.
4.02 Delivery of Per Share Delaware Merger Consideration .
(a) As promptly as reasonably practicable after the Delaware Merger Effective Time, Holdings shall cause to be mailed to each holder of record of Acquiror Common Shares a letter of transmittal in customary form to be approved by Acquiror (such approval not to be unreasonably withheld, conditioned, or delayed) prior to the Closing (the “ Delaware Letter of Transmittal ”), which shall (i) have customary representations and warranties as to title, authorization, execution and delivery and (ii) specify that delivery shall be effected, and risk of loss and title to the Acquiror Common Shares shall pass, only upon delivery of the Acquiror Common Shares to Holdings (including all certificates representing Acquiror Common Shares (each, a “ Certificate ” and, collectively, the “ Certificates ”), to the extent such Acquiror Common Shares are certificated), together with instructions thereto.
(b) Upon the receipt of a Delaware Letter of Transmittal (accompanied with all Certificates representing Acquiror Common Shares of the holder of such Acquiror Common Shares, to the extent such Acquiror Common Shares are certificated) duly, completely and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by Holdings, the holder of such Acquiror Common Shares shall be entitled to receive in exchange therefor (i) the Per Share Delaware Merger Consideration into which such Acquiror Common Shares have been converted pursuant to Section 4.01(a) and (ii) dividends declared after the Delaware Merger Effective Time which are unpaid, if any. Until surrendered as contemplated by this Section 4.02(b) , each Acquiror Common Share shall be deemed at any time from and after the Delaware Merger Effective Time to represent only the right to receive upon such surrender the Per Share Delaware Merger Consideration which the holders of Acquiror Common Shares were entitled to receive in respect of such shares pursuant to this Section 4.02(b) (plus any dividends declared after the Delaware Merger Effective Time which are unpaid, if any).
4.03 Lost Certificate . In the event any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Holdings, the provision by such Person of a customary indemnity against any claim that may be made against Holdings with respect to such Certificate, and Holdings shall issue in exchange for such lost, stolen or destroyed Certificate the Per Share Delaware Merger Consideration, deliverable in respect thereof as determined in accordance with this Article IV .
4.04 Acquiror Warrants . At the Delaware Merger Effective Time, by virtue of the Delaware Merger and without any action on the part of any holder of Acquiror Warrants, each Acquiror Warrant that is outstanding immediately prior to the Delaware Merger Effective Time shall, pursuant to and in accordance with Section 4.4 of the Warrant Agreement, automatically and irrevocably be modified to provide that such Acquiror Warrant shall no longer entitle the holder thereof to purchase the amount of share(s) of Acquiror Common Stock set forth therein and in substitution thereof such Acquiror Warrant shall entitle the holder thereof to acquire such equal number of Holdings Share(s) per Acquiror Warrant.
4.05 Withholding . Each of Acquiror, Holdings, the Company, the Surviving Delaware Company, the Surviving Jersey Company and their respective Affiliates shall be entitled to deduct and withhold from any cash amounts otherwise deliverable under this Agreement, and from any other consideration otherwise paid or delivered in connection with the transactions contemplated by this Agreement, such amounts that any such Persons are required to deduct and withhold with respect to any of the deliveries and payments contemplated by this Agreement under the Code or any applicable Law. To the extent that Acquiror, Holdings, the Company, the Surviving Delaware Company, the Surviving Jersey Company or their respective Affiliates withholds such amounts with respect to any Person and properly remits such withheld amounts to the applicable Governmental Authority, such withheld amounts shall be treated as having been paid to or on behalf of such Person. In the case of any such payment payable to employees of the Company or its Affiliates prior to the Jersey Merger treated as compensation, the parties shall cooperate to pay such amounts through the Company’s or its Subsidiary’s payroll to facilitate applicable withholding.
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4.06 Fractional Shares . No certificate or scrip representing fractional Holdings Shares shall be issued upon the surrender for exchange of Certificates of Acquiror Common Stock, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of Holdings.
4.07 Payment of Expenses .
(a) No sooner than five or later than two Business Days prior to the Closing Date, the Company shall provide to Acquiror a written report setting forth a list of the following fees and expenses incurred by or on behalf of the Company, Holdings, Jersey Merger Sub or Delaware Merger Sub or the Company Shareholders in connection with the preparation, negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby (together with written invoices and wire transfer instructions for the payment thereof), solely to the extent such fees and expenses are incurred and unpaid as of the close of business on the Business Day immediately preceding the Closing Date: (i) the fees and disbursements of outside counsel to the Company, Holdings, Jersey Merger Sub, Delaware Merger Sub or the Company Shareholders incurred in connection with the Transactions and (ii) the fees and expenses of any other agents, advisors, consultants, experts and financial advisors employed by Holdings, Jersey Merger Sub, Delaware Merger Sub or the Company in connection with the Transactions (collectively, the “ Outstanding Company Expenses ”). On the Closing Date following the Closing, Acquiror shall pay or cause to be paid by wire transfer of immediately available funds all such Outstanding Company Expenses.
(b) No sooner than five or later than two Business Days prior to the Closing Date, Acquiror shall provide to the Company a written report setting forth a list of all fees and disbursements of Acquiror or the Sponsors for outside counsel and fees and expenses of Acquiror or the Sponsors or for any other agents, advisors, consultants, experts and financial advisors employed by or on behalf of Acquiror or the Sponsors in connection with the Transactions (together with written invoices and wire transfer instructions for the payment thereof) (collectively, the “ Outstanding Acquiror Expenses ”). On the Closing Date, Acquiror shall pay or cause to be paid by wire transfer of immediately available funds all such Outstanding Acquiror Expenses. For avoidance of doubt, such Outstanding Acquiror Expenses shall be payable by Acquiror from amounts released from the Trust Account following the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedules to this Agreement (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent), the Company represents and warrants to Acquiror as follows:
5.01 Corporate Organization of the Company .
(a) The Company has been duly incorporated and is validly existing as a private limited company under the Laws of the Island of Jersey and has the requisite power and authority to own, lease and operate its assets and properties and to conduct its business as it is now being conducted. The copies of the memorandum of association and articles of association of the Company previously made available by the Company to Acquiror are true, correct and complete and are in effect as of the date of this Agreement.
(b) The Company is licensed or qualified and in good standing as a foreign company in each jurisdiction in which the ownership of its property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, except where the failure to be so licensed or qualified has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
5.02 Subsidiaries .
(a) The Significant Subsidiaries of the Company as of the date hereof are set forth on Schedule 5.02 , including, as of such date, a description of the capitalization of each such Significant Subsidiary and the names of the beneficial owners of all securities and other equity interests in each
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Significant Subsidiary. Each Significant Subsidiary has been duly formed or organized and is validly existing under the Laws of its jurisdiction of incorporation or organization and has the organizational power and authority to own, lease and operate its assets and properties and to conduct its business as it is now being conducted. Each Significant Subsidiary is duly licensed or qualified and in good standing as a foreign corporation (or other entity, if applicable) in each jurisdiction in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except where the failure to be so licensed or qualified has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) As of the date hereof, except for the Company’s or any of its Subsidiaries’ ownership interest in such Subsidiaries, neither the Company nor its Subsidiaries own any capital stock or any other equity interests in any other Person or has any right, option, warrant, conversion right, stock appreciation right, redemption right, repurchase right, agreement, arrangement or commitment of any character under which a Person is or may become obligated to issue or sell, or give any right to subscribe for or acquire, or in any way dispose of, any shares of the capital stock or other equity interests, or any securities or obligations exercisable or exchangeable for or convertible into any shares of the capital stock or other equity interests, of such Person.
5.03 Due Authorization . The Company has all requisite company power and authority to execute and deliver this Agreement and each ancillary agreement to this Agreement to which it is a party and (subject to the satisfaction of the Jersey Merger Pre-Conditions and subject to the approvals described in Section 5.05 ) to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and such ancillary agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the board of directors of the Company, and no other company proceeding on the part of the Company is necessary to authorize this Agreement or such ancillary agreements or (subject to the satisfaction of the Jersey Merger Pre-Conditions) the Company’s performance hereunder or thereunder. This Agreement has been, and each such ancillary agreement will be, duly and validly executed and delivered by the Company and, assuming due authorization and execution by each other party hereto and thereto, constitutes, or will constitute, as applicable, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity.
5.04 No Conflict . Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 5.05 or on Schedule 5.05 and subject to satisfaction of the Jersey Merger Pre-Conditions, the execution, delivery and performance of this Agreement and each ancillary agreement to this Agreement to which it is a party by the Company and the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in the breach of, the certificate of formation, bylaws or other organizational documents of the Company or its Subsidiaries, (b) conflict with or result in any violation of any provision of any Law, Permit or Governmental Order applicable to the Company or its Subsidiaries, or any of their respective properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any Contract of the type described in Section 5.12(a) , whether or not set forth on Schedule 5.12(a) , to which the Company or its Subsidiaries is a party or by which any of them or any of their respective assets or properties may be bound or affected or (d) result in the creation of any Lien upon any of the properties, equity interests or assets of the Company or its Subsidiaries, except (in the case of clauses (b), (c) or (d) above) for such violations, conflicts, breaches or defaults which, individually or in the aggregate, would not (i) be material to the Company and its Subsidiaries, taken as a whole, or (ii) materially adversely affect the ability of the Company to perform or comply with on a timely basis any material obligation under this Agreement or to consummate the Transactions.
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5.05 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or notice, approval, consent waiver or authorization from any Governmental Authority is required on the part of the Company with respect to the Company’s execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, except for (a) applicable requirements of the HSR Act, (b) any consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company to perform or comply with on a timely basis any material obligation under this Agreement or to consummate the transactions contemplated hereby in accordance with the terms hereof and (c) as otherwise disclosed on Schedule 5.05 .
5.06 Current Capitalization .
(a) As of the date hereof, the authorized share capital of the Company is $20,000 divided into 2,000,000 ordinary shares, 1,645,890.01 of which are issued and outstanding as of the date of this Agreement. Set forth on Schedule 5.06(a) is a true, correct and complete list of each holder of shares or other equity interests of the Company (other than Company Options) and the number of shares or other equity interests held by each such holder as of the date hereof. Except as set forth on Schedule 5.06(a) or pursuant to the Company Stock Plan, as of the date hereof there are no other shares of common stock, preferred stock or other equity interests of the Company authorized, reserved, issued or outstanding.
(b) Except for Company Options granted pursuant to the Company Stock Plan, as of the date hereof there are (i) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for Company Shares or the equity interests of the Company, or any other Contracts to which the Company is a party or by which the Company is bound obligating the Company to issue or sell any shares of capital stock of, other equity interests in or debt securities of, the Company and (ii) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in the Company. As of the date hereof, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any securities or equity interests of the Company. Except as set forth on Schedule 5.06(b) , there are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which the Company’s stockholders may vote. Except for the Company Shareholders Agreement, as of the date hereof the Company is not party to any shareholders agreement, voting agreement or registration rights agreement relating to its equity interests. With respect to each Company Option, Schedule 5.06(b) sets forth, as of the date hereof, the name of the holder of such Company Option, the number of vested and unvested Company Shares covered by such Company Option, the date of grant, the cash exercise price per share of such Company Option and the applicable expiration date.
(c) As of the date hereof, the outstanding shares of capital stock or other equity interests of the Company’s Significant Subsidiaries (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or Contract. As of the date hereof, there are (A) no subscriptions, calls, rights or other securities convertible into or exchangeable or exercisable for the equity interests of the Company’s Significant Subsidiaries (including any convertible preferred equity certificates), or any other Contracts to which any of the Company’s Subsidiaries is a party or by which any of the Company’s Significant Subsidiaries is bound obligating such Significant Subsidiaries to issue or sell any shares of capital stock of, other equity interests in or debt securities of, such Significant Subsidiaries, and (B) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in the Company’s Significant Subsidiaries. As of the date hereof, there are no outstanding contractual obligations of the Company’s Significant Subsidiaries to repurchase, redeem or otherwise acquire any securities or equity interests of the Company’s Significant Subsidiaries. Except as set forth on Schedule 5.06(c) , there are no outstanding bonds, debentures, notes or other indebtedness of the Company’s Subsidiaries having the right to vote (or convertible into, or
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exchangeable for, securities having the right to vote) on any matter for which the such Subsidiaries’ stockholders may vote. Except as forth on Schedule 5.06(c) , the Company’s Subsidiaries are not party to any stockholders agreement, voting agreement or registration rights agreement relating to the equity interests of the Company’s Subsidiaries.
(d) As of the date hereof, the Company is the direct or indirect owner of, and has good and marketable direct or indirect title to, all the issued and outstanding shares of capital stock or equity interests of its Significant Subsidiaries free and clear of any Liens other than Permitted Liens. There are no options or warrants convertible into or exchangeable or exercisable for the equity interests of the Company’s Significant Subsidiaries.
5.07 Financial Statements . Attached as Schedule 5.07 are (a) the audited consolidated balance sheets of the Company and its Subsidiaries (including the Company) as of December 31, 2016 and as of December 31, 2017 and the audited consolidated or combined income (loss) statements, statements of comprehensive income (loss), changes in equity and cash flows of the Company and its Subsidiaries (including the Company) for the same period, together with the auditor’s reports thereon (the “ Audited Financial Statements ”) and (b) the unaudited condensed consolidated balance sheets of the Company and its Subsidiaries (including the Company) as of September 30, 2018 and the unaudited condensed consolidated statements of operations, statements of comprehensive income (loss), cash flows and changes in equity of the Company and its Subsidiaries (including the Company) as of September 30, 2018 (the “ Unaudited Financial Statements ” and, together with the Audited Financial Statements, the “ Financial Statements ”). The Financial Statements present fairly, in all material respects, the consolidated financial position, results of operations, income (loss), changes in equity and cash flows of the Company and its Subsidiaries as of the dates and for the periods indicated in such Financial Statements in conformity with GAAP (except, in the case of the Unaudited Financial Statements, for the absence of footnotes and other presentation items, in each case the impact of which is not material) and were derived from, and accurately reflect in all material respects, the books and records of the Company and its Subsidiaries.
5.08 Undisclosed Liabilities . There is no material liability, debt or obligation against the Company or its Subsidiaries that would be required to be set forth or reserved for on a balance sheet of the Company and its Subsidiaries (and the notes thereto) prepared in accordance with GAAP consistently applied and in accordance with past practice, except for liabilities and obligations (a) reflected or reserved for on the Financial Statements or disclosed in the notes thereto, (b) that have arisen since the date of the most recent balance sheet included in the Unaudited Financial Statements in the ordinary course of the operation of business of the Company and its Subsidiaries, (c) disclosed in the Schedules or (d) arising under this Agreement and/or the performance by the Company of its obligations hereunder.
5.09 Litigation and Proceedings . There are no pending or, to the knowledge of the Company, threatened, Actions and, to the knowledge of the Company, there are no pending or threatened investigations, in each case, against the Company or its Subsidiaries, or otherwise affecting the Company or its Subsidiaries or their assets, including any condemnation or similar proceedings, that, individually or in the aggregate, would be material to the Company and its Subsidiaries, taken as a whole. Neither the Company nor its Subsidiaries or any property, asset or business of the Company or its Subsidiaries is subject to any Governmental Order, or, to the knowledge of the Company, any continuing investigation by, any Governmental Authority, in each case that, individually or in the aggregate, would be material to the Company and its Subsidiaries, taken as a whole. There is no unsatisfied judgment or any open injunction binding upon the Company or its Subsidiaries which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company or its Subsidiaries to enter into and perform its obligations under this Agreement.
5.10 Compliance with Laws .
(a) Except (i) compliance with Environmental Laws (as to which certain representations and warranties are made pursuant to Section 5.19 ), (ii) compliance with Tax Laws (as to which certain representations and warranties are made pursuant to Section 5.13 and Section 5.15 ), and (iii) where the failure to be, or to have been, in compliance with such Laws would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries are, and since October 3, 2016 have been, in compliance in all material respects with all
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applicable Laws. Neither of the Company nor its Subsidiaries has received any written notice from any Governmental Authority of a violation of any applicable Law by the Company or its Subsidiaries at any time since October 3, 2016, which violation would be material to the Company and its Subsidiaries, taken as a whole.
(b) Since October 3, 2016, and except where the failure to be, or to have been, in compliance with such Laws would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, (i) there has been no action taken by the Company, its Subsidiaries, or, to the knowledge of the Company, any officer, director, manager, employee, agent, representative or sales intermediary of the Company or its Subsidiaries, in each case, acting on behalf of the Company or its Subsidiaries, in violation of any applicable Anti-Corruption Law, (ii) neither the Company nor its Subsidiaries has been convicted of violating any Anti-Corruption Laws or subjected to any investigation by a Governmental Authority for violation of any applicable Anti-Corruption Laws, (iii) neither the Company nor its Subsidiaries has conducted or initiated any internal investigation or made a voluntary, directed, or involuntary disclosure to any Governmental Authority regarding any alleged act or omission arising under or relating to any noncompliance with any Anti-Corruption Law and (iv) neither the Company nor its Subsidiaries has received any written notice or citation from a Governmental Authority for any actual or potential noncompliance with any applicable Anti-Corruption Law.
5.11 Intellectual Property .
(a) Schedule 5.11(a) sets forth, as of the date hereof, a true and complete list, including owner, jurisdiction (except for unexpired registered copyrights and domain name registrations), and serial and application numbers (except for unexpired patents, copyrights and domain name registrations), of all unexpired patents, all unexpired registered copyrights, all unexpired registered trademarks, all unexpired domain names registrations and all pending registration applications for any of the foregoing, in each case, that are owned by the Company or a Subsidiary (the “Registered Intellectual Property”). Except (i) as set forth in Schedule 5.11(a) or (ii) as provided in any Contract set forth in Schedule 5.12 , a Subsidiary of the Company is the sole and exclusive owner of all Registered Intellectual Property set forth in Schedule 5.11(a) , free and clear of all Liens, other than Permitted Liens.
(b) Except (i) as set forth in Schedule 5.11(b) or (ii) as would not reasonably be expected to be material to the Company’s business, as of the date hereof, no Proceedings are pending or, to the Company’s knowledge, threatened in writing (including unsolicited offers to license patents), as of the date of this Agreement, against the Company or any Subsidiary by any third party claiming infringement, misappropriation or other violation in the conduct of the Company’s business of Intellectual Property owned by such third party. Except (x) as set forth in Schedule 5.11(b) or (y) that would not reasonably be expected to be material to the Company’s business, neither the Company nor any Subsidiary is a party to any pending Proceedings, as of the date of this Agreement, claiming infringement, misappropriation or other violation by any third party of its Intellectual Property. Except as set forth in Schedule 5.11(b) , within the two (2) years preceding the date of this Agreement, to knowledge of the Company, the conduct of the Company’s business has not infringed, misappropriated or otherwise violated the Intellectual Property of any third party, except for such infringements, misappropriations, dilutions and other violations that would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. To the knowledge of the Company, no third party is infringing, misappropriating or otherwise violating any Intellectual Property of the Company or any Subsidiary except for such infringements, misappropriations, dilutions, and other violations that would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. To the knowledge of the Company, the Subsidiaries and/or the Company, as the case may be, either own(s), has a valid license to use or otherwise has the lawful right to use, all of the Intellectual Property and Software used in the conduct of its business as currently conducted, except for such Intellectual Property and Software with respect to which the lack of such ownership, license or right to use would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
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(c) The Company and the Subsidiaries have undertaken commercially reasonable efforts to protect the confidentiality of any trade secrets included in their Intellectual Property that are material to their business.
(d) To the knowledge of the Company, there have been no material unauthorized intrusions or breaches of the security of the information technology systems currently used to provide material products to customers in the conduct of their business as it is currently conducted (the “ IT Systems ”) during the two-year period preceding the date hereof. The Company and the Subsidiaries have in place disaster recovery plans and procedures for the IT Systems that the Company reasonably considers to be adequate. To the knowledge of the Company, there have been no material unauthorized intrusions or breaches of the security of the IT Systems in the two-year period preceding the date hereof that, pursuant to any legal requirement, would require the Company or a Subsidiary to notify customers or employees of such breach or intrusion or that was or would reasonably be expected to be material to their business.
(e) The Subsidiaries’ and the Company’s collection, use, disclosure, storage and dissemination of personal information in connection with their business complies with, and does not violate, and for the two (2) years prior to the date of this Agreement has complied with and has not violated, (i) any Contract to which any of them is a party, (ii) any of their published privacy policies or (iii) all applicable Laws concerning the privacy and/or security of personal information and all applicable mandatory standards in the industries in which the business of the Company and the Subsidiaries operates that concern privacy, data protection, confidentiality or information security, other than any violation that, individually or in the aggregate, has not been and would not reasonably be expected to be material to the Company and its subsidiaries, taken as a whole.
5.12 Contracts; No Defaults .
(a) Schedule 5.12(a) contains a listing of all Contracts (other than purchase orders) described in clauses (i) through (x) below to which, as of the date of this Agreement, the Company or one or more of its Subsidiaries is a party or by which any of their respective assets are bound. True, correct and complete copies of the Contracts listed on Schedule 5.12(a) have been delivered to or made available to Acquiror or its agents or representatives.
(i) any Contract with an employee or independent contractor of the Company or its Subsidiaries who resides primarily in the United States which, upon the consummation of the Transactions, will (either alone or upon the occurrence of any additional acts or events) result in any payment or benefits (whether of severance pay or otherwise) becoming due, or the acceleration or vesting of any rights to any payment or benefits, from the Company or its Subsidiaries;
(ii) each employment, severance, retention, change in control or other Contract (excluding customary form offer letters entered into in the ordinary course of business) with any employee or other individual service provider of the Company or its Subsidiaries that provides for annual base cash compensation in excess of  $300,000;
(iii) each employee collective bargaining Contract;
(iv) any Contract pursuant to which the Company or its Subsidiaries licenses from a third party Intellectual Property that is material to the business of the Company and its Subsidiaries, taken as a whole, other than click-wrap, shrink-wrap and off-the-shelf software licenses, and any other software licenses that are commercially available on reasonable terms to the public generally with license, maintenance, support and other fees less than $250,000 per year;
(v) any Contract which restricts in any material respect or contains any material limitations on the ability of the Company or its Subsidiaries to compete in any line of business or in any geographic territory;
(vi) any Contract under which the Company or its Subsidiaries has (A) created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) Indebtedness, (B) granted a Lien on its assets, whether tangible or intangible, to secure any Indebtedness, or (C) extended credit to any Person (other than (1) intercompany loans and advances and (2) customer payment
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terms in the ordinary course of business), in each case of clauses (A), (B) and (C), in an amount in excess of  $4,000,000 of committed credit;
(vii) the principal transaction Contract entered into in connection with a completed acquisition or disposition by the Company or its Subsidiaries since October 3, 2016 involving consideration in excess of  $2,500,000 of any Person or other business organization, division or business of any Person (including through merger or consolidation or the purchase of a controlling equity interest in or substantially all of the assets of such Person or by any other manner);
(viii) any Contract with outstanding obligations for the sale or purchase of personal property, fixed assets or real estate having a value individually, with respect to all sales or purchases thereunder, in excess of  $500,000 or, together with all related Contracts, in excess of  $1,000,000, in each case, other than sales or purchases in the ordinary course of business consistent with past practices and sales of obsolete equipment;
(ix) any Contract not made in the ordinary course of business and not disclosed pursuant to any other clause under this Section 5.12 and expected to result in revenue or require expenditures in excess of  $4,000,000 in the calendar year ended December 31, 2018 or any subsequent calendar year;
(x) other than the Company Shareholders Agreement or any employment agreement set forth on Schedule 5.13(a) , any Contract between the Company or its Subsidiaries on the one hand, and any of Company’s shareholders, on the other hand, that will not be terminated at or prior to the Closing; and
(xi) any Contract establishing any joint venture, partnership, strategic alliance or other collaboration that is material to the business of the Company and its Subsidiaries taken as a whole.
(b) Except for any Contract that has terminated or will terminate upon the expiration of the stated term thereof prior to the Closing Date, with respect to any Contract of the type described in Section 5.12(a) , whether or not set forth on Schedule 5.12(a) , (i) such Contracts are in full force and effect and represent the legal, valid and binding obligations of the Company or its Subsidiaries party thereto and, to the knowledge of the Company, represent the legal, valid and binding obligations of the other parties thereto, and, to the knowledge of the Company, are enforceable by the Company or its Subsidiaries to the extent a party thereto in accordance with their terms, subject in all respects to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law), (ii) none of the Company, its Subsidiaries or, to the knowledge of the Company, any other party thereto is in material breach of or material default (or would be in material breach, violation or default but for the existence of a cure period) under any such Contract, (iii) since December 31, 2017, neither the Company nor its Subsidiaries has received any written, or to the knowledge of the Company, oral claim or notice of material breach of or material default under any such Contract, (iv) to the knowledge of the Company, no event has occurred which individually or together with other events, would reasonably be expected to result in a material breach of or a material default under any such Contract by the Company or its Subsidiaries or, to the knowledge of the Company, any other party thereto (in each case, with or without notice or lapse of time or both), and (v) since December 31, 2017 through the date hereof, neither the Company nor its Subsidiaries has received written notice from any other party to any such Contract that such party intends to terminate or not renew any such Contract.
5.13 Company Benefit Plans .
(a) Schedule 5.13(a) sets forth a complete list of each material Company Benefit Plan, other than any Company Benefit Plan that is maintained outside of the United States or pursuant to Laws outside of the United States or in which employees or service providers of the Company or any of its Subsidiaries who reside primarily outside of the United States participate. “ Company Benefit Plan ” means any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income
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Security Act of 1974, as amended (“ ERISA ”), and any other material, written plan, policy, program, arrangement or agreement (other than standard employment agreements that can be terminated at any time without severance or termination pay and upon notice of not more than 60 days or such longer period as may be required by applicable law) providing compensation or benefits to any current or former director, officer, employee, independent contractor or other service provider, in each case that is maintained, sponsored or contributed to by the Company or its Subsidiaries or under which the Company or its Subsidiaries has or could reasonably be expected to have any obligation or liability, including, without limitation, all incentive, bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock-based compensation plans, policies, programs, practices or arrangements, but not including any plan, policy, program, arrangement or agreement that covers only former directors, officers, employees, independent contractors and service providers and with respect to which the Company and its Subsidiaries have no remaining obligations or liabilities. For the avoidance of doubt, “ Company Benefit Plan ” includes plans maintained outside of the United States.
(b) With respect to each Company Benefit Plan maintained in the United States and each other Company Benefit Plan that is material to the Company and its Subsidiaries taken as a whole, the Company has delivered or made available to Acquiror correct and complete copies of, if applicable (i) the current plan document and any trust agreement, (ii) the most recent summary plan description, (iii) the most recent annual report on Form 5500 filed with the Internal Revenue Service (or, with respect to non-U.S. plans, any comparable annual or periodic report), (iv) the most recent actuarial valuation, (v) the most recent determination or opinion letter issued by the Internal Revenue Service (or applicable comparable Governmental Authority), and (vi) all non-routine filings made with any Governmental Authorities since October 3, 2016.
(c) Except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, each Company Benefit Plan has been administered in material compliance with its terms and all applicable Laws, including ERISA and the Code and all contributions required to be made under the terms of any Company Benefit Plan as of the date this representation is made have been timely made or, if not yet due, have been properly reflected in the Company’s financial statements.
(d) Each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code (i) has received a favorable determination or opinion letter as to its qualification, (ii) has been established under a standardized master and prototype or volume submitter plan for which a current favorable Internal Revenue Service advisory letter or opinion letter has been obtained by the plan sponsor and is valid as to the adopting employer, or (iii) has time remaining under applicable Laws to apply for a determination or opinion letter or to make any amendments necessary to obtain a favorable determination or opinion letter. To the knowledge of the Company, no event has occurred that would reasonably be expected to result in the loss of the tax-qualified status of such plans. Each Company Benefit Plan maintained outside of the United States that is intended to be qualified or registered under applicable Law has been so qualified or registered and, to the knowledge of the Company, no event has occurred that would reasonably be expected to result in the loss of such qualification or registration.
(e) Neither the Company nor any of its Subsidiaries sponsored or was required to contribute to, at any point during the six year period prior to the date hereof, a multiemployer pension plan (as defined in Section 3(37) of ERISA) (a “ Multiemployer Plan ”) or other pension plan, in each case, that is subject to Title IV of ERISA. No circumstance or condition exists that would reasonably be expected to result in an actual obligation of the Company or any of its Subsidiaries to pay money on account of any Multiemployer Plan or other pension plan that is subject to Title IV of ERISA and that is maintained by an ERISA Affiliate of the Company. For purposes of this Agreement, “ ERISA Affiliate ” means any entity (whether or not incorporated) other than the Company or a Subsidiary of the Company that, together with the Company, is considered under common control and treated as one employer under Section 414(b), (c), (m) or (o) of the Code.
(f) Except as would not be reasonably expected to result in material liability to the Company and its Subsidiaries, taken as a whole, (i) no event has occurred and no condition exists that would subject
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the Company or any of its Subsidiaries to any tax, fine, lien, or penalty imposed by ERISA or the Code with respect to any Company Benefit Plan and (ii) no nonexempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code or Section 502 of ERISA) has occurred with respect to any Company Benefit Plan.
(g) Except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, with respect to the Company Benefit Plans, no administrative investigation, audit or other administrative proceeding by the Department of Labor, the Internal Revenue Services or other Governmental Authorities are pending, or, to the knowledge of the Company, threatened.
(h) Neither the execution and delivery of this Agreement by the Company nor the consummation of the transactions contemplated by this Agreement (either alone or in combination with another event) will result in the acceleration, vesting or creation of any rights of any director, officer or employee of the Company or its Subsidiaries to payments or benefits or increases in any existing payments or benefits or any loan forgiveness, in each case, from the Company or any of its Subsidiaries.
(i) No amount or benefit that could be, or has been, received (whether in cash or property or the vesting of property or the cancellation of indebtedness) by any current or former employee, officer or director of the Company or any Subsidiary of the Company who is a “disqualified individual” within the meaning of Section 280G of the Code could reasonably be expected to be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) as a result of the consummation of the transactions contemplated by this Agreement.
(j) Each Company Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A(d)(1) of the Code has been operated in all material respects in good faith compliance with Section 409A of the Code since January 1, 2005 or its inception (whichever is later), and all applicable regulations and notices issued thereunder. No Company Benefit Plan or award thereunder provides to any “service provider” (within the meaning of Section 409A of the Code) of the Company or its Subsidiaries any compensation or benefits which has subjected or could reasonably be expected in the future to subject such service provider to gross income inclusion or additional Tax pursuant to Section 409A(a)(1) of the Code.
(k) No Company Benefit Plan provides for the gross-up of any Taxes imposed by Section 4999 or 409A of the Code.
5.14 Labor Matters .
(a) Except as set forth on Schedule 5.14(a) , (i) neither the Company nor its Subsidiaries is a party to or bound by any labor agreement, collective bargaining agreement, or any other labor-related agreements or arrangements with any labor union, labor organization or works council and no such agreements or arrangements are currently being negotiated by the Company or its Subsidiaries, (ii) no labor union or organization, works council or group of employees of the Company or its Subsidiaries has made a pending demand for recognition or certification, and (iii) there are no representation or certification proceedings or petitions seeking a representation proceeding pending or, to the knowledge of the Company, threatened to be brought or filed with the National Labor Relations Board or any other applicable labor relations authority.
(b) Except as would not be material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, each of the Company and its Subsidiaries (i) is in compliance with all applicable Laws regarding employment and employment practices, including, without limitation, all laws respecting terms and conditions of employment, health and safety, employee classification, non-discrimination, wages and hours, immigration, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, employee leave issues, the proper classification of employees and independent contractors, the proper classification of exempt and non-exempt employees, and unemployment insurance, (ii) has not committed any unfair labor practice as defined by the National Labor Relations Board or received written notice of any unfair labor practice complaint against it pending before the National Labor Relations Board that
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remains unresolved, and (iii) since October 3, 2016, has not experienced any actual or, to the knowledge of the Company, threatened arbitrations, grievances, labor disputes, strikes, lockouts, picketing, hand billing, slow-downs or work stoppages against or affecting the Company or its Subsidiaries.
(c) Except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries are not delinquent in payments to any employees or former employees for any services or amounts required to be reimbursed or otherwise paid.
(d) To the knowledge of the Company, no employee of the Company or its Subsidiaries is in any material respect in violation of any term of any employment agreement, nondisclosure agreement, non-competition agreement, restrictive covenant or other obligation: (i) to the Company or its Subsidiaries or (ii) to a former employer of any such employee relating (A) to the right of any such employee to be employed by the Company or its Subsidiaries or (B) to the knowledge or use of trade secrets or proprietary information.
(e) As of the date hereof, the Company has no knowledge that any current direct report to the CEO of the Company or its Subsidiaries presently intends to terminate his or her employment.
5.15 Taxes .
(a) All material Tax Returns required by Law to be filed by the Company or its Subsidiaries have been filed, and all such Tax Returns are true, correct and complete in all material respects.
(b) All material amounts of Taxes due and owing by the Company and its Subsidiaries have been paid, and since the date of the most recent balance sheet included in the Unaudited Financial Statements neither the Company nor any of its Subsidiaries have incurred any material Tax liability outside the ordinary course of business.
(c) Each of the Company and its Subsidiaries has (i) withheld all material amounts required to have been withheld by it in connection with amounts paid or owed to any employee, independent contractor, creditor, shareholder or any other third party, (ii) remitted, or will remit on a timely basis, such amounts to the appropriate Governmental Authority; and (iii) complied in all material respects with applicable Law with respect to Tax withholding.
(d) Neither the Company nor its Subsidiaries is engaged in any material audit or other administrative proceeding with a taxing authority or any judicial proceeding with respect to Taxes. Neither the Company nor its Subsidiaries has received any written notice from a taxing authority of a dispute or claim with respect to a material amount of Taxes, other than disputes or claims that have since been resolved, and to the knowledge of the Company, no such claims have been threatened. No written claim has been made and to the knowledge of the Company, no oral claim has been made, since October 3, 2016, by any Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries does not file a Tax Return that such entity is or may be subject to Taxes by that jurisdiction in respect of Taxes that would be the subject of such Tax Return. There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, material Taxes of the Company or its Subsidiaries and no written request for any such waiver or extension is currently pending. No issues relating to Taxes of the Company or its Subsidiaries were raised in any completed audit that would reasonably be expected to result in a material amount of Taxes in a later taxable period.
(e) Neither the Company nor its Subsidiaries (or any predecessor thereof) has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (or so much of Section 356 of the Code as relates to Section 355 of the Code) in the prior two years.
(f) Neither the Company nor its Subsidiaries has been a party to any “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
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(g) Except with respect to deferred revenue or prepaid subscription revenues collected by the Company and its Subsidiaries in the ordinary course of business, neither the Company nor its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (A) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date and made prior to the Closing; (B) any written agreement with a Governmental Authority executed on or prior to the Closing; (C) installment sale or open transaction disposition made on or prior to the Closing; (D) prepaid amount received on or prior to the Closing; (E) any election under Section 108(i) of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law); or (F) to the knowledge of the Company, intercompany transaction or excess loss accounts described in the Treasury Regulations promulgated under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) that existed prior to the Closing.
(h) There are no Liens with respect to Taxes on any of the assets of the Company or its Subsidiaries, other than Liens for Taxes not yet due and payable.
(i) Neither the Company nor its Subsidiaries has any liability for the Taxes of any Person (other than the Company or its Subsidiaries) (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), (ii) as a transferee or successor or (iii) by contract or otherwise (except, in each case, for liabilities pursuant to commercial contracts not primarily relating to Taxes).
(j) Neither the Company nor any of its Subsidiaries is a party to, or bound by, or has any obligation to any Governmental Authority or other Person under any Tax allocation, Tax sharing, Tax indemnification or similar agreements (except, in each case, for any such agreements that are commercial contracts not primarily relating to Taxes).
(k) Neither the Company nor any of its Subsidiaries has made an entity classification election pursuant to Treasury Regulation Section 301.7701-3 to be classified as other than such entity’s default classification pursuant to Treasury Regulation Section 301.7701-3(b) for U.S. federal income tax purposes.
(l) Neither the Company nor any of its Subsidiaries has taken or agreed to take any action not contemplated by this Agreement and/or any related ancillary documents that could reasonably be expected to prevent the Delaware Merger and the Jersey Merger from qualifying for the Intended Tax Treatment.
(m) Each Subsidiary of the Company is not and has never been a United States real property holding corporation within the meaning of Section 897(c)(2).
(n) Each of the Company and its Subsidiaries is in compliance with applicable United States and foreign transfer pricing laws and regulations in all material respects, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practices and methodology of each of the Company and its Subsidiaries.
(o) To the knowledge of the Company, there is no plan or intention to dissolve the Company or Acquiror for corporate law purposes, or to make an entity classification election for U.S. federal income tax purposes to treat the Company or Acquiror as a disregarded entity, following the Transactions.
5.16 Brokers’ Fees . Except as described on Schedule 8.01 , no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by the Company, its Subsidiaries or any of their Affiliates for which the Company or any of its Subsidiaries has any obligation.
5.17 Insurance . Schedule 5.17 contains a list of all material policies or programs of self-insurance of property, fire and casualty, product liability, workers’ compensation, and other forms of insurance held by, or for the benefit of, the Company or its Subsidiaries as of the date of this Agreement. True, correct and complete copies or comprehensive summaries of such insurance policies have been made available to Acquiror. With respect to each such insurance policy required to be listed on Schedule 5.17 , except as would
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not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole: (i) all premiums due have been paid, (ii) the policy is legal, valid, binding and enforceable in accordance with its terms and, except for policies that have expired under their terms in the ordinary course, is in full force and effect, (iii) neither the Company nor its Subsidiaries is in breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and, to the Company’s knowledge, no event has occurred which, with notice or the lapse of time or both, would constitute such a breach or default, or permit termination or modification, under the policy, and to the knowledge of the Company, no such action has been threatened, (iv) as of the date hereof, no written notice of cancellation, non-renewal, disallowance or reduction in coverage or claim or termination has been received other than in connection with ordinary renewals.
5.18 Real Property; Assets .
(a) Neither the Company nor any other Subsidiary of the Company owns any real property. Neither the Company nor any of its Subsidiaries is a party to any agreement or option to purchase any real property or interest therein.
(b) Schedule 5.18(b) contains a true, correct and complete list of all Leased Real Property. The Company has made available to Acquiror true, correct and complete copies of the material leases, subleases and occupancy agreements (including all modifications, amendments, supplements, waivers and side letters thereto) for the Leased Real Property to which the Company or its Subsidiaries is a party (the “ Real Estate Lease Documents ”), and such deliverables comprise all Real Estate Lease Documents relating to the Leased Real Property.
(c) Each Real Estate Lease Document (i) is a legal, valid, binding and enforceable obligation of the Company or its Subsidiaries, as applicable, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity, and each such lease is in full force and effect, (ii) has not been amended or modified except as reflected in the modifications, amendments, supplements, waivers and side letters thereto made available to Acquiror and (iii) except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries, taken as a whole, covers the entire estate it purports to cover, and, subject to securing the consents or approvals, if any, required under the Real Estate Lease Documents to be obtained from any landlord, or lender to landlord (as applicable), in connection with the execution and delivery of this Agreement by the Company or the consummation of the transaction contemplated hereby by the Company, upon the consummation of the transactions contemplated by this Agreement, will entitle Holdings or its Subsidiaries to the exclusive use (subject to the terms of the respective Real Estate Lease Documents in effect with respect to the Leased Real Property), occupancy and possession of the premises specified in the Real Estate Lease Documents for the purpose specified in the Real Estate Lease Documents.
(d) No material default by (i) the Company or its Subsidiaries or (ii) to the knowledge of the Company, any landlord or sub-landlord, as applicable, presently exists under any Real Estate Lease Documents. Neither the Company nor its Subsidiaries has received written or, to the knowledge of the Company, oral notice of material default under any Real Estate Lease Document which default has not been cured. To the knowledge of the Company, no event has occurred that, and no condition exists which, with notice or lapse of time or both, would constitute a material default under any Real Estate Lease Document by the Company or its Subsidiaries (as tenant, subtenant or sub-subtenant, as applicable) or by the other parties thereto. Neither the Company nor its Subsidiaries has subleased or otherwise granted any Person the right to use or occupy any Leased Real Property which is still in effect. Neither the Company nor its Subsidiaries has collaterally assigned or granted any other security interest in the Real Property or any interest therein which is still in effect. Except for the Permitted Liens, there exist no Liens affecting the Real Property created by, through or under the Company or its Subsidiaries.
(e) With respect to each Real Estate Lease Document:
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(i) since October 3, 2016 to the knowledge of the Company, no security deposit or portion thereof deposited under such Real Estate Lease Document has been applied in respect of a breach or default under such Real Estate Lease Document which has not (A) if and as required by the applicable landlord, been redeposited in full or (B) been disclosed to Acquiror in writing; and
(ii) neither the Company nor its Subsidiaries holds a contractual right or obligation to purchase or acquire any material real estate interest.
(f) Neither the Company nor its Subsidiaries has received any written notice that remains outstanding as of the date of this Agreement that the current use and occupancy of the Real Property and the improvements thereon (i) are prohibited by any Lien or law or (ii) are in material violation of any of the recorded covenants, conditions, restrictions, reservations, easements or agreements applicable to such Real Property.
(g) Except for Permitted Liens and licenses of Intellectual Property and Software, the Company and its Subsidiaries have good and valid title to the assets of the Company and its Subsidiaries.
5.19 Environmental Matters . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:
(a) the Company and its Subsidiaries are and, during the last three years, have been in compliance with all Environmental Laws;
(b) there has been no release of any Hazardous Materials by the Company or its Subsidiaries at, in, on or under any Leased Real Property or in connection with the Company’s or its Subsidiaries’ operations off-site of the Leased Real Property or, to the knowledge of the Company, at, in, on or under any formerly owned or leased real property during the time that the Company owned or leased such property;
(c) neither the Company nor its Subsidiaries is subject to any current Governmental Order relating to any non-compliance with Environmental Laws by the Company or its Subsidiaries or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Materials; and
(d) no Action is pending or, to the knowledge of the Company, threatened and, to the knowledge of the Company, no investigation is pending or threatened with respect to the Company’s or its Subsidiaries’ compliance with or liability under Environmental Law.
5.20 Absence of Changes .
(a) From the date of the most recent balance sheet included in the Unaudited Financial Statements, there has not been any change, development, condition, occurrence, event or effect relating to the Company or its Subsidiaries that, individually or in the aggregate, resulted in, or would reasonably be expected to result in, a Material Adverse Effect.
(b) From September 30, 2018 through the date of this Agreement, the Company and its Subsidiaries (i) have, in all material respects, conducted their business and operated their properties in the ordinary course of business consistent with past practices and (ii) have not taken any action that (A) would require the consent of the Acquiror pursuant to Section 8.01 if such action had been taken after the date hereof and (B) is material to the Company and its Subsidiaries, taken as a whole.
5.21 Affiliate Agreements . Other than any Company Benefit Plan (including any employment or option agreements entered into in the ordinary course of business by the Company or its Subsidiaries), none of the Affiliates, officers or directors of the Company or its Subsidiaries is a party to any Contract or business arrangement with the Company or its Subsidiaries (each such Contract or business arrangement, an “ Affiliate Agreement ”).
5.22 Internal Controls . The Company maintains a system of internal accounting controls designed to provide reasonable assurance that: (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial
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statements in conformity with GAAP and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
5.23 Permits . Each of the Company and its Subsidiaries has all material Permits (the “ Material Permits ”) that are required to own, lease or operate its properties and assets and to conduct its business as currently conducted, except where the failure to obtain the same would not, individually or in the aggregate, reasonably be expected to be material to (i) such ownership, lease, operation or conduct or (ii) the Company and its Subsidiaries, taken as a whole. Except as would not, individually or in the aggregate, be expected to be material to the Company and its Subsidiaries, taken as a whole, (a) each Material Permit is in full force and effect in accordance with its terms, (b) no outstanding written notice of revocation, cancellation or termination of any Material Permit has been received by the Company or its Subsidiaries, (c) to the knowledge of the Company, none of such Permits upon its termination or expiration in the ordinary due course will not be renewed or reissued in the ordinary course of business upon terms and conditions substantially similar to its existing terms and conditions, (d) there are no Actions pending or, to the knowledge of the Company, threatened, that seek the revocation, cancellation, limitation, restriction or termination of any Material Permit, and (e) each of the Company and its Subsidiaries is in compliance with all Material Permits applicable to the Company or its Subsidiaries.
5.24 Proxy Statement/Prospectus . None of the information relating to the Company or its Subsidiaries supplied by the Company, or by any other Person acting on behalf of the Company, in writing specifically for inclusion in the Proxy Statement/Prospectus will, as of the date the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first mailed to Acquiror’s stockholders, at the time of the Special Meeting or at the Delaware Merger Effective Time, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
5.25 No Additional Representations and Warranties . Except as provided in this Article V and Article VI , neither the Company nor any of its Affiliates, nor any of their respective directors, officers, employees, stockholders, partners, members or representatives has made, or is making, any representation or warranty whatsoever to Acquiror or its Affiliates and no such party shall be liable in respect of the accuracy or completeness of any information provided to Acquiror or its Affiliates.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF Holdings, JERSEY MERGER SUB AND DELAWARE MERGER SUB
Except as set forth in the Schedules to this Agreement (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent), each of Holdings, Jersey Merger Sub and Delaware Merger Sub represents and warrants to Acquiror as follows:
6.01 Organization and Entity Power . Holdings is a public limited company duly organized, validly existing and in good standing under the Laws of the Island of Jersey, with full power and authority to enter into this Agreement and perform its obligations hereunder. Jersey Merger Sub is a private limited company duly organized, validly existing and in good standing under the Laws of the Island of Jersey, with full power and authority to enter into this Agreement and perform its obligations hereunder. Delaware Merger Sub is a corporation duly organized, validly existing and in good standing under the Laws of Delaware, with full corporate power and authority to enter into this Agreement and perform its obligations hereunder.
6.02 Due Authorization . Each of Holdings, Jersey Merger Sub and Delaware Merger Sub has all requisite entity power and authority to execute and deliver this Agreement and each ancillary agreement to this Agreement to which it is a party and (in the case of Jersey Merger Sub, subject to the Jersey Merger Pre-Conditions and subject to the approvals described in Section 6.04 ) to perform its respective obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and such ancillary agreements by each of Holdings,
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Jersey Merger Sub and Delaware Merger Sub and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite action, and no other company proceedings on the part of Holdings, Jersey Merger Sub and Delaware Merger Sub (other than (a) the adoption of this Agreement by Holdings in its capacity as the sole stockholder of Delaware Merger Sub, which adoptions will occur immediately following execution of this Agreement and (b) in the case of Jersey Merger Sub, the satisfaction of the Jersey Merger Pre-Conditions) is necessary to authorize the execution, delivery or performance of this Agreement or such ancillary agreements (subject to the satisfaction of the Jersey Merger Pre-Conditions). Assuming that this Agreement is, and each such ancillary agreement will be, a valid and binding obligation of the other parties hereto and thereto, this Agreement constitutes, and each such ancillary agreement will constitute, a valid and binding obligation of each of Holdings, Jersey Merger Sub and Delaware Merger Sub, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
6.03 No Violation . Subject to the satisfaction of the Jersey Merger Pre-Conditions, the execution, delivery and performance of this Agreement by each of Holdings, Jersey Merger Sub and Delaware Merger Sub and the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in the breach of Holdings’, Jersey Merger Sub’s and Delaware Merger Sub’s respective Organizational Documents, (b) conflict with or result in any violation of any provision of any Law or Governmental Order applicable to Holdings, Jersey Merger Sub or Delaware Merger Sub, or any of their respective properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any Contract to which Holdings, Jersey Merger Sub or Delaware Merger Sub is a party or by which any of Holdings’, Jersey Merger Sub’s or Delaware Merger Sub’s respective assets or properties may be bound or affected, or (d) result in the creation of any Lien upon any of the properties or assets of Holdings, Jersey Merger Sub or Delaware Merger Sub, except (in the case of clauses (b), (c) or (d) above) for such violations, conflicts, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Holdings, Jersey Merger Sub or Delaware Merger Sub to enter into and perform its respective obligations under this Agreement.
6.04 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or notice, approval, consent waiver or authorization from any Governmental Authority is required on the part of Holdings, Jersey Merger Sub or Delaware Merger Sub with respect to the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, except for (a) applicable requirements of the HSR Act, (b) any consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Holdings, Jersey Merger Sub or Delaware Merger Sub to perform or comply with on a timely basis any material obligation under this Agreement or to consummate the transactions contemplated hereby in accordance with the terms hereof and (c) as otherwise disclosed on Schedule 6.04 .
6.05 Litigation and Proceedings . There are no pending or, to the knowledge of the Company, threatened, Actions and, to the knowledge of the Company, there are no pending or threatened investigations, in each case, against Holdings, Jersey Merger Sub or Delaware Merger Sub, or otherwise affecting Holdings, Jersey Merger Sub or Delaware Merger Sub, that (x) could reasonably be expected to adversely affect the ability of Holdings, Jersey Merger Sub or Delaware Merger Sub to consummate the transactions contemplated by this Agreement or (y) challenge or that could reasonably be expected to prevent, impede, hinder, delay, make illegal, impose limitations or conditions on, or otherwise interfere with, any of the transactions contemplated by this Agreement. None of Holdings, Jersey Merger Sub or Delaware Merger Sub is subject to any Action that relates to the business of, or any assets owned or used by, the Company or any of its Subsidiaries.
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6.06 Capitalization .
(a) As of the date hereof, the authorized share capital of Holdings consists of an unlimited number of Holdings Shares, of which one (1) Holdings Share is issued and outstanding and beneficially held by Onex Partners IV LP and one (1) Holdings Share is issued and outstanding and beneficially held by Onex Partners IV GP, in each case, as of the date of this Agreement. All of such issued and outstanding shares (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law, and (iii) were not issued in breach or violation of any preemptive rights or Contract. Except for this Agreement and the transactions contemplated hereby, as of the date hereof, there are (A) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of the common stock or the equity interests of Holdings, or any other Contracts to which Holdings is a party or by which Holdings is bound obligating Holdings to issue or sell any shares of capital stock of, other equity interests in or debt securities of, Holdings, and (B) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in Holdings. There are no outstanding contractual obligations of Holdings to repurchase, redeem or otherwise acquire any securities or equity interests of Holdings. There are no outstanding bonds, debentures, notes or other indebtedness of Holdings having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which Holdings’ stockholders may vote. Except for this Agreement and the Transactions, Holdings is not a party to any stockholders agreement, voting agreement or registration rights agreement relating to the common stock or any other equity interests of Holdings.
(b) As of the date hereof, the authorized share capital of Jersey Merger Sub consists of an unlimited number of shares, of which one (1) share is issued and outstanding and beneficially held by Holdings as of the date of this Agreement. All of such issued and outstanding shares (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law, and (iii) were not issued in breach or violation of any preemptive rights or Contract. Except for this Agreement and the transactions contemplated hereby, as of the date hereof, there are (A) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of the common stock or the equity interests of Jersey Merger Sub, or any other Contracts to which Jersey Merger Sub is a party or by which Jersey Merger Sub is bound obligating Jersey Merger Sub to issue or sell any shares of capital stock of, other equity interests in or debt securities of, Jersey Merger Sub, and (B) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in Jersey Merger Sub. There are no outstanding contractual obligations of Jersey Merger Sub to repurchase, redeem or otherwise acquire any securities or equity interests of Jersey Merger Sub. There are no outstanding bonds, debentures, notes or other indebtedness of Jersey Merger Sub having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which Jersey Merger Sub’s stockholders may vote. Except for this Agreement and the Transactions, Jersey Merger Sub is not a party to any stockholders agreement, voting agreement or registration rights agreement relating to the common stock or any other equity interests of Jersey Merger Sub.
(c) As of the date hereof, the authorized share capital of Delaware Merger Sub consists of one thousand (1,000) shares of common stock, par value $0.0001 per share, of which one thousand (1,000) shares are issued and outstanding and beneficially held by Holdings as of the date of this Agreement. All of such issued and outstanding shares (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law, and (iii) were not issued in breach or violation of any preemptive rights or Contract. Except for this Agreement and the transactions contemplated hereby, as of the date hereof, there are (A) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of the common stock or the equity interests of Delaware Merger Sub, or any other Contracts to which Delaware Merger Sub is a party or by which Delaware Merger Sub is bound obligating Delaware Merger Sub to issue or sell any shares of capital stock of, other equity interests in or debt securities of, Delaware Merger Sub, and (B) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in Delaware Merger Sub. There are no outstanding contractual obligations of Delaware Merger Sub to repurchase, redeem or otherwise acquire any
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securities or equity interests of Delaware Merger Sub. There are no outstanding bonds, debentures, notes or other indebtedness of Delaware Merger Sub having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which Delaware Merger Sub’s stockholders may vote. Except for this Agreement and the Transactions, Delaware Merger Sub is not a party to any stockholders agreement, voting agreement or registration rights agreement relating to the common stock or any other equity interests of Delaware Merger Sub.
6.07 Business Activities .
(a) Since its respective organization, neither Holdings, Jersey Merger Sub nor Delaware Merger Sub has conducted any business activities other than activities directed toward the accomplishment of the Transactions. Except as set forth in their respective Organizational Documents, there is no agreement, commitment, or Governmental Order binding upon Holdings, Jersey Merger Sub or Delaware Merger Sub or to which Holdings, Jersey Merger Sub or Delaware Merger Sub is a party which has or would reasonably be expected to have the effect of prohibiting or impairing any business practice of Holdings, Jersey Merger Sub or Delaware Merger Sub or any acquisition of property by Holdings, Jersey Merger Sub or Delaware Merger Sub or the conduct of business by Holdings, Jersey Merger Sub or Delaware Merger Sub as currently conducted or as contemplated to be conducted as of the Closing other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a material adverse effect on the ability of Holdings, Jersey Merger Sub or Delaware Merger Sub to enter into and perform their obligations under this Agreement.
(b) Except for Jersey Merger Sub, Delaware Merger Sub and the Transactions, Holdings does not own or have a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity. Neither Jersey Merger Sub nor Delaware Merger Sub owns or has a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity.
(c) Each of Holdings, Jersey Merger Sub and Delaware Merger Sub was formed solely for the purpose of effecting the Transactions and has not engaged in any business activities or conducted any operations other than in connection with the Transactions and has no, and at all times prior to the Delaware Merger Effective Time except as contemplated by this Agreement or the ancillary agreements to this Agreement, will have no, assets, liabilities or obligations of any kind or nature whatsoever other than those incident to its formation.
6.08 Proxy Statement/Prospectus . None of the information relating to Holdings or its Affiliates (excluding the Company and its Subsidiaries) supplied by Holdings, or by any other Person acting on behalf of Holdings, in writing specifically for inclusion in the Proxy Statement/Prospectus will, as of the date the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first mailed to Acquiror’s stockholders, at the time of the Special Meeting or at the Effective Time, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
6.09 Brokers’ Fees . Except as described on Schedule 8.01 , no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by Holdings or any of its Affiliates (excluding the Company and its Subsidiaries) for which Holdings, the Company or any of their respective Subsidiaries has any obligation.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
OF ACQUIROR
Except as set forth in the Schedules to this Agreement (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent) or in the SEC Reports filed or furnished by Acquiror prior to the date hereof  (excluding (x) any disclosures in such SEC Reports under the headings
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“Risk Factors,” “Forward-Looking Statements” or “Qualitative Disclosures About Market Risk” and other disclosures that are predictive, cautionary or forward looking in nature and (y) any exhibits or other documents appended thereto) (it being acknowledged that nothing disclosed in such a SEC Report will be deemed to modify or qualify the representations and warranties set forth in Section 7.04 (Litigation and Proceedings); Section 7.06 (Financial Ability; Trust Account); Section 7.12 (Tax Matters); and Section 7.13 (Capitalization)), Acquiror represents and warrants to the Company as follows:
7.01 Corporate Organization . Acquiror is duly incorporated and is validly existing as a corporation in good standing under the Laws of Delaware and has the corporate power and authority to own, lease or operate its assets and properties and to conduct its business as it is now being conducted. The copies of the organizational documents of Acquiror previously delivered by Acquiror to the Company are true, correct and complete and are in effect as of the date of this Agreement. Acquiror is, and at all times has been, in compliance in all material respects with all restrictions, covenants, terms and provisions set forth in its respective organizational documents. Acquiror is duly licensed or qualified and in good standing as a foreign corporation in all jurisdictions in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified, except where failure to be so licensed or qualified has not and would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Acquiror to enter into this Agreement or consummate the transactions contemplated hereby.
7.02 Due Authorization .
(a) Acquiror has all requisite corporate or entity power and authority to execute and deliver this Agreement and each ancillary agreement to this Agreement to which it is a party and, upon receipt of the Acquiror Stockholder Approval, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and such ancillary agreements and the consummation of the transactions contemplated hereby and thereby have been duly, validly and unanimously authorized and approved by the board of directors of Acquiror and, except for the Acquiror Stockholder Approval, no other corporate or equivalent proceeding on the part of Acquiror is necessary to authorize this Agreement or such ancillary agreements or Acquiror’s performance hereunder or thereunder. This Agreement has been, and each such ancillary agreement will be, duly and validly executed and delivered by Acquiror and, assuming due authorization and execution by each other party hereto and thereto, this Agreement constitutes, and each such ancillary agreement will constitute a legal, valid and binding obligation of Acquiror, enforceable against Acquiror in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity.
(b) The affirmative vote of holders of a majority of the outstanding shares of Acquiror Common Stock entitled to vote at the Special Meeting, assuming a quorum is present, to approve the Proposals are the only votes of any of Acquiror’s capital stock necessary in connection with the entry into this Agreement by Acquiror, and the consummation of the transactions contemplated hereby, including the Closing (the “ Acquiror Stockholder Approval ”).
(c) At a meeting duly called and held, the Acquiror Board has unanimously: (i) determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of Acquiror’s stockholders; (ii) determined that the fair market value of the Company is equal to at least 80% of the amount held in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) as of the date hereof; (iii) approved the transactions contemplated by this Agreement as a Business Combination; and (iv) resolved to recommend to the stockholders of Acquiror approval of the transactions contemplated by this Agreement.
7.03 No Conflict . The execution, delivery and performance of this Agreement by Acquiror and, upon receipt of the Acquiror Stockholder Approval, the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in the breach of the Acquiror Organizational Documents or any organizational documents of any Subsidiaries of Acquiror, (b) conflict with or result in any violation of any provision of any Law or Governmental Order applicable to Acquiror or any of its properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss
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of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any Contract to which Acquiror or any Subsidiaries of Acquiror is a party or by which any of their respective assets or properties may be bound or affected, or (d) result in the creation of any Lien upon any of the properties or assets of Acquiror, except (in the case of clauses (b), (c) or (d) above) for such violations, conflicts, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Acquiror to enter into and perform its obligations under this Agreement.
7.04 Litigation and Proceedings . There are no pending or, to the knowledge of Acquiror, threatened, Actions and, to the knowledge of Acquiror, there are no pending or threatened investigations, in each case, against Acquiror, or otherwise affecting Acquiror or its assets, including any condemnation or similar proceedings, which, if determined adversely, could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Acquiror to enter into and perform its obligations under this Agreement. There is no unsatisfied judgment or any open injunction binding upon Acquiror which could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Acquiror to enter into and perform its obligations under this Agreement.
7.05 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority is required on the part of Acquiror, Holdings or Delaware Merger Sub with respect to Acquiror’s execution or delivery of this Agreement or the consummation of the transactions contemplated hereby, except for applicable requirements of the HSR Act, Securities Laws and the NYSE.
7.06 Financial Ability; Trust Account .
(a) As of the date hereof, there is at least $690,000,000 invested in a trust account at Citibank, N.A. (the “ Trust Account ”), maintained by Continental Stock Transfer & Trust Company, a New York corporation, acting as trustee (the “ Trustee ”), pursuant to the Investment Management Trust Agreement, dated September 6, 2018, by and between Acquiror and the Trustee (the “ Trust Agreement ”). Prior to the Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement, Acquiror Organizational Documents and Acquiror’s final prospectus dated September 6, 2018. Amounts in the Trust Account are invested in United States Government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. Acquiror has performed all material obligations required to be performed by it to date under, and is not in material default, breach or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach thereunder. As of the date hereof, there are no claims or proceedings pending with respect to the Trust Account. Since September 6, 2018 through the date hereof, Acquiror has not released any money from the Trust Account (other than interest income earned on the principal held in the Trust Account as permitted by the Trust Agreement). As of the Delaware Merger Effective Time, the obligations of Acquiror to dissolve or liquidate pursuant to the Acquiror Organizational Documents shall terminate, and as of the Delaware Merger Effective Time, Acquiror shall have no obligation whatsoever pursuant to the Acquiror Organizational Documents to dissolve and liquidate the assets of Acquiror by reason of the consummation of the transactions contemplated hereby. To Acquiror’s knowledge, as of the date hereof, following the Delaware Merger Effective Time, no Acquiror Stockholder shall be entitled to receive any amount from the Trust Account except to the extent such Acquiror Stockholder is a Converting Stockholder.
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(b) As of the date hereof, assuming the accuracy of the representations and warranties of the Company, Holdings, Jersey Merger Sub and Delaware Merger Sub contained herein and the compliance by the Company, Holdings, Jersey Merger Sub and Delaware Merger Sub with their respective obligations hereunder, Acquiror has no reason to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to Acquiror on the Closing Date.
(c) As of the date hereof, Acquiror does not have, or have any present intention, agreement, arrangement or understanding to enter into or incur, any obligations with respect to or under any Indebtedness.
7.07 Brokers’ Fees . Except fees described on Schedule 7.07 (including the amounts owed with respect thereto), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by Acquiror or any of its Affiliates, including the Sponsors.
7.08 SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities .
(a) Acquiror has filed in a timely manner all required registration statements, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since September 6, 2018 (collectively, as they have been amended since the time of their filing and including all exhibits thereto, the “ SEC Reports ”). None of the SEC Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements (including, in each case, the notes and schedules thereto) included in the SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the financial position of Acquiror as of the respective dates thereof and the results of their operations and cash flows for the respective periods then ended.
(b) Acquiror has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to Acquiror is made known to Acquiror’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To Acquiror’s knowledge, such disclosure controls and procedures are effective in timely alerting Acquiror’s principal executive officer and principal financial officer to material information required to be included in Acquiror’s periodic reports required under the Exchange Act.
(c) Acquiror has established and maintained a system of internal controls. To Acquiror’s knowledge, such internal controls are sufficient to provide reasonable assurance regarding the reliability of Acquiror’s financial reporting and the preparation of Acquiror’s financial statements for external purposes in accordance with GAAP.
(d) There are no outstanding loans or other extensions of credit made by Acquiror to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of Acquiror. Acquiror has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(e) Neither Acquiror (including any employee thereof) nor Acquiror’s independent auditors has identified or been made aware of  (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by Acquiror, (ii) any fraud, whether or not material, that involves Acquiror’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by Acquiror or (iii) any claim or allegation regarding any of the foregoing.
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(f) To the knowledge of Acquiror, as of the date hereof, there are no outstanding SEC comments from the SEC with respect to the SEC Reports. To the knowledge of Acquiror, none of the SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
7.09 Business Activities .
(a) Since its incorporation, Acquiror has not conducted any business activities other than activities directed toward the accomplishment of a Business Combination. Except as set forth in the Acquiror Organizational Documents, there is no agreement, commitment, or Governmental Order binding upon Acquiror or to which Acquiror is a party which has or would reasonably be expected to have the effect of prohibiting or impairing any business practice of Acquiror or any acquisition of property by Acquiror or the conduct of business by Acquiror as currently conducted or as contemplated to be conducted as of the Closing other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a material adverse effect on the ability of Acquiror to enter into and perform its obligations under this Agreement.
(b) Acquiror does not own or have a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity. Except for this Agreement and the Transactions, Acquiror has no interests, rights, obligations or liabilities with respect to, and is not party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or could reasonably be interpreted as constituting, a Business Combination.
(c) Except for this Agreement and the agreements expressly contemplated hereby (including any agreements permitted by Section 9.03 ) or as set forth on Schedule 7.09(c) , Acquiror is not, and at no time has been, party to any Contract with any other Person that would require payments by Acquiror in excess of  $10,000 monthly, $100,000 in the aggregate with respect to any individual Contract or more than $500,000 in the aggregate when taken together with all other Contracts (other than this Agreement and the agreements expressly contemplated hereby (including any agreements permitted by Section 9.03 ) and Contracts set forth on Schedule 7.09(c) ).
(d) There is no liability, debt or obligation against Acquiror or its Subsidiaries, except for liabilities and obligations (i) reflected or reserved for on Acquiror’s consolidated balance sheet for the nine months ended September 30, 2018 or disclosed in the notes thereto (other than any such liabilities not reflected, reserved or disclosed as are not and would not be, in the aggregate, material to Acquiror and its Subsidiaries, taken as a whole), (ii) that have arisen since the date of Acquiror’s consolidated balance sheet for the nine months ended September 30, 2018 in the ordinary course of the operation of business of the Acquiror and its Subsidiaries (other than any such liabilities as are not and would not be, in the aggregate, material to Acquiror and its Subsidiaries, taken as a whole), (iii) disclosed in the Schedules or (iv) incurred in connection with or contemplated by this Agreement and/or the Transactions.
7.10 Form F-4 and Proxy Statement/Prospectus . On the Effective Date, the Form F-4, and when first filed in accordance with Rule 424(b) and/or filed pursuant to Section 14A, the Proxy Statement/Prospectus (or any amendment or supplement thereto), shall comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act. On the Effective Date, the Form F-4 will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. On the date of any filing pursuant to Rule 424(b), the date the Proxy Statement/Prospectus is first mailed to Acquiror’s stockholders, and at the time of the Special Meeting, the Proxy Statement/Prospectus (together with any amendments or supplements thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that Acquiror makes no representations or warranties as to the information contained in or omitted from the Form F-4or the Proxy Statement/Prospectus in reliance upon and in conformity with information furnished in writing to the Acquiror by or on behalf of the Company, Holdings, Jersey Merger Sub or Delaware Merger Sub specifically for inclusion in the Form F-4 or the Proxy Statement/Prospectus.
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7.11 No Outside Reliance . Notwithstanding anything contained in this Article VII or any other provision hereof, Acquiror and its Affiliates and any of its and their respective directors, officers, employees, stockholders, partners, members or representatives, acknowledge and agree that Acquiror has made its own investigation of the Company and that neither the Company nor any of its Affiliates (including Holdings, Jersey Merger Sub and Delaware Merger Sub) or any of their respective directors, officers, employees, stockholders, partners, members, agents or representatives is making any representation or warranty whatsoever, express or implied, beyond those expressly given by the Company in Article V or by Holdings, Jersey Merger Sub or Delaware Merger Sub in Article VI , including any implied warranty or representation as to condition, merchantability, suitability or fitness for a particular purpose or trade as to any of the assets of the Company or its Subsidiaries. Without limiting the generality of the foregoing, it is understood that any cost estimates, financial or other projections or other predictions that may be contained or referred to in the Schedules or elsewhere, as well as any information, documents or other materials (including any such materials contained in any “data room” (whether or not accessed by Acquiror or its representatives) or reviewed by Acquiror pursuant to the Confidentiality Agreement) or management presentations that have been or shall hereafter be provided to Acquiror or any of its Affiliates, agents or representatives are not and will not be deemed to be representations or warranties of the Company or Holdings, Jersey Merger Sub or Delaware Merger Sub, and no representation or warranty is made as to the accuracy or completeness of any of the foregoing except as may be expressly set forth in Article V or Article VI of this Agreement. Except as otherwise expressly set forth in this Agreement, Acquiror understands and agrees that any assets, properties and business of the Company and its Subsidiaries are furnished “as is”, “where is” and subject to and except as otherwise provided in the representations and warranties contained in Article V or Article VI or any certificate delivered in accordance with Section 11.02(c) , with all faults and without any other representation or warranty of any nature whatsoever.
7.12 Tax Matters .
(a) All material Tax Returns required by Law to be filed by Acquiror have been filed, and all such Tax Returns are true, correct and complete in all material respects.
(b) All material amounts of Taxes due and owing by Acquiror have been paid.
(c) There are no material written Tax deficiencies outstanding, proposed or assessed against Acquiror, nor has Acquiror executed any agreements waiving the statute of limitations on or extending the period for the assessment or collection of any material Tax, in each case, which have not since expired.
(d) To the knowledge of Acquiror, no material audit or other examination of any Tax Return of Acquiror by any Tax authority is presently in progress, nor has Acquiror been notified in writing of any request for such an audit or other examination.
(e) Acquiror has not taken or agreed to take any action not contemplated by this Agreement and/or any related ancillary documents that could reasonably be expected to prevent the Delaware Merger and the Jersey Merger from qualifying for the Intended Tax Treatment. Acquiror operates at least one significant historic business line within the meaning of Treasury Regulation Section 1.368-1(d). To the knowledge of Acquiror there is no fact or circumstance that could reasonably be expected to prevent the Delaware Merger and the Jersey Merger from qualifying for the Intended Tax Treatment.
7.13 Capitalization .
(a) The authorized capital stock of Acquiror consists of  (i) 1,000,000 shares of preferred stock, of which no shares of preferred stock are issued and outstanding as of the date of this Agreement, (ii) 220,000,000 shares of Acquiror Common Stock, consisting of 200,000,000 shares of Class A Common Stock and 20,000,000 shares of Class B Common Stock of which (A) 69,000,000 shares of Acquiror Class A Common Stock are issued and outstanding as of the date of this Agreement and 17,250,000 shares of Acquiror Class B Common Stock are issued and outstanding as of the date of this Agreement and (B) 52,800,000 Acquiror Warrants are issued and outstanding as of the date of this Agreement. All of the issued and outstanding shares of Acquiror Common Stock and Acquiror Warrants (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii)
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were issued in compliance in all material respects with applicable Law, (iii) were not issued in breach or violation of any preemptive rights or Contract, and (iv) are fully vested and not otherwise subject to a substantial risk of forfeiture within the meaning of Code Section 83, except as disclosed in the SEC Reports with respect to certain Acquiror Common Stock held by the Sponsors.
(b) Except for the Acquiror Warrants, as of the date hereof, there are (i) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of Acquiror Common Stock or the equity interests of Acquiror, or any other Contracts to which Acquiror is a party or by which Acquiror is bound obligating Acquiror to issue or sell any shares of capital stock of, other equity interests in or debt securities of, Acquiror, and (ii) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in Acquiror. Except as disclosed in the SEC Reports, the Acquiror Organizational Documents or in the Sponsor Agreement, there are no outstanding contractual obligations of Acquiror to repurchase, redeem or otherwise acquire any securities or equity interests of Acquiror. There are no outstanding bonds, debentures, notes or other indebtedness of Acquiror having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which Acquiror’s stockholders may vote. Except as disclosed in the SEC Reports, Acquiror is not a party to any shareholders agreement, voting agreement or registration rights agreement relating to Acquiror Common Stock or any other equity interests of Acquiror. Acquiror does not own any capital stock or any other equity interests in any other Person or has any right, option, warrant, conversion right, stock appreciation right, redemption right, repurchase right, agreement, arrangement or commitment of any character under which a Person is or may become obligated to issue or sell, or give any right to subscribe for or acquire, or in any way dispose of, any shares of the capital stock or other equity interests, or any securities or obligations exercisable or exchangeable for or convertible into any shares of the capital stock or other equity interests, of such Person.
7.14 NYSE Stock Market Quotation . The issued and outstanding shares of Acquiror Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE under the symbol “CCC”. The issued and outstanding Acquiror Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE under the symbol “CCC WS”. Acquiror is in compliance with the rules of the NYSE and there is no action or proceeding pending or, to the knowledge of Acquiror, threatened against Acquiror by the NYSE or the SEC with respect to any intention by such entity to deregister the Acquiror Common Stock or Acquiror Warrants or terminate the listing of Acquiror Common Stock or Acquiror Warrants on the NYSE. None of Acquiror or its Affiliates has taken any action in an attempt to terminate the registration of the Acquiror Common Stock or Acquiror Warrants under the Exchange Act except as contemplated by this Agreement.
ARTICLE VIII
COVENANTS OF THE COMPANY AND HOLDINGS
8.01 Conduct of Business . From the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms (the “ Interim Period ”), the Company shall, and shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), (i) use commercially reasonable efforts to operate its business in the ordinary course consistent with past practice and (ii) continue to accrue and collect accounts receivable, accrue and pay accounts payable and other expenses, establish reserves for uncollectible accounts and manage inventory in accordance with past custom and practice. Without limiting the generality of the foregoing, except as set forth on Schedule 8.01 , as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), or as required by Law, the Company shall not, and the Company shall cause its Subsidiaries not to, during the Interim Period, except as otherwise contemplated by this Agreement:
(a) change or amend the certificate of incorporation, bylaws or other organizational documents of the Company or its Subsidiaries;
(b) (i) make, declare or pay any dividend or distribution to the stockholders of the Company in their capacities as stockholders, (ii) effect any recapitalization, reclassification, split or other change in its capitalization, (iii) except for the grant of up to 50,000 Company Options pursuant to the Company
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Stock Plan or in connection with the exercise of any Company Options, authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or deliver any additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue, sell, transfer, pledge, encumber or grant any right, option or other commitment for the issuance of shares of its capital stock, or split, combine or reclassify any shares of its capital stock or (iv) except pursuant to the Company Stock Plan, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any shares of its capital stock or other equity interests;
(c) enter into, assume, assign, partially or completely amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms) any Contract of a type required to be listed on Schedule 5.12(a) , any lease related to the Leased Real Property or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which the Company or its Subsidiaries is a party or by which it is bound, other than entry into such agreements in the ordinary course consistent with past practice;
(d) sell, transfer, lease, pledge or otherwise encumber, abandon, cancel or convey or dispose of any material assets, properties or business of the Company and its Subsidiaries, taken as a whole, except for sales or dispositions of obsolete or worthless assets or items or materials in an amount not in excess of $2,000,000 in the aggregate, other than (A) customary pledges of such assets in connection with the First Lien Credit Facility, (B) Permitted Liens or (C) the expiration of Registered Intellectual Property that has been issued or registered (and not merely applied for) in accordance with the applicable statutory term (or in the case of domain names, applicable registration period) or in the exercise of the Company’s or its Subsidiary’s business judgment as to the costs and benefits of maintaining the item;
(e) except as otherwise required pursuant to existing Company Benefit Plans, policies or Contracts of the Company or its Subsidiaries in effect on the date of this Agreement, (i) grant any material increase in compensation, benefits or severance to any employee of the Company or its Subsidiaries, except in the ordinary course of business consistent with past practice for any employee of the Company with an annual base compensation salary less than $300,000 or for ordinary course annual salary increases for 2019 for all employees that do not exceed, in the aggregate, 4% of the aggregate salary paid by the Company and its Subsidiaries in calendar year 2018, (ii) except in the ordinary course of business, adopt, enter into or materially amend any Company Benefit Plan (other than the Company Stock Plan and awards thereunder), (iii) grant or provide any severance or termination payments or benefits to any employee of the Company or its Subsidiaries, except in connection with the promotion, hiring (to the extent permitted by clause (iv) of this paragraph) or firing of any employee in the ordinary course of business consistent with past practice, or (iv) hire any employee of the Company or its Subsidiaries or any other individual who is providing or will provide services to the Company or its Subsidiaries other than any employee with an annual base salary of less than $300,000 in the ordinary course of business consistent with past practice;
(f) (i) fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof; or (ii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its Subsidiaries (other than the transactions contemplated by this Agreement);
(g) make any capital expenditures (or commitment to make any capital expenditures) that in the aggregate exceed $2,000,000, other than any capital expenditure (or series of related capital expenditures) consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date hereof, made available to Acquiror;
(h) make any loans or advances to any third party, except for advances to employees or officers of the Company or its Subsidiaries in the ordinary course of business consistent with past practice;
(i) make or change any material Tax election or adopt or change any material Tax accounting method, file any amendment to a material Tax Return, enter into any agreement with a Governmental Authority with respect to Taxes, settle or compromise any claim or assessment by a Governmental
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Authority in respect of material Taxes, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, enter into any Tax sharing or similar agreement, or take or fail to take any similar action relating to Taxes, if such election, change, amendment, agreement, settlement, consent or other action would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax asset of Holdings and its Affiliates (including the Company and its Subsidiaries) in a manner that will disproportionately affect Acquiror Stockholders (as compared to Company Shareholders) after the Closing;
(j) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Intended Tax Treatment;
(k) enter into any agreement that restricts the ability of the Company or its Subsidiaries to engage or compete in any line of business, or enter into any agreement that restricts the ability of the Company or its Subsidiaries to enter a new line of business;
(l) enter into, renew or amend in any material respect any Affiliate Agreement;
(m) waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened Action) or compromise or settle any liability, other than in the ordinary course of business or that otherwise do not exceed $2,500,000 in the aggregate (net of insurance recoveries);
(n) incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness, other than in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities (including the First Lien Credit Facility and the Existing Notes), provided, that, in no event shall any such borrowing, extension of credit or other financial accommodation be subject to any prepayment fee or penalty or similar arrangement or amend, restate or modify any terms of or any agreement with respect to any outstanding Indebtedness, other than pursuant to the First Lien Credit Facility or the Existing Notes;
(o) make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, except insofar as may have been required by a change in GAAP;
(p) voluntarily fail to maintain, cancel or materially change coverage under any insurance policy in form and amount equivalent in all material respects to the insurance coverage currently maintained with respect to the Company and its Subsidiaries and their assets and properties; and
(q) enter into any agreement to do any action prohibited under this Section 8.01 .
8.02 Inspection . Subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to the Company or its Subsidiaries by third parties that may be in the Company’s or its Subsidiaries’ possession from time to time, and except for any information which in the opinion of legal counsel of the Company would result in the loss of attorney-client privilege or other privilege from disclosure, the Company shall, and shall cause its Subsidiaries to, afford to Acquiror and its Representatives reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, in such manner as to not interfere with the normal operation of the Company and its Subsidiaries, to all of their respective properties, books, Contracts, commitments, Tax Returns, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information concerning the affairs of the Company and its Subsidiaries that are in the possession of the Company or its Subsidiaries as such Representatives may reasonably request. The parties shall use commercially reasonable efforts to make alternative arrangements for such disclosure where the restrictions in the preceding sentence apply. All information obtained by Acquiror and its Representatives under this Agreement shall be subject to the Confidentiality Agreement prior to the Delaware Merger Effective Time.
8.03 HSR Act and Regulatory Approvals . In connection with the transactions contemplated by this Agreement, the Company shall (and, to the extent required, shall cause its Affiliates to) comply promptly but in no event later than ten Business Days after the date hereof with the notification and reporting
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requirements of the HSR Act. The Company shall (i) substantially comply with any Information or Document Requests and (ii) request early termination of any waiting period under the HSR Act. The Company shall promptly furnish to Acquiror copies of any notices or written communications received by the Company or any of its Affiliates from any third party or any Governmental Authority with respect to the transactions contemplated by this Agreement, and the Company shall permit counsel to Acquiror an opportunity to review in advance, and the Company shall consider in good faith the views of such counsel in connection with, any proposed written communications by the Company and/or its Affiliates to any Governmental Authority concerning the transactions contemplated by this Agreement; provided, that the Company shall not extend any waiting period or comparable period under the HSR Act or enter into any agreement with any Governmental Authority without the written consent of Acquiror. The Company agrees to provide, to the extent permitted by the applicable Governmental Authority, Acquiror and its counsel the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between the Company and/or any of its Affiliates, agents or advisors, on the one hand, and any Governmental Authority, on the other hand, concerning or in connection with the transactions contemplated hereby.
8.04 Termination of Certain Agreements . On and as of the Closing, the Company shall take all actions necessary to cause the Contracts (a) listed on Schedule 8.04(a) to be terminated without any further force and effect without any cost or other liability or obligation to the Company or its Subsidiaries, and there shall be no further obligations of any of the relevant parties thereunder following the Closing; and (b) listed on Schedule 8.04(b) to be expressly assumed by Holdings.
8.05 No Acquiror Common Stock Transactions . From and after the date of this Agreement until the Delaware Merger Effective Time, except as otherwise contemplated by this Agreement, none of the Company, any of its Subsidiaries or controlling Affiliates, Holdings, Jersey Merger Sub or Delaware Merger Sub, directly or indirectly, shall engage in any transactions involving the securities of Acquiror without the prior consent of Acquiror. The Company shall use commercially reasonable efforts to require each of its Subsidiaries and controlling Affiliates to comply with the foregoing sentence.
8.06 No Claim Against the Trust Account . Each of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub acknowledges that it has read Acquiror’s final prospectus, dated September 6, 2018 and other SEC Reports, the Acquiror Organizational Documents, and the Trust Agreement and understands that Acquiror has established the Trust Account described therein for the benefit of Acquiror’s public stockholders and that disbursements from the Trust Account are available only in the limited circumstances set forth therein. Each of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub further acknowledges that, if the transactions contemplated by this Agreement, or, in the event of termination of this Agreement, another Business Combination, are not consummated by September 6, 2020 or such later date as approved by the shareholders of Acquiror to complete a Business Combination, Acquiror will be obligated to return to its stockholders the amounts being held in the Trust Account. Accordingly, each of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub (on behalf of itself and its Affiliates) hereby waives any past, present or future claim of any kind against, and any right to access, the Trust Account, any trustee of the Trust Account and Acquiror to collect from the Trust Account any monies that may be owed to them by Acquiror or any of its Affiliates for any reason whatsoever, and will not seek recourse against the Trust Account at any time for any reason whatsoever. This Section 8.06 shall survive the termination of this Agreement for any reason.
8.07 Proxy Solicitation; Other Actions .
(a) The Company agrees to use commercially reasonable efforts to provide Acquiror, no later than March 15, 2019, audited financial statements, including consolidated balance sheets, statements of operations, statements of cash flows, and statements of stockholders equity of the Company and its Subsidiaries as of and for the years ended December 31, 2018 and December 31, 2017, in each case, prepared in accordance with GAAP and Regulation S-X. The Company shall be available to, and the Company and its Subsidiaries shall use reasonable best efforts to make their officers and employees available to, in each case, during normal business hours and upon reasonable advanced notice, Acquiror and its counsel in connection with (i) the drafting of the Proxy Statement/Prospectus and (ii) responding in a timely manner to comments on the Proxy Statement/Prospectus from the SEC.
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Without limiting the generality of the foregoing, the Company shall reasonably cooperate with Acquiror in connection with the preparation for inclusion in the Proxy Statement/Prospectus of pro forma financial statements that comply with the requirements of Regulation S-X under the rules and regulations of the SEC (as interpreted by the staff of the SEC).
(b) From and after the date on which the Proxy Statement/Prospectus is mailed to Acquiror’s stockholders, the Company will give Acquiror prompt written notice of any action taken or not taken by the Company or its Subsidiaries or of any development regarding the Company or its Subsidiaries, in any such case which is known by the Company, that would cause the Proxy Statement/Prospectus to contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading; provided , that , if any such action shall be taken or fail to be taken or such development shall otherwise occur, Acquiror and the Company shall cooperate fully to cause an amendment or supplement to be made promptly to the Proxy Statement/Prospectus or, to the extent required by Securities Laws, a post-effective amendment to the Form F-4, such that the Form F-4 and the Proxy Statement/​Prospectus no longer contain an untrue statement of a material fact or omit to state to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading; provided , further , however , that no information received by Acquiror pursuant to this Section 8.07 shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by the party who disclosed such information, and no such information shall be deemed to change, supplement or amend the Schedules.
8.08 Director Appointments . Except as otherwise agreed in writing by the Company and Acquiror prior to the Closing, and conditioned upon the occurrence of the Closing, Holdings shall take all actions necessary or appropriate to cause (a) the number of directors constituting the Holdings Board to be such number as is specified on Schedule 8.08 and (b) the individuals set forth on Schedule 8.08 to be elected as members of the Holdings Board, effective as of the Closing. On the Closing Date, Holdings shall enter into customary indemnification agreements reasonably satisfactory to the Company with the individuals set forth on Schedule 8.08 , which indemnification agreements shall continue to be effective following the Closing.
8.09 Holdings NYSE Listing . From the date hereof through the Closing, Holdings shall use reasonable efforts to cause the Holdings Shares and Holdings Warrants to be issued in connection with the Jersey Merger and the Delaware Merger to be approved for listing on the NYSE as of the Closing Date.
8.10 Incentive Equity Plan . Prior to the Closing Date, Holdings may cause to be adopted a management incentive equity plan, the form of which shall be prepared and delivered by the Company; provided that, such management incentive equity plan shall be consistent with the Intended Tax Treatment (assuming, solely for purposes of such determination, that all grants with respect to Holdings’ equity made pursuant to such management incentive equity plan shall be considered made in connection with the transactions contemplated hereby).
ARTICLE IX
COVENANTS OF ACQUIROR
9.01 HSR Act and Regulatory Approvals .
(a) In connection with the transactions contemplated by this Agreement, Acquiror shall (and, to the extent required, shall cause its Affiliates to) comply promptly but in no event later than ten Business Days after the date hereof with the notification and reporting requirements of the HSR Act. Acquiror shall substantially comply with any Information or Document Requests.
(b) Acquiror shall request early termination of any waiting period under the HSR Act and exercise its commercially reasonable efforts to (i) obtain termination or expiration of the waiting period under the HSR Act, (ii) prevent the entry in any Action brought by a Regulatory Consent Authority or any other Person of any Governmental Order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by this Agreement and (iii) if any such Governmental Order is issued in any such Action, cause such Governmental Order to be lifted.
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(c) Acquiror shall cooperate in good faith with the Regulatory Consent Authorities and undertake promptly any and all action required to complete lawfully the transactions contemplated by this Agreement as soon as practicable (but in any event prior to the Termination Date) and any and all action necessary or advisable to avoid, prevent, eliminate or remove the actual or threatened commencement of any proceeding in any forum by or on behalf of any Regulatory Consent Authority or the issuance of any Governmental Order that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the Delaware Merger, including (i) proffering and consenting and/or agreeing to a Governmental Order or other agreement providing for (A) the sale, licensing or other disposition, or the holding separate, of particular assets, categories of assets or lines of business of the Company or Acquiror or (B) the termination, amendment or assignment of existing relationships and contractual rights and obligations of the Company or Acquiror and (ii) promptly effecting the disposition, licensing or holding separate of assets or lines of business or the termination, amendment or assignment of existing relationships and contractual rights, in each case, at such time as may be necessary to permit the lawful consummation of the transactions contemplated hereby on or prior to the Termination Date. The entry by any Governmental Authority in any Action of a Governmental Order permitting the consummation of the transactions contemplated hereby but requiring any of the assets or lines of business of Acquiror to be sold, licensed or otherwise disposed or held separate thereafter (including the business and assets of the Company and its Subsidiaries) shall not be deemed a failure to satisfy any condition specified in Article XI .
(d) Acquiror shall promptly furnish to the Company copies of any notices or written communications received by Acquiror or any of its Affiliates from any third party or any Governmental Authority with respect to the transactions contemplated by this Agreement, and Acquiror shall permit counsel to the Company an opportunity to review in advance, and Acquiror shall consider in good faith the views of such counsel in connection with, any proposed written communications by Acquiror and/or its Affiliates to any Governmental Authority concerning the transactions contemplated by this Agreement; provided , that Acquiror shall not extend any waiting period or comparable period under the HSR Act or enter into any agreement with any Governmental Authority without the written consent of the Company. Acquiror agrees to provide the Company and its counsel the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between Acquiror and/or any of its Affiliates, agents or advisors, on the one hand, and any Governmental Authority, on the other hand, concerning or in connection with the transactions contemplated hereby.
(e) Each of the Company and Acquiror shall pay 50% of all filing fees payable to the Regulatory Consent Authorities in connection with the transactions contemplated by this Agreement.
9.02 Indemnification and Insurance .
(a) From and after the Delaware Merger Effective Time, Holdings, the Surviving Jersey Company and the Surviving Delaware Company agree that they shall indemnify and hold harmless each present and former director and officer of the Company and Acquiror and each of their respective Subsidiaries against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any Action, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Delaware Merger Effective Time, whether asserted or claimed prior to, at or after the Delaware Merger Effective Time, to the fullest extent that the Company, Acquiror or their respective Subsidiaries, as the case may be, would have been permitted under applicable Law and its respective certificate of incorporation, bylaws or other organizational documents in effect on the date of this Agreement to indemnify such Person (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law). Without limiting the foregoing, Holdings shall, and shall cause the Surviving Jersey Company, the Surviving Delaware Company and their respective Subsidiaries to, (i) maintain for a period of not less than six years from the Delaware Merger Effective Time provisions in its certificate of incorporation (if applicable), bylaws and other organizational documents concerning the indemnification and exoneration (including provisions relating to expense advancement) of officers and directors that are no less favorable to those Persons than the provisions of such certificates of incorporation (if applicable), bylaws and other organizational documents as of
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the date of this Agreement and (ii) not amend, repeal or otherwise modify such provisions in any respect that would adversely affect the rights of those Persons thereunder, in each case, except as required by Law. Holdings shall assume, and be liable for, and shall cause the Surviving Jersey Company, the Surviving Delaware Company and their respective Subsidiaries to honor, each of the covenants in this Section 9.02 .
(b) For a period of six years from the Delaware Merger Effective Time, Holdings shall, or shall cause one or more of its Subsidiaries to, maintain in effect directors’ and officers’ liability insurance covering those Persons who are currently covered by the Company’s or its Subsidiaries’ directors’ and officers’ liability insurance policies (true, correct and complete copies of which have been heretofore made available to Acquiror or its agents or representatives) on terms not less favorable than the terms of such current insurance coverage, except that in no event shall Holdings or its Subsidiaries be required to pay an annual premium for such insurance in excess of 300% of the aggregate annual premium payable by the Company and its Subsidiaries for such insurance policy for the year ended December 31, 2018; provided , however , that (i) Holdings may cause coverage to be extended under the current directors’ and officers’ liability insurance by obtaining a six-year “tail” policy containing terms not materially less favorable than the terms of such current insurance coverage with respect to claims existing or occurring at or prior to the Delaware Merger Effective Time and (ii) if any claim is asserted or made within such six-year period, any insurance required to be maintained under this Section 9.02 shall be continued in respect of such claim until the final disposition thereof.
(c) Notwithstanding anything contained in this Agreement to the contrary, this Section 9.02 shall survive the consummation of the Delaware Merger indefinitely and shall be binding, jointly and severally, on Holdings, the Surviving Jersey Company and the Surviving Delaware Company and all successors and assigns of Holdings, the Surviving Jersey Company and the Surviving Delaware Company. In the event that Holdings, the Surviving Jersey Company, the Surviving Delaware Company or any of their respective successors or assigns consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, Holdings, the Surviving Jersey Company and the Surviving Delaware Company shall ensure that proper provision shall be made so that the successors and assigns of Holdings, the Surviving Jersey Company or the Surviving Delaware Company, as the case may be, shall succeed to the obligations set forth in this Section 9.02 .
9.03 Conduct of Acquiror During the Interim Period .
(a) During the Interim Period, except as set forth on Schedule 9.03 or as contemplated by this Agreement or as consented to by the Company in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied, except, in the case of clauses (vii) and (ix) below, as to which the Company’s consent may be granted or withheld in its sole discretion), Acquiror shall not and each shall not permit any of its Subsidiaries to:
(i) change, modify or amend the Trust Agreement or the Acquiror Organizational Documents;
(ii) (A) declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, Acquiror; (B) split, combine or reclassify any capital stock of, or other equity interests in, Acquiror; or (C) other than in connection with the Offer or as otherwise required by Acquiror’s Organizational Documents in order to consummate the transactions contemplated hereby, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, Acquiror;
(iii) make or change any material Tax election or adopt or change any material Tax accounting method, file any amendment to a material Tax Return, enter into any agreement with a Governmental Authority with respect to Taxes, settle or compromise any claim or assessment by a Governmental Authority in respect of material Taxes, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, enter
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into any Tax sharing or similar agreement, or take or fail to take any similar action relating to Taxes, if such election, change, amendment, agreement, settlement, consent or other action would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax asset of Holdings, the Company, the Surviving Jersey Company, the Surviving Delaware Company or their respective Affiliates and Subsidiaries after the Closing;
(iv) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede the Intended Tax Treatment;
(v) other than as expressly permitted pursuant to the provisos of Section 9.03(a)(vii) , enter into, renew or amend in any material respect, any transaction or Contract with an Affiliate of Acquiror (including, for the avoidance of doubt, (x) the Sponsors or anyone related by blood, marriage or adoption to any Sponsor and (y) any Person in which any Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);
(vi) waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened Action) or compromise or settle any liability;
(vii) incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness; or
(viii) (A) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity interests in, Acquiror or any of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than in connection with the exercise of any Acquiror Warrants outstanding on the date hereof or (B) amend, modify or waive any of the terms or rights set forth in, any Acquiror Warrant or the Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein.
(b) During the Interim Period, Acquiror shall, and shall cause its Subsidiaries to comply with, and continue performing under, as applicable, the Acquiror Organizational Documents, the Trust Agreement and all other agreements or Contracts to which Acquiror or its Subsidiaries may be a party.
9.04 Trust Account . Prior to or at the Closing (subject to the satisfaction or waiver of the conditions set forth in Article XI ), Acquiror shall make appropriate arrangements to cause the funds in the Trust Account to be disbursed in accordance with the Trust Agreement for the following: (a) the redemption of any shares of Acquiror Common Stock in connection with the Offer; (b) the payment of the Outstanding Company Expenses and Outstanding Acquiror Expenses pursuant to Section 4.07 ; and (c) the balance of the assets in the Trust Account, if any, after payment of the amounts required under the foregoing clauses (a) and (b), to be disbursed to Acquiror.
9.05 Inspection . Subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to Acquiror or its Subsidiaries by third parties that may be in Acquiror’s or its Subsidiaries’ possession from time to time, and except for any information which in the opinion of legal counsel of Acquiror would result in the loss of attorney-client privilege or other privilege from disclosure, Acquiror shall afford to the Company, its Affiliates and their respective Representatives reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, to all of their respective properties, books, Contracts, commitments, Tax Returns, records and appropriate officers and employees of Acquiror, and shall furnish such Representatives with all financial and operating data and other information concerning the affairs of Acquiror that are in the possession of Acquiror as such Representatives may reasonably request. The parties shall use commercially reasonable efforts to make alternative arrangements for such disclosure where the restrictions in the preceding sentence apply. All information obtained by the Company, its Affiliates and their respective Representatives under this Agreement shall be subject to the Confidentiality Agreement prior to the Delaware Merger Effective Time.
9.06 Acquiror NYSE Listing . From the date hereof through the Closing, Acquiror shall use reasonable efforts to ensure Acquiror remains listed as a public company on, and for shares of Acquiror Common Stock and Acquiror Warrants to be listed on, the NYSE.
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9.07 Acquiror Public Filings . From the date hereof through the Closing, Acquiror will keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable Securities Laws.
ARTICLE X
JOINT COVENANTS
10.01 Support of Transaction . Without limiting any covenant contained in Article VIII or Article IX , including the obligations of the Company and Acquiror with respect to the notifications, filings, reaffirmations and applications described in Section 8.03 and Section 9.01 , respectively, which obligations shall control to the extent of any conflict with the succeeding provisions of this Section 10.01 , Holdings, Acquiror and the Company shall each, and shall each cause their respective Subsidiaries to: (a) use commercially reasonable efforts to assemble, prepare and file any information (and, as needed, to supplement such information) as may be reasonably necessary to obtain as promptly as practicable all governmental and regulatory consents required to be obtained in connection with the Transactions, (b) use commercially reasonable efforts to obtain all material consents and approvals of third parties that any of Acquiror, the Company, or their respective Affiliates are required to obtain in order to consummate the Transactions, including any required approvals of parties to material Contracts with the Company or its Subsidiaries, and (c) take such other action as may reasonably be necessary or as another party may reasonably request to satisfy the conditions of Article XI or otherwise to comply with this Agreement and to consummate the Transactions as soon as practicable. Notwithstanding the foregoing, in no event shall Acquiror, Holdings, Delaware Merger Sub, Jersey Merger Sub, the Company or its Subsidiaries be obligated to bear any expense or pay any fee or grant any concession in connection with obtaining any consents, authorizations or approvals pursuant to the terms of any Contract to which the Company or its Subsidiaries is a party or otherwise in connection with the consummation of the Transactions.
10.02 Preparation of Form F-4 & Proxy Statement; Special Meeting .
(a) As promptly as practicable following the execution and delivery of this Agreement, Acquiror, the Company and Holdings shall use reasonable best efforts to prepare and mutually agree upon (such agreement not to be unreasonably withheld or delayed), and Holdings shall file with the SEC, the Form F-4 (it being understood that the Form F-4 shall include the Proxy Statement/Prospectus which will be included therein as a prospectus and which will be used as a proxy statement for the Special Meeting with respect to the Proposals (as defined below)).
(b) Each of Acquiror, the Company and Holdings shall cooperate and mutually agree upon (such agreement not to be unreasonably withheld or delayed), any response to comments of the SEC or its staff with respect to the Form F-4 or Proxy Statement/Prospectus and any amendment to the Form F-4 or Proxy Statement filed in response thereto. If Acquiror, the Company or Holdings becomes aware that any information contained in the Form F-4 or Proxy Statement/Prospectus shall have become false or misleading in any material respect or that the Form F-4 or Proxy Statement/Prospectus is required to be amended in order to comply with applicable Law, then (i) such party shall promptly inform the other parties and (ii) Acquiror, on the one hand, and the Company and Holdings, on the other hand, shall cooperate and mutually agree upon (such agreement not to be unreasonably withheld or delayed) an amendment or supplement to the Form F-4 and Proxy Statement/Prospectus. Acquiror, the Company and Holdings shall use reasonable best efforts to cause the Proxy Statement/Prospectus as so amended or supplemented, to be filed with the SEC and to be disseminated to the holders of shares of Acquiror Common Stock, as applicable, in each case pursuant to applicable Law and subject to the terms and conditions of this Agreement and the Acquiror Organizational Documents. Each of the Company, Holdings and Acquiror shall provide the other parties with copies of any written comments, and shall inform such other parties of any oral comments, that Acquiror receives from the SEC or its staff with respect to the Form F-4 or Proxy Statement promptly after the receipt of such comments and shall give the other parties a reasonable opportunity to review and comment on any proposed written or oral responses to such comments prior to responding to the SEC or its staff. Acquiror, the Company and Holdings shall use reasonable best efforts to cause the Form F-4 to be declared effective as promptly as practicable after it is filed with the SEC and to keep the Form F-4 effective through the Closing in order to permit the consummation of the transactions contemplated hereby.
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(c) Acquiror shall file the Proxy Statement on Schedule 14A in accordance with the rules and regulations of the Exchange Act. Acquiror agrees to include provisions in the Proxy Statement and to take reasonable action related thereto, with respect to (i) the adoption and approval of this Agreement, (ii) the approval of the Delaware Merger and (iii) approval of any other proposals reasonably agreed by Acquiror and the Company to be necessary or appropriate in connection with the transaction contemplated hereby (collectively, the “ Proposals ”). Without the prior written consent of the Company, the Proposals shall be the only matters (other than procedural matters) which Acquiror shall propose to be acted on by Acquiror’s stockholders at the Special Meeting.
(d) Acquiror, the Company and Holdings shall use reasonable best efforts to, as promptly as practicable (and in any event, within seven Business Days after the SEC Clearance Date), (i) cause the Proxy Statement/Prospectus to be disseminated to Acquiror’s stockholders in compliance with applicable Law, (ii) establish the record date for, duly call, give notice of, convene and hold the Special Meeting in accordance with the DGCL for a date no later than thirty days following the SEC Clearance Date and (iii) solicit proxies from the holders of Acquiror Common Stock to vote in favor of each of the Proposals. Acquiror shall, through the Acquiror Board, recommend to its stockholders that they approve the Proposals and shall include such recommendation in the Proxy Statement/Prospectus. Notwithstanding the foregoing provisions of this Section 10.02(d) , if on a date for which the Special Meeting is scheduled, Acquiror has not received proxies representing a sufficient number of shares of Acquiror Common Stock to obtain the Acquiror Stockholder Approval, whether or not a quorum is present, Acquiror shall have the right to make one or more successive postponements or adjournments of the Special Meeting, provided that the Special Meeting (x) is not postponed or adjourned to a date that is more than 45 days after the date for which the Special Meeting was originally scheduled (excluding any adjournments or postponements required by applicable Law) and (y) is held no later than three Business Days prior to the Termination Date.
10.03 Exclusivity .
(a) During the Interim Period, the Company shall not take, nor shall it permit any of its Affiliates or Representatives to take, whether directly or indirectly, any action to solicit, initiate or engage in discussions or negotiations with, or enter into any agreement with, or encourage, or provide information to, any Person (other than Acquiror and/or any of its Affiliates or Representatives) concerning any purchase of any of the Company’s equity securities or the issuance and sale of any securities of, or membership interests in, the Company or its Subsidiaries (other than any purchases of equity securities by the Company from employees of the Company or its Subsidiaries, grants of Company Options in accordance with Section 8.01(b) and issuances of Company Shares upon the exercise of Company Options) or any merger or sale of substantial assets involving the Company or its Subsidiaries, other than immaterial assets or assets sold in the ordinary course of business (each such acquisition transaction, but excluding the Transactions, an “ Acquisition Transaction ”). Notwithstanding the foregoing, the Company may respond to any unsolicited proposal regarding an Acquisition Transaction by indicating only that the Company is subject to an exclusivity agreement and is unable to provide any information related to the Company and its Subsidiaries or entertain any proposals or offers or engage in any negotiations or discussions concerning an Acquisition Transaction for as long as that exclusivity agreement remains in effect and, in such event, the Company shall notify Acquiror of such facts and circumstances. The Company shall, and shall cause its Affiliates and Representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted prior to the date hereof with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction.
(b) During the Interim Period, Acquiror shall not take, nor shall it permit any of its Affiliates or Representatives to take, whether directly or indirectly, any action to solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any Person (other than the Company, its shareholders and/or any of their Affiliates or Representatives), concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any Business Combination (a “ Business Combination Proposal ”) other than with the Company, its shareholders and their respective Affiliates and Representatives.
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Acquiror shall, and shall cause its Affiliates and Representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted prior to the date hereof with respect to, or which is reasonably likely to give rise to or result in, a Business Combination Proposal.
10.04 Tax Matters .
(a) Transfer Taxes . Notwithstanding anything to the contrary contained herein, the Company shall pay all transfer, documentary, sales, use, stamp, registration, value added or other similar Taxes incurred in connection with the Transactions. The Company shall, at its own expense, file all necessary Tax Returns with respect to all such Taxes, and, if required by applicable Law, Acquiror will join in the execution of any such Tax Returns.
(b) Tax Treatment . Acquiror, Holdings, Jersey Merger Sub, Delaware Merger Sub and the Company intend that (i) the Delaware Merger shall constitute a “reorganization” within the meaning of Section 368(a) of the Code and (ii) the Delaware Merger, taken together with the Jersey Merger, shall constitute a transaction that qualifies under Section 351 of the Code and that each of the Jersey Merger and the Delaware Merger shall qualify as foreign mergers within the meaning of subsection 87(8.1) of the Income Tax Act (Canada), and each shall, and shall cause its respective Affiliates to, use commercially reasonable efforts to so qualify. Each of the parties agrees to promptly notify all other parties of any challenge to the Intended Tax Treatment by any Governmental Authority.
(c) The Company, Acquiror, Holdings, Jersey Merger Sub and Delaware Merger Sub hereby adopt this Agreement as a “plan of reorganization” within the meaning of Treasury Regulation Sections 1.368-2(g) and 1.368-3(a).
(d) The parties hereto shall use commercially reasonable efforts to cooperate in connection with fulfilling Tax reporting requirements if and to the extent reasonably requested by any Acquiror Stockholder that is a five-percent transferee shareholder (as such term is defined in Treasury Regulations Section 1.367(a)-3(c)(5)(ii)).
10.05 Confidentiality; Publicity .
(a) Acquiror acknowledges that the information being provided to it in connection with this Agreement and the consummation of the transactions contemplated hereby is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference. At the Delaware Merger Effective Time, the Confidentiality Agreement shall terminate with respect to information relating to the Company and its Subsidiaries.
(b) None of Acquiror, the Company or any of their respective Affiliates shall make any public announcement or issue any public communication regarding this Agreement or the transactions contemplated hereby, or any matter related to the foregoing, without first obtaining the prior consent of the Company or Acquiror, as applicable (which consent shall not be unreasonably withheld, conditioned or delayed), except if such announcement or other communication is required by applicable Law or legal process (including pursuant to the Securities Law or the rules of any national securities exchange), in which case Acquiror or the Company, as applicable, shall use their commercially reasonable efforts to coordinate such announcement or communication with the other party, prior to announcement or issuance; provided , however , that, subject to this Section 10.05 , each party hereto and its Affiliates may make announcements regarding this Agreement and the transactions contemplated hereby to their respective directors, officers, employees, direct and indirect limited partners and investors without the consent of any other party hereto; and provided , further , that subject to Section 8.02 and this Section 10.05 , the foregoing shall not prohibit any party hereto from communicating with third parties to the extent necessary for the purpose of seeking any third party consent.
10.06 Post-Closing Cooperation; Further Assurances . Following the Closing, each party shall, on the request of any other party, execute such further documents, and perform such further acts, as may be reasonably necessary or appropriate to give full effect to the allocation of rights, benefits, obligations and liabilities contemplated by this Agreement and the transactions contemplated hereby.
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ARTICLE XI
CONDITIONS TO OBLIGATIONS
11.01 Conditions to Obligations of All Parties . The obligations of the parties hereto to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following conditions, any one or more of which may be waived (if legally permitted) in writing by all of such parties:
(a) HSR Approval . The applicable waiting period(s) under the HSR Act in respect of the Transactions shall have expired or been terminated.
(b) No Prohibition . There shall not be in force any Governmental Order, statute, rule or regulation enjoining or prohibiting the consummation of the Transactions.
(c) Offer Completion . The Offer shall have been completed in accordance with the terms hereof and the Proxy Statement/Prospectus.
(d) Net Tangible Assets . Acquiror shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the closing of the Offer.
(e) Amended and Restated Organizational Documents . The memorandum of association and articles of association of Holdings shall have been amended and restated in their entirety in substantially the form attached hereto as Exhibit F .
(f) Form F-4 . The Form F-4 shall have become effective in accordance with the provisions of the Securities Act, no stop order shall have been issued by the SEC which remains in effect with respect to the Form F-4, and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC which remains pending.
(g) NYSE . The Holdings Shares and Holdings Warrants to be issued in connection with the Delaware Merger and the Jersey Merger shall have been approved for listing on NYSE, subject only to official notice of issuance thereof.
(h) Stockholder Approval . The Acquiror Stockholder Approval shall have been obtained.
11.02 Additional Conditions to Obligations of Acquiror . The obligations of Acquiror to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by Acquiror:
(a) Representations and Warranties .
(i) Each of the representations and warranties (A) of the Company contained in the first sentence of Section 5.01(a) (Due Incorporation), Section 5.03 (Due Authorization), Section 5.06(a) (Current Capitalization) and Section 5.16 (Brokers’ Fees) and (B) of Holdings, Jersey Merger Sub and Delaware Merger Sub contained in Section 6.01 (Organization and Entity Power), Section 6.02 (Due Authorization), Section 6.06 (Capitalization) and Section 6.09 (Brokers’ Fees) (clauses (A) and (B) together, the “ Specified Representations ”), in each case shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date).
(ii) The representations and warranties of the Company contained in Section 5.20(a) (No Material Adverse Effect) shall be true and correct in all respects as of the Closing Date.
(iii) Each of the representations and warranties of the Company and Holdings, Jersey Merger Sub and Delaware Merger Sub contained in this Agreement (other than the Specified Representations and the representations and warranties of the Company contained in Section 5.20(a) ), shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date as though then made (except to the extent such representations and warranties
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expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect.
(b) Agreements and Covenants . Each of the covenants of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub to be performed as of or prior to the Closing shall have been performed in all material respects.
(c) Officer’s Certificate . The Company shall have delivered to Acquiror a certificate signed by an officer of the Company, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the conditions specified in Section 11.02(a) and Section 11.02(b) have been fulfilled.
(d) Nominating Agreement . Holdings shall have executed and delivered the Nominating Agreement.
(e) Registration Rights Agreement . Holdings shall have executed and delivered the Registration Rights Agreement
11.03 Additional Conditions to the Obligations of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub . The obligation of the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub to consummate the Transactions is subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company:
(a) Representations and Warranties . Each of the representations and warranties of Acquiror contained in this Agreement (other than the representations and warranties of the Acquiror contained in Section 7.13 (Capitalization)) (without giving effect to any materiality qualification therein) shall be true and correct in all material respects as of the Closing Date, as if made anew at and as of that time, except with respect to representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date.
(b) Capitalization . The representations and warranties of the Acquiror contained in Section 7.13 (Capitalization) shall be true and correct other than de minimis inaccuracies, as of the Closing Date, as if made anew at and as of that time.
(c) Agreements and Covenants . Each of the covenants of Acquiror to be performed as of or prior to the Closing shall have been performed in all material respects.
(d) Available Closing Date Cash . The Available Closing Date Cash shall not be less than $550,000,000.
(e) Officer’s Certificate . Acquiror shall have delivered to the Company a certificate signed by an officer of Acquiror, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the conditions specified in Section 11.03(a) , Section 11.03(b) , Section 11.03(c) and Section 11.03(d) have been fulfilled.
(f) Sponsor Agreement . Each of the covenants of each Sponsor required under the Sponsor Agreement to be performed as of or prior to the Closing shall have been performed in all material respects, and none of the Sponsors shall have threatened (orally or in writing) (i) that the Sponsor Agreement is not valid, binding and in full force and effect, (ii) that Holdings or the Company is in breach of or default under the Sponsor Agreement or (iii) to terminate the Sponsor Agreement.
ARTICLE XII
TERMINATION/EFFECTIVENESS
12.01 Termination . This Agreement may be terminated and the transactions contemplated hereby abandoned:
(a) by written consent of the Company and Acquiror;
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(b) prior to the Closing, by written notice to the Company from Acquiror if  (i) there is any breach of any representation, warranty, covenant or agreement on the part of the Company, Holdings, Delaware Merger Sub or Jersey Merger Sub set forth in this Agreement, such that the conditions specified in Section 11.02(a) or Section 11.02(b) would not be satisfied at the Closing (a “ Terminating Company Breach ”), except that, if such Terminating Company Breach is curable by the Company, Holdings, Delaware Merger Sub or Jersey Merger Sub through the exercise of its commercially reasonable efforts, then, for a period of up to 30 days (or any shorter period of the time that remains between the date Acquiror provides written notice of such violation or breach and the Termination Date) after receipt by the Company of notice from Acquiror of such breach, but only as long as the Company, Holdings, Delaware Merger Sub or Jersey Merger Sub continues to use its commercially reasonable efforts to cure such Terminating Company Breach (the “ Company Cure Period ”), such termination shall not be effective, and such termination shall become effective only if the Terminating Company Breach is not cured within the Company Cure Period, (ii) the Closing has not occurred on or before July 31, 2019 (the “ Termination Date ”), or (iii) the consummation of the Delaware Merger or the Jersey Merger is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental Order or a statute, rule or regulation; provided , that the right to terminate this Agreement under subsection (ii) or (iii) shall not be available if Acquiror’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date;
(c) prior to the Closing, by written notice to Acquiror from the Company if  (i) there is any breach of any representation, warranty, covenant or agreement on the part of Acquiror set forth in this Agreement, such that the conditions specified in Section 11.03(a) , Section 11.03(b) or Section 11.03(c) would not be satisfied at the Closing (a “ Terminating Acquiror Breach ”), except that, if any such Terminating Acquiror Breach is curable by Acquiror through the exercise of its commercially reasonable efforts, then, for a period of up to 30 days (or any shorter period of the time that remains between the date the Company provides written notice of such violation or breach and the Termination Date) after receipt by Acquiror of notice from the Company of such breach, but only as long as Acquiror continues to exercise such commercially reasonable efforts to cure such Terminating Acquiror Breach (the “ Acquiror Cure Period ”), such termination shall not be effective, and such termination shall become effective only if the Terminating Acquiror Breach is not cured within the Acquiror Cure Period, (ii) the Closing has not occurred on or before the Termination Date, or (iii) the consummation of the Delaware Merger or the Jersey Merger is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental Order or a statute, rule or regulation; provided , that the right to terminate this Agreement under subsection (ii) or (iii) shall not be available if the Company’s, Holdings’, Delaware Merger Sub’s or Jersey Merger Sub’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date;
(d) by written notice from either the Company or Acquiror to the other if the Acquiror Stockholder Approval is not obtained at the Special Meeting (subject to any adjournment or recess of the meeting); or
(e) by written notice from the Acquiror if, within two days from the date of this Agreement, (i) the shareholder approval of each of the Company and Jersey Merger Sub to the Jersey Merger is not obtained or (ii) the adoption of this Agreement by Holdings in its capacity as the sole stockholder of the Delaware Merger Sub is not obtained.
12.02 Effect of Termination . Except as otherwise set forth in this Section 12.02 or Section 13.14 , in the event of the termination of this Agreement pursuant to Section 12.01 , this Agreement shall forthwith become void and have no effect, without any liability on the part of any party hereto or its respective Affiliates, officers, directors, employees or stockholders, other than liability of any party hereto for any intentional and willful breach of this Agreement by such party occurring prior to such termination. The provisions of Sections 8.06 , 10.05 , 12.02 , 13.02 , 13.03 , 13.04 , 13.05 , 13.06 , 13.07 , 13.08 , 13.09 , 13.13 , 13.15
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and 13.17 (collectively, the “ Surviving Provisions ”) and the Confidentiality Agreement, and any other Section or Article of this Agreement referenced in the Surviving Provisions which are required to survive in order to give appropriate effect to the Surviving Provisions, shall in each case survive any termination of this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.01 Waiver . Any party to this Agreement may, at any time prior to the Closing, by action taken by its board of directors, or officers thereunto duly authorized, waive any of the terms or conditions of this Agreement or agree to an amendment or modification to this Agreement in the manner contemplated by Section 13.10 and by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement.
13.02 Notices . All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service) or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
(a)
If to Acquiror, to:
640 Fifth Avenue, 12th Floor
New York, NY 10019
Attn: Peter Phelan
E-mail: peter.phelan@mkleinandcompany.com
with a copy to:
Blank Rome LLP
405 Lexington Avenue
New York, NY 10174
Attn: Robert Mittman and Kathleen Cunningham
E-mail: rmittman@blankrome.com and kcunningham@blankrome.com
(b) If to the Company, Holdings, Delaware Merger Sub, the Surviving Delaware Company, Jersey Merger Sub or the Surviving Jersey Company, to:
c/o Clarivate Analytics
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom
Attn: Stephen Hartman
E-mail: stephen.hartman@clarivate.com
with a copy to:
Latham & Watkins LLP
555 Eleventh Street, N.W.
Washington, DC 20004
Attn: Paul Sheridan and Shaun Hartley
E-mail: paul.sheridan@lw.com and shaun.hartley@lw.com
or to such other address or addresses as the parties may from time to time designate in writing. Notwithstanding anything to the contrary, for purposes of obtaining Acquiror’s prior written consent pursuant to Section 8.01 , an email from either Jerre Stead or Michael Klein expressly consenting to the matter or action in question will suffice.
13.03 Assignment . No party hereto shall assign this Agreement or any part hereof without the prior written consent of the other parties; provided , that the Company, Holdings, Delaware Merger Sub and/or Jersey Merger Sub may assign this Agreement and its rights hereunder without the prior written consent of
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Acquiror to any of the financing sources of the Company, Holdings, Delaware Merger Sub and/or Jersey Merger Sub to the extent necessary for purposes of creating a security interest herein or otherwise assigning as collateral in respect of any debt financing in connection herewith; provided further , that the Company, Holdings, Delaware Merger Sub and/or Jersey Merger Sub may delegate the performance of its obligations or assign its rights hereunder in part or in whole to any Affiliate of the Company, Holdings, Delaware Merger Sub or Jersey Merger Sub, as applicable, so long as the Company, Holdings, Delaware Merger Sub and Jersey Merger Sub remain fully responsible for the performance of the delegated obligations. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this Section 13.03 shall be null and void, ab initio .
13.04 Rights of Third Parties . Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the parties hereto, any right or remedies under or by reason of this Agreement; provided , however , that, notwithstanding the foregoing (a) in the event the Closing occurs, the present and former officers and directors of the Company and Acquiror (and their successors, heirs and representatives) are intended third-party beneficiaries of, and may enforce, Section 9.02 and (b) the past, present and future directors, officers, employees, incorporators, members, partners, stockholders, Affiliates, agents, attorneys, advisors and representatives of the parties, and any Affiliate of any of the foregoing (and their successors, heirs and representatives), are intended third-party beneficiaries of, and may enforce, Sections 13.15 and 13.16 .
13.05 Expenses . Except as otherwise provided herein (including Section 4.07 , Section 9.01(e) , Section 10.04(a) and Section 12.02 ), each party hereto shall bear its own expenses incurred in connection with this Agreement and the transactions herein contemplated whether or not such transactions shall be consummated, including all fees of its legal counsel, financial advisers and accountants.
13.06 Governing Law . This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction, except that the Jersey Merger shall be governed by the Jersey Companies Law.
13.07 Captions; Counterparts . The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
13.08 Schedules and Exhibits . The Schedules and Exhibits referenced herein are a part of this Agreement as if fully set forth herein. All references herein to Schedules and Exhibits shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a party in the Schedules with reference to any section or schedule of this Agreement shall be deemed to be a disclosure with respect to all other sections or schedules to which such disclosure may apply solely to the extent the relevance of such disclosure is reasonably apparent on the face of the disclosure in such Schedule. Certain information set forth in the Schedules is included solely for informational purposes.
13.09 Entire Agreement . This Agreement (together with the Schedules and Exhibits to this Agreement) and that certain Letter Agreement, dated as of October 17, 2018, by and between Onex Partners Manager LP and Acquiror (the “ Confidentiality Agreement ”), constitute the entire agreement among the parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries relating to the transactions contemplated hereby. No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the transactions contemplated by this Agreement exist between the parties except as expressly set forth or referenced in this Agreement and the Confidentiality Agreement.
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13.10 Amendments . This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed in the same manner as this Agreement and which makes reference to this Agreement. The approval of this Agreement by the stockholders of any of the parties shall not restrict the ability of the board of directors of any of the parties to terminate this Agreement in accordance with Section 12.01 or to cause such party to enter into an amendment to this Agreement pursuant to this Section 13.10 .
13.11 [Intentionally Omitted] .
13.12 Severability . If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
13.13 Jurisdiction; WAIVER OF TRIAL BY JURY . Any Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 13.13. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
13.14 Enforcement . The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (a) the parties shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, without proof of damages, prior to the valid termination of this Agreement in accordance with Section 12.01 , this being in addition to any other remedy to which they are entitled under this Agreement, and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of the parties would have entered into this Agreement. Each party agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other parties have an adequate remedy at Law or that an award of specific performance is not an appropriate remedy for any reason at Law or equity. The parties acknowledge and agree that any party seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section shall not be required to provide any bond or other security in connection with any such injunction.
13.15 Non-Recourse . This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. Except to the extent a named party to this Agreement (and then only to the extent of the specific obligations undertaken by such named party in this Agreement), (a) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any named party to this Agreement and (b) no past, present or future director, officer, employee, incorporator, member, partner,
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stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Company, Acquiror, Holdings, Jersey Merger Sub or Delaware Merger Sub under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
13.16 Nonsurvival of Representations, Warranties and Covenants . None of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and shall terminate and expire upon the occurrence of the Delaware Merger Effective Time (and there shall be no liability after the Closing in respect thereof), except for (a) those covenants and agreements contained herein that by their terms expressly apply in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing and (b) this Article XIII .
13.17 Acknowledgements .
(a) Each of the parties acknowledges and agrees (on its own behalf and on behalf of its respective Affiliates and its and their respective Representatives) that: (i) it has conducted its own independent investigation of the financial condition, results of operations, assets, liabilities, properties and projected operations of the other parties (and their respective Subsidiaries) and has been afforded satisfactory access to the books and records, facilities and personnel of the other parties (and their respective Subsidiaries) for purposes of conducting such investigation; (ii) the Company Representations constitute the sole and exclusive representations and warranties of the Company in connection with the transactions contemplated hereby; (iii) the Holdings Representations constitute the sole and exclusive representations and warranties of Holdings, Jersey Merger Sub and Delaware Merger Sub in connection with the transactions contemplated by this Agreement; (iv) the Acquiror Representations constitute the sole and exclusive representations and warranties of Acquiror; (v) except for the Company Representations by the Company, the Holdings Representations by Holdings, Jersey Merger Sub and Delaware Merger Sub and the Acquiror Representations by Acquiror, none of the parties hereto or any other Person makes, or has made, any other express or implied representation or warranty with respect to any party hereto (or any party’s Subsidiaries) or the transactions contemplated by this Agreement and all other representations and warranties of any kind or nature expressed or implied (including (x) regarding the completeness or accuracy of, or any omission to state or to disclose, any information, including in the estimates, projections or forecasts or any other information, document or material provided to or made available to any party hereto or their respective Affiliates or Representatives in certain “data rooms,” management presentations or in any other form in expectation of the Transactions, including meetings, calls or correspondence with management of any party hereto (or any party’s Subsidiaries), and (y) any relating to the future or historical business, condition (financial or otherwise), results of operations, prospects, assets or liabilities of any party hereto (or its Subsidiaries), or the quality, quantity or condition of any party’s or its Subsidiaries’ assets) are specifically disclaimed by all parties hereto and their respective Subsidiaries and all other Persons (including the Representatives and Affiliates of any party hereto or its Subsidiaries); and (vi) each party hereto and its respective Affiliates are not relying on any representations and warranties in connection with the Transactions except the Company Representations by the Company, the Holdings Representations by Holdings, Jersey Merger Sub and Delaware Merger Sub and the Acquiror Representations by Acquiror.
(b) Effective upon Closing, each of the parties hereto waives, on its own behalf and on behalf of its respective Affiliates and Representatives, to the fullest extent permitted under applicable Law, any and all rights, Claims and causes of action it may have against any other party hereto or their respective Subsidiaries and any of their respective current or former Affiliates or Representatives relating to the operation of any party hereto or its Subsidiaries or their respective businesses or relating to the subject matter of this Agreement, the Schedules, or the Exhibits to this Agreement, whether arising under or based upon any federal, state, local or foreign statute, Law, ordinance, rule or regulation or otherwise. Each party hereto acknowledges and agrees that it will not assert, institute or maintain any Action, suit, Claim, investigation, or proceeding of any kind whatsoever, including a
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counterclaim, cross-claim, or defense, regardless of the legal or equitable theory under which such liability or obligation may be sought to be imposed, that makes any claim contrary to the agreements and covenants set forth in this Section 13.17 . Notwithstanding anything herein to the contrary, nothing in this Section 13.17(b) shall preclude any party from seeking any remedy for actual and intentional fraud by a party hereto solely and exclusively with respect to the making of any representation or warranty by it in Article V , Article VI or Article VII (as applicable). Each party hereto shall have the right to enforce this Section 13.17 on behalf of any Person that would be benefitted or protected by this Section 13.17 if they were a party hereto. The foregoing agreements, acknowledgements, disclaimers and waivers are irrevocable. For the avoidance of doubt, nothing in this Section 13.17 shall limit, modify, restrict or operate as a waiver with respect to, any rights any party hereto may have under any written agreement entered into in connection with the transactions that are contemplated by this Agreement, including the Nominating Agreement, the Shareholders Agreement, the Sponsor Agreement and the Registration Rights Agreement.
[Signature pages follow.]
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IN WITNESS WHEREOF the parties have hereunto caused this Agreement to be duly executed as of the date hereof.
CHURCHILL CAPITAL CORP
By:   
/s/ Jerre Stead
Name: Jerre Stead
Title:  Chief Executive Officer
[Signature page to Merger Agreement]
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CLARIVATE ANALYTICS PLC
By:   
/s/ Paul Edwards
Name: Paul Edwards
Title:  Director
CAMELOT HOLDINGS (JERSEY) LIMITED
By:    
/s/ Paul Edwards
Name: Paul Edwards
Title: Director
CCC MERGER SUB, INC.
By:   
/s/ Konstantin Gilis
Name: Konstantin Gilis
Title:  President
CAMELOT MERGER SUB (JERSEY) LIMITED
By:   
/s/ Paul Edwards
Name: Paul Edwards
Title: Director
[Signature page to Merger Agreement]
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Exhibit A
Final​
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of  [·], 2019, is made and entered into by and among Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), Churchill Capital Corp, a Delaware corporation (“ Acquiror ”), Churchill Sponsor LLC, a Delaware limited liability company (the “ Sponsor ”), and the undersigned parties listed under Holder on the signature page hereto (each such party, together with the Sponsor and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 8.2 of this Agreement, a “ Holder ” and collectively the “ Holders ”).
RECITALS
WHEREAS , the Company, Acquiror, Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey, CCC Merger Sub, Inc., a Delaware corporation, and Camelot Merger Sub (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey, are party to that certain Agreement and Plan of Merger, dated January 14, 2019 (the “ Merger Agreement ”);
WHEREAS , as a result of the consummation of the transactions contemplated by the Merger Agreement, the Holders will hold Company Shares (as defined below) and/or warrants to purchase Company Shares;
WHEREAS , Acquiror and certain of the Sponsor Holders (as defined below) are a party to a Registration Rights Agreement, dated as of September 6, 2018 (the “ Prior Agreement ”); and
WHEREAS , in connection with the consummation of the transactions contemplated by the Merger Agreement, Acquiror and the Sponsor Holders desire to amend and restate the Prior Agreement in its entirety as set forth herein, and the Company and the Holders (other than the Sponsor Holders) desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW , THEREFORE , in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Article I.
DEFINITIONS
1.1 Definitions . The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
Acquiror ” shall have the meaning given in the Preamble.
Adverse Disclosure ” shall mean public disclosure of material non-public information which, in the Board’s good faith judgment, after consultation with independent outside counsel to the Company, (i) would be required to be made in any Registration Statement filed with the SEC by the Company so that such Registration Statement would not be materially misleading, (ii) would not be required to be made at such time but for the filing of such Registration Statement and (iii) the Company has a bona fide business purpose for not disclosing publicly.
Affiliate ” shall mean, with respect to any specified Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such specified Person. As used in this definition, the term “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. “Affiliates” with respect to the Onex Shareholders and the Baring Shareholders, respectively, shall not include the Company or its Subsidiaries.
Agreement ” shall have the meaning given in the Preamble.
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Automatic Shelf Registration Statement ” shall have the meaning specified in Section 3.1 .
Baring Shareholders ” shall have the meaning specified in the Shareholders Agreement.
Blue Sky ” shall mean state securities regulation and requirements.
Board ” shall mean the Board of Directors of the Company.
Company ” shall have the meaning given in the Preamble.
Company Shares ” shall mean the ordinary shares of no par value in the capital of the Company and any shares or other securities into or for which such shares are hereafter converted or exchanged.
Demand Notice ” shall have the meaning specified in Section 2.1.6 .
Demand Period ” shall have the meaning specified in Section 2.1.5 .
Demand Registration ” shall have the meaning specified in Section 2.1.1 .
Demand Registration Statement ” shall have the meaning specified in Section 2.1.1 .
Demand Suspension ” shall have the meaning specified in Section 2.1.8 .
Exchange Act ” shall mean the U.S. Securities Exchange Act of 1934, as amended, or any similar federal statute then in effect, and a reference to a particular section thereof shall include a reference to the comparable section, if any, of such similar federal statute and the rules and regulations thereunder.
FINRA ” shall mean the Financial Industry Regulatory Authority, Inc.
Founder Shares Lock-up Period ” shall have the meaning specified in the Sponsor Agreement.
Holders ” shall have the meaning given in the Preamble.
Investor Shareholders ” shall have the meaning specified in the Shareholders Agreement.
Investor Shareholder Lock-up Period ” shall mean the period commencing on the date hereof and ending on the one hundred eightieth (180 th ) day after the date hereof.
Loss ” shall have the meaning specified in Section 6.1 .
Management Shareholders ” shall have the meaning specified in the Shareholders Agreement.
Merger Agreement ” shall have the meaning given in the Recitals hereto.
Onex Shareholders ” shall have the meaning specified in the Shareholders Agreement.
Permitted Transferees ” shall mean (a) in the case of any Sponsor Holder, any permitted transferee as provided in paragraph 7(c) of the Sponsor Agreement, (b) in the case of any Holder (other than any Sponsor Holder) that is not an individual, any Affiliate of such Holder (including existing affiliated investment funds or vehicles that at all times remain Affiliates) and (c) in the case of any Holder (other than any Sponsor Holder) who is an individual, (i) any successor by death or (ii) any trust, partnership, limited liability company or similar entity solely for the benefit of such individual or such individual’s spouse or lineal descendants, provided that such individual acts as trustee, general partner or managing member and retains the sole power to direct the voting and disposition of the transferred Company Shares.
Piggyback Registration ” shall have the meaning specified in Section 2.2.1 .
Preemption Notice ” shall have the meaning specified in Section 2.1.7 .
Prior Agreement ” shall have the meaning given in the Recitals hereto.
Prospectus ” shall mean the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post effective amendments, and all other material incorporated by reference in such prospectus.
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Public Offering ” shall mean a public offering and sale of Company Shares pursuant to an effective Registration Statement under the Securities Act.
Registrable Securities ” shall mean (a) all Company Shares owned of record by the Holders and (b) warrants to purchase Company Shares held by the Holders (including any Company Shares issued or issuable upon the exercise of any such warrant); provided , however , that only the Company Shares and warrants to purchase Company Shares, in each case, held by the Sponsor Holders that have vested in accordance with the terms of paragraph 7(d) of the Sponsor Agreement shall be deemed Registrable Securities, except (x) with respect to such Company Shares subject only to time-based vesting under paragraph 7(d) of the Sponsor Agreement, such Company Shares shall be deemed Registrable Securities if such Company Shares will vest within sixty (60) days of the effective date of the applicable Registration Statement and (y) with respect to Company Shares and warrants to purchase Company Shares subject to performance vesting under paragraph 7(d) of the Sponsor Agreement, such Company Shares and warrants to purchase Company Shares shall be deemed Registrable Securities if the Company, upon the written request of the Sponsor Representative, reasonably determines that such Company Shares or warrants to purchase Company Shares are reasonably likely to vest within sixty (60) days of the effective date of the applicable Registration Statement; provided , further , that no such Company Shares or warrants to purchase Company Shares may be sold under any Registration Statement until such Company Shares or warrants to purchase Company Shares shall have vested in accordance with the terms of paragraph 7(d) of the Sponsor Agreement. As to any particular Registrable Securities that have been issued, such securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of under such Registration Statement, (ii) in the case of such securities held by the Investor Shareholders or the Sponsor Holders, they shall have been distributed to the public pursuant to Rule 144 under the Securities Act (or any similar rule that may be adopted by the SEC), (iii) in the case of such securities held by the Management Shareholders, they shall have become eligible for distribution to the public pursuant to Rule 144 under the Securities Act (or any similar rule that may be adopted by the SEC), or (iv) they shall have ceased to be outstanding.
Registration ” shall mean the registration of securities with the SEC pursuant to a Registration Statement.
Registration Expenses ” shall have the meaning specified in Section 5.1 .
Registration Statement ” shall mean any registration statement of the Company filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits to and all material incorporated by reference in such registration statement other than a registration statement (and related Prospectus) filed on Form S-8 or any successor form thereto.
SEC ” shall mean the U.S. Securities and Exchange Commission.
Securities Act ” shall mean the U.S. Securities Act of 1933, as amended, or any similar federal statute then in effect, and in reference to a particular section thereof shall include a reference to the comparable section, if any, of any such similar federal statute and the rules and regulations thereunder.
Shareholders Agreement ” shall mean the Amended and Restated Shareholders Agreement of the Company, dated as of January 14, 2019, by and among the Company, the Onex Shareholders, the Baring Shareholders, and the other Persons party thereto from time to time, as the same may be amended, restated or modified from time to time.
Shelf Period ” shall have the meaning specified in Section 2.1.5 .
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Shelf Registration Statement ” shall mean a Registration Statement filed with the SEC on either (a) Form S-3 or Form F-3 (or any successor form or other appropriate form under the Securities Act) or (b) if the Company is not permitted to file a Registration Statement on Form S-3 or Form F-3, an evergreen Registration Statement on Form S-1 or Form F-1 (or any successor form or other appropriate form under the Securities Act), in each case, for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC) covering the Registrable Securities, as applicable.
Shelf Takedown Notice ” shall have the meaning specified in Section 2.1.6 .
Shelf Takedown Request ” shall have the meaning specified in Section 2.1.2(a) .
Sponsor ” shall have the meaning given in the Preamble hereto.
Sponsor Agreement ” means the Sponsor Agreement, dated as of January 14, 2019, by and among the Company, Acquiror, the Sponsor Holders and the other parties thereto, as the same may be amended, restated or modified from time to time.
Sponsor Holders ” means the Sponsor, Garden State Capital Partners LLC, M. Klein Associates, Inc., Michael S. Klein, Martin Broughton, Balakrishnan S. Iyer, Karen G. Mills, Sheryl von Blucher, Jerre Stead, the Iyer Family Trust dated 1/25/2001, Mills Family I, LLC, K&BM LP and JMJS Group – II, LP.
Sponsor Representative ” means (a) Jerre Stead or (b) following the death of Jerre Stead, the disqualification, resignation or removal of Jerre Stead as a director of the Company or the date on which Jerre Stead no longer beneficially owns any Company Shares, (i) Michael Klein or (ii) if Michael Klein has died, been disqualified, resigned or removed as a director of the Company or no longer beneficially owns any Company Shares, then the Person selected by the Sponsor Holders then holding a majority of the Company Shares held by the Sponsor Holders and reasonably acceptable to the Investor Shareholders. “Beneficially owns” for purposes of this definition shall include securities held by Churchill Sponsor LLC for the benefit of a Sponsor Holder other than Sponsor.
Subsidiary ” shall mean, with respect to any specified Person, any other Person of which (a) a majority of shares of stock or other equity or economic interests are owned or controlled, directly or indirectly, through one or more intermediaries, by such specified Person or (b) the outstanding shares of stock or other equity interests having voting power at such time to elect a majority of the board of directors or other comparable governing body of such Person, or to otherwise control such Person, are at the time owned or controlled by, directly or indirectly, one or more intermediaries, or both, by such specified Person.
Underwritten Offering ” shall mean a Public Offering in which Company Shares are sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public.
Underwritten Shelf Takedown ” means an underwritten Public Offering pursuant to an effective Shelf Registration Statement.
WKSI ” shall have the meaning specified in Section 3.1 .
Article II.
REGISTRATIONS
2.1 Demand Registrations .
2.1.1 Demand by Holders . At any time and from time to time, any Investor Shareholder or the Sponsor Representative, on behalf of the Sponsor Holders, may make a written request to the Company for Registration of Registrable Securities held by such Investor Shareholder or the Sponsor Holders, as applicable, and any other Holders of Registrable Securities; provided, that the Baring Shareholders, collectively, may only make three (3) such written requests; provided, further that (x) for so long as the Investor Shareholders beneficially own, in the aggregate, at least two hundred thousand (200,000) Company Shares, the Sponsor Representative may only make one (1) such written request and only if the Company is eligible to file a Registration Statement on Form S-3 or Form F-3 at the time of such written request and (y) after such time as the Investor Shareholders cease to beneficially own, in the aggregate, at least two hundred thousand (200,000) Company Shares, the Sponsor
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Representative may only make three (3) such written requests (including any such request pursuant to the foregoing clause (x)). Any such requested Registration shall hereinafter be referred to as a “ Demand Registration .” Any Demand Registration may request that the Company register Registrable Securities on an appropriate form, including a Shelf Registration Statement and, if the Company is a WKSI, an automatic shelf registration statement. The Company shall promptly provide to the Investor Shareholders or the Sponsor Representative, as applicable, the information necessary to determine the Company’s status as a WKSI upon reasonable request. Each request for a Demand Registration shall specify the aggregate number of Registrable Securities to be registered. As soon as reasonably practicable following a request for a Demand Registration, the Company shall file a Registration Statement relating to such Demand Registration (a “ Demand Registration Statement ”), and shall use its reasonable best efforts to cause such Demand Registration Statement to promptly be declared effective under the Securities Act.
2.1.2 Shelf Takedown .
(a) At any time the Company has an effective Shelf Registration Statement with respect to an Investor Shareholder’s Registrable Securities, by notice to the Company, an Investor Shareholder may make a written request (a “ Shelf Takedown Request ”) to the Company to effect a Public Offering, including an Underwritten Shelf Takedown, of all or a portion of such Investor Shareholder’s Registrable Securities that may be registered under such Shelf Registration Statement, and as soon as practicable the Company shall amend or supplement the Shelf Registration Statement as necessary for such purpose.
(b) At any time the Company has an effective Shelf Registration Statement with respect to a Sponsor Holder’s Registrable Securities, by at least seven (7) business days’ advance written notice to the Company and the Investor Shareholders, the Sponsor Representative may make a Shelf Takedown Request to the Company to effect a Public Offering, including an Underwritten Shelf Takedown, of all or a portion of such Sponsor Holder’s Registrable Securities that may be registered under such Shelf Registration Statement, and as soon as practicable the Company shall amend or supplement the Shelf Registration Statement as necessary for such purpose, in each case, unless, within four (4) business days of receipt of such notice, an Investor Shareholder delivers a Shelf Takedown Request to the Company, in which case, the Sponsor Representative’s Shelf Takedown Request shall be automatically withdrawn and Section 2.1.6 shall apply with respect to the Investor Shareholder’s Shelf Takedown Request.
2.1.3 Limitation on Demand Registration and Underwritten Shelf Takedowns . The Company shall not be obligated to (x) file a Demand Registration Statement under this Section 2.1 unless the aggregate purchase price of the Registrable Securities to be included in the requested Registration (determined by reference to the offering price on the cover of the registration statement proposed to be filed, or, in the case of a Shelf Registration Statement, reasonably expected to be sold pursuant thereto from time to time) is greater than $100,000,000 (or, in the case of a Demand Registration initiated by the Sponsor Representative, either (i) $75,000,000 or (ii) 7,500,000 Company Shares), or (y) effect any Underwritten Shelf Takedown unless the aggregate purchase price of the Registrable Securities to be sold is greater than $50,000,000 (or, in the case of a Demand Registration initiated by the Sponsor Representative, either (i) $50,000,000 or (ii) 5,000,000 Company Shares).
2.1.4 Demand Withdrawal . Any Holder may withdraw its Registrable Securities from a Demand Registration at any time prior to the effectiveness of the applicable Demand Registration Statement. Upon receipt of notices from the Investor Shareholder(s) or the Sponsor Representative, as applicable, requesting a withdrawal of its Registrable Securities from a Demand Registration, the Company shall cease all efforts to secure effectiveness of the applicable Demand Registration Statement unless otherwise requested by the Onex Shareholders to the extent an Onex Shareholder has Registrable Securities in such Demand Registration; provided that, if the Baring Shareholder or the Sponsor Representative, as applicable, requests such withdrawal, and the Onex Shareholders request that such withdrawal not be effected, then (x) the withdrawing Baring Shareholder or the Sponsor Holders, as applicable, shall not be required to continue participating in such Demand Registration and (y) such Demand Registration will not count as one of the Baring Shareholders’ or the Sponsor
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 Representative’s, as applicable, Demand Registrations. Any Demand Registration initiated by the Baring Shareholder or the Sponsor Representative that is withdrawn by such initiating shareholder in accordance with this Section 2.1.4 due to adverse market conditions shall not be considered a request for a Demand Registration by such party under Section 2.1.1 .
2.1.5 Effective Registration . A registration request pursuant to Section 2.1.1 shall not be deemed a Demand Registration unless the Demand Registration Statement is declared effective by the SEC and remains effective for not less than 180 days (or such shorter period when all Registrable Securities covered by such Demand Registration Statement have been sold), or if such Registration Statement relates to an Underwritten Offering, then such longer period as in the opinion of counsel for the underwriter or underwriters a Prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer (the applicable period, the “ Demand Period ”). No Demand Registration shall be deemed to have been effected if  (a) during the Demand Period such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court or (b) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied other than by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement by a participating Holder. The Company shall use its reasonable best efforts to keep any Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming part of the Shelf Registration Statement to be usable by Holders until the earlier of: (i) the date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement or another Registration Statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder); and (ii) the date as of which no Holder holds Registrable Securities (such period of effectiveness, the “ Shelf Period ”).
2.1.6 Demand Notice . Promptly upon receipt of any request for a Demand Registration pursuant to Section 2.1.1 (other than in connection with an Underwritten Offering effected pursuant to a Shelf Registration Statement) but in no event more than two (2) business days thereafter, the Company shall deliver a written notice (a “ Demand Notice ”) of such Demand Registration request to all Holders of Registrable Securities, and the Company shall include in such Demand Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within three (3) business days after the date that the Demand Notice has been delivered. Promptly upon receipt of any Shelf Takedown Request for an Underwritten Shelf Takedown, but in no event more than two (2) business days thereafter (or such shorter period as may be reasonably requested in connection with an underwritten “block trade”), the Company shall deliver a written notice (a “ Shelf Takedown Notice ”) of such Shelf Takedown Request to all Holders of Registrable Securities registered pursuant to such Shelf Registration Statement (other than to Management Shareholders), and the Company shall include in such Underwritten Shelf Takedown all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within two (2) business days (or such shorter period as may be reasonably requested in connection with an underwritten “block trade”) after the date that the Shelf Takedown Notice has been delivered.
2.1.7 Preemption . If not more than thirty (30) days prior to receipt of any request for a Demand Registration pursuant to Section 2.1.1 , the Company shall have (a) circulated to prospective underwriters and their counsel a draft of a Registration Statement for a primary offering of equity securities on behalf of the Company, (b) solicited bids for a primary offering of Company Shares or (c) otherwise reached an understanding with an underwriter with respect to a primary offering of Company Shares, the Company may preempt the Demand Registration with such primary offering by delivering written notice of such intention (the “ Preemption Notice ”) to the Holders making a request for a Demand Registration within five (5) days after the Company has received the request. The period of preemption may be up to forty-five (45) days following the date of the Preemption Notice or such longer period as the Company is subject to a lock-up pursuant to Section 7.3 . Notwithstanding anything to the contrary herein, the Company shall not be entitled to exercise its right to preempt a Demand Registration pursuant to this Section 2.1.7 more than once during any 12 month period.
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2.1.8 Delay in Filing; Suspension of Registration . If the filing, initial effectiveness or continued use of a Demand Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, the Demand Registration Statement (a “ Demand Suspension ”); provided , however , that the Company shall not be permitted to exercise a Demand Suspension (a) more than once during any twelve (12) month period or (b) for a period exceeding forty-five (45) days. In the case of a Demand Suspension, the Holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders upon the termination of any Demand Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the Holders such numbers of copies of the Prospectus as so amended or supplemented as the Holders may reasonably request. The Company agrees, if necessary, to supplement or make amendments to the Demand Registration Statement, if required by the registration form used by the Company for the Demand Registration or by the instructions applicable to such registration form or by the Securities Act or as may be requested by the Holders of a majority of the Registrable Securities that are included in such Demand Registration Statement.
2.1.9 Underwritten Offering . If the Holders of not less than a majority of the Registrable Securities requesting a Demand Registration so elect, such offering of Registrable Securities shall be in the form of an Underwritten Offering. The Holders initiating the underlying Demand Registration for such Underwritten Offering shall have the right to select the managing underwriter or underwriters to administer the offering; provided , that (i) any such managing underwriter or underwriters shall be reasonably acceptable to the Company and (ii) in the event that an Investor Shareholder is participating in such Underwritten Offering and did not initiate the underlying Demand Registration, such managing underwriter or underwriters shall be reasonably acceptable to the applicable Investor Shareholder, such consent not to be unreasonably withheld, conditioned or delayed.
2.1.10 Priority of Securities Registered Pursuant to Demand Registrations . If the managing underwriter or underwriters of a proposed Underwritten Offering of the Registrable Securities included in a Demand Registration (or, in the case of a Demand Registration not being underwritten, the Holders of a majority of the Registrable Securities included therein) or an Underwritten Shelf Takedown advise the Company in writing (which, for the avoidance of doubt, may be via e-mail) that, in its or their opinion, the number of securities requested to be included in such Demand Registration or Underwritten Shelf Takedown exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the Company will include in such offering, (a) first , the number of Registrable Securities requested by all Holders of Registrable Securities to be included in such offering that, in the opinion of such managing underwriter(s) (or, in the case of a Demand Registration not being underwritten, the Holders of a majority of the Registrable Securities included therein), can be sold without having such significant adverse effect, such amount to be allocated among all such Holders of Registrable Securities pro rata on the basis of the respective number of Registrable Securities then held by each such Holder, (b) second , only if all of the Registrable Securities referred to in clause (a) have been included in such offering, the securities the Company proposes to sell and (c)  third , only if all of the securities referred to in clauses (a) and (b) have been included in such offering, any other securities eligible for inclusion in such Registration.
2.2 Piggyback Registration .
2.2.1 Participation . If the Company proposes to file a Registration Statement under the Securities Act or to conduct a Public Offering with respect to any offering of Company Shares for its own account or for the account of any other Persons (other than (a) a Registration under Section 2.1 , (b) a Registration on Form S-4 or S-8 or any successor form thereto, (c) a Registration of securities solely relating to an offering and sale to employees, directors or consultants of the Company or any of its Subsidiaries pursuant to any benefit or incentive plan or (d) a Registration Statement relating to the registration of Company Shares in connection with a payment under the Tax Receivable Agreement (as defined in the Merger Agreement)), then, as soon as practicable (but in no event less than ten (10) days
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prior to the initial filing of such Registration Statement or, in the case of a Public Offering under a Shelf Registration Statement, three (3) days prior to the anticipated pricing date), the Company shall give written notice of such proposed filing or Public Offering to all Holders of Registrable Securities (other than Management Shareholders in connection with a registration effected pursuant to a Shelf Registration Statement (including any Underwritten Shelf Takedown)), and such notice shall offer such Holders of Registrable Securities the opportunity to register under such Registration Statement, or to sell in such Public Offering, such number of Registrable Securities as each such Holder may request in writing (a “ Piggyback Registration ”). Subject to Section 2.2.2 , the Company shall include in such Registration Statement or in such Public Offering all such Registrable Securities which are requested to be included therein within ten (10) days after the Company has given such notice or, in the case of a Public Offering under a Shelf Registration Statement, one (1) day prior to the pricing date; provided , however , that if at any time after giving written notice of its intention to register or sell any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, the Company shall determine for any reason not to register or sell or to delay Registration of such securities, the Company shall give written notice of such determination to each Holder of Registrable Securities and, thereupon, (i) in the case of a determination not to register or sell, shall be relieved of its obligation to register any Registrable Securities in connection with such Registration or Public Offering (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any Holders under Section 2.1 , and (ii) in the case of a determination to delay registering or selling, in the absence of a request for a Demand Registration or an Underwritten Shelf Takedown, shall be permitted to delay registering or selling any Registrable Securities, for the same period as the delay in registering or selling such other securities. If such Public Offering is to be underwritten, then each Holder making a request for a Piggyback Registration pursuant to this Section 2.2.1 must, and the Company shall make such arrangements with the managing underwriter or underwriters so that each such Holder may, participate in such Underwritten Offering. If the offering pursuant to such Registration Statement is to be on any other basis, then each Holder making a request for a Piggyback Registration pursuant to this Section 2.2.1 must, and the Company shall make such arrangements so that each such Holder may, participate in such offering on such basis. Each Holder of Registrable Securities shall be permitted to withdraw all or part of such Holder’s Registrable Securities from a Piggyback Registration at any time prior to the pricing of such Registration.
2.2.2 Priority of Piggyback Registration . If the managing underwriter or underwriters of any proposed Underwritten Offering of Registrable Securities included in a Piggyback Registration informs the Company in writing (which, for the avoidance of doubt, may be via e-mail) that, in its or their opinion, the number of securities which such Holders and any other Persons intend to include in such offering exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Piggyback Registration shall be (a) first , the number of Registrable Securities that the Company proposes to sell, that, in the opinion of such managing underwriter(s), can be sold without having such significant adverse effect, (b) second , only if all securities referred to in clause (a) have been included in such registration, the number of Registrable Securities requested by all Investor Shareholders to be included in such offering that, in the opinion of such managing underwriter(s), can be sold without having such significant adverse effect, pro rata on the basis of the respective number of Registrable Securities then held by each such Investor Shareholder, (c) third , only if all securities referred to in clauses (a) and (b) have been included in such offering, the number of Registrable Securities requested by all Management Shareholders and Sponsor Holders to be included in such offering that, in the opinion of such managing underwriter(s), can be sold without having such significant adverse effect, pro rata on the basis of the respective number of Registrable Securities then held by each such Management Shareholder and Sponsor Holder and (d)  fourth , only if all securities referred to in clauses (a), (b) and (c) have been included in such Registration, the number of Company Shares that any other Person exercising a contractual right to demand Registration proposes to sell that, in the opinion of such managing underwriter(s), can be sold without having such significant adverse effect, pro rata on the basis of the respective number of Company Shares then held by each such Person.
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2.2.3 No Effect on Demand Registrations or Shelf Takedowns . No Registration of Registrable Securities effected pursuant to this Section 2.2 shall be deemed to have been effected pursuant to Section 2.1 or shall relieve the Company of its obligations under Section 2.1 .
2.3 Restrictions on Registration Rights . Notwithstanding anything to the contrary contained in this Agreement, no Registration Statement shall become effective, (a) with respect to any Registrable Securities held by any Sponsor Holder, until after the expiration of the Founder Shares Lock-up Period, and (b) with respect to any Registrable Securities held by any Investor Shareholder, until after the expiration of the Investor Shareholder Lock-up Period.
Article III.
REGISTRATION PROCEDURES
3.1 General Procedures . In connection with the Company’s Registration obligations under Sections 2.1 and 2.2 , the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall, among other things:
3.1.1 prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or Prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the Holders of the Registrable Securities covered by such Registration Statement, copies of all documents prepared to be filed and (y) except in the case of a Registration under Section 2.2 , not file any Registration Statement or Prospectus or amendments or supplements thereto or any free writing prospectus related thereto to which the Investor Shareholder(s) or the Sponsor Representative, as applicable, requesting a Demand Registration or an Underwritten Shelf Takedown, as applicable, or the underwriters, if any, shall reasonably object;
3.1.2 as soon as reasonably practicable file with the SEC a Registration Statement relating to the Registrable Securities, including all exhibits and financial statements required by the SEC to be filed therewith, and use its reasonable best efforts to cause such Registration Statement to become effective under the Securities Act as soon as practicable thereafter;
3.1.3 prepare and file with the SEC such pre- and post-effective amendments to such Registration Statement and supplements to the Prospectus or any free writing prospectus related thereto as may be (a) reasonably requested by any participating Investor Shareholder, (b) reasonably requested by any participating Holder to the extent such request relates to information relating to such Holder, or (c) necessary to keep such Registration effective for the period of time required by this Agreement, and comply with provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;
3.1.4 notify the participating Holders of Registrable Securities and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing (which, for the avoidance of doubt, may be via e-mail) and provide copies of the relevant documents, as soon as practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable Prospectus or any amendment or supplement to such Prospectus or any free writing prospectus related thereto has been filed and/or used, (b) of any written comments by the SEC or any request by the SEC for amendments or supplements to such Registration Statement or such Prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in all material respects, and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
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3.1.5 promptly notify each selling Holder of Registrable Securities and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the Prospectus included in such Registration Statement (as then in effect) or any free writing prospectus related thereto or the information conveyed to any purchaser at the time of sale to such purchaser contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus, any preliminary Prospectus, any free writing prospectus and any information conveyed to any purchaser at the time of the sale to such purchaser, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or Prospectus, any free writing prospectus related thereto or any information conveyed to any purchaser at the time of the sale to such purchaser in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the selling Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or Prospectus, any free writing prospectus related thereto or any information conveyed to any purchaser at the time of the sale to such purchaser which shall correct such misstatement or omission or effect such compliance;
3.1.6 use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any Registration Statement, preliminary or final Prospectus;
3.1.7 use its reasonable best efforts to incorporate in a Prospectus supplement or post-effective amendment such information as (x) the managing underwriter or underwriters, (y) the participating Investor Shareholder(s) and (z) in the case of a Demand Registration by the Sponsor Representative, the Sponsor Representative agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
3.1.8 furnish to each selling Holder of Registrable Securities and each underwriter, if any, without charge, as many conformed copies as such Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference) and any free writing prospectus utilized in connection therewith;
3.1.9 deliver to each selling Holder of Registrable Securities and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary prospectus) and any amendment or supplement thereto or any free writing prospectus relating thereto as such Holder or underwriter may reasonably request (it being understood that the Company consents to the use of such Prospectus or any amendment or supplement thereto or any free writing prospectus relating thereto by each of the selling Holders of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto) and such other documents as such selling Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter;
3.1.10 on or prior to the date on which the applicable Registration Statement is declared effective, use its reasonable best efforts to register or qualify, and cooperate with the selling Holders of Registrable Securities, the managing underwriter or underwriters, if any, and their respective counsel, in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or Blue Sky laws of each state and other jurisdiction of the United States as any such selling Holder or managing underwriter or underwriters, if any, or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect for such period as required by Section 2.1.5 ;
3.1.11 cooperate with the selling Holders of Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends, and cause such Registrable
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Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in accordance with the instructions of the selling Holders of Registrable Securities at least two (2) business days prior to any sale of Registrable Securities and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof;
3.1.12 use its reasonable best efforts to (a) cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities and (b) keep such registration or qualification in effect for so long as such registration statement remains in effect;
3.1.13 deliver promptly to counsel to the Holders of Registrable Securities and each underwriter, if any, participating in the offering of the Registrable Securities copies of all comment letters from the SEC or its staff with respect to such Registration Statement;
3.1.14 not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates, if applicable, for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company;
3.1.15 make such representations and warranties to the Holders of Registrable Securities being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings;
3.1.16 enter into and perform its obligations under such customary agreements (including underwriting agreements in customary form) and take all such other actions as (x) the participating Investor Shareholder(s), (y) in the case of a Demand Registration by the Sponsor Representative, the Sponsor Representative or (z) the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities;
3.1.17 use its reasonable best efforts to obtain for delivery to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company (including outside counsel) dated the date of the closing(s) under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such underwriters and their respective counsel;
3.1.18 use its reasonable best efforts to, in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, a comfort letter from the Company’s independent certified public accountants (and, if necessary and to the extent that the Company or any business acquired after the date hereof has previously engaged such independent certified public accountants or independent auditors, any other independent certified public accountants or independent auditors of any Subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are required to be included in the Registration Statement) in customary form and covering such matters of the type customarily covered by comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;
3.1.19 use commercially reasonably efforts to cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA or any securities exchange on which such Registrable Securities are traded or will be traded;
3.1.20 use commercially reasonably efforts to, to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter (as such term is defined in FINRA Rule 5121(f)(12));
3.1.21 use its reasonable best efforts to comply with the Securities Act and, if applicable, make available to its securityholders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;
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3.1.22 use its reasonably best efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;
3.1.23 use its reasonable best efforts to cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed or quoted;
3.1.24 subject to appropriate confidentiality arrangements, make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the participating Investor Shareholder(s) or the Sponsor Representative, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such Investor Shareholder(s), Sponsor Representative or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors, employees, agents and representatives to, and use its reasonable best efforts to cause the independent public accountants who have certified its financial statements to, make themselves available to discuss the business of the Company and to supply all information requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility;
3.1.25 in the case of an Underwritten Offering, cause the senior executive officers of the Company and its Subsidiaries to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;
3.1.26 take all reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by Section 2.1 or Section 2.2 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related Prospectus, Prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
3.1.27 in connection with any Underwritten Offering, if at any time the information conveyed to a purchaser at the time of sale to such purchaser includes any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, promptly file with the SEC such amendments or supplements to such information as may be necessary so that the statements as so amended or supplemented will not, in light of the circumstances, be misleading;
3.1.28 provide all such other certificates, letters, opinions and other requested documents customarily provided in public offerings similar to the offering then being undertaken; and
3.1.29 take all such other reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities in accordance with the terms of this Agreement.
To the extent the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) (a “ WKSI ”) at the time any Demand Registration is submitted to the Company, and such Demand Registration requests that the Company file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “ Automatic Shelf Registration Statement ”) on Form S-3 or Form F-3, the Company shall file an Automatic Shelf Registration Statement which covers those Registrable Securities which are requested to be registered by the Investor Shareholders or the Sponsor Representative. If the Company does not pay the filing fee covering the Registrable Securities at the time the Automatic Shelf Registration Statement is filed, the Company agrees to pay such fee at such time or times as the Registrable Securities are to be sold. To the extent required in order to maintain an effective Automatic Shelf Registration Statement covering the Registrable Securities, the Company shall file a new Automatic Shelf Registration Statement covering the Registrable Securities. If at any time when the Company is
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required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its reasonable best efforts to file a new Shelf Registration Statement and keep such Shelf Registration Statement effective during the period during which such registration statement is required to be kept effective.
If the Company files any Shelf Registration Statement for the benefit of the holders of any securities other than the Investor Shareholders, the Company agrees that it shall include in such Shelf Registration Statement such disclosures as may be required by Rule 430B (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Investor Shareholders may be added to such Shelf Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment.
3.2 Obligations of the Holders . The Company may require each seller of Registrable Securities as to which any Registration is being effected to furnish to the Company such information regarding the distribution of such securities and such other information relating to such Holder and its ownership of Registrable Securities as the Company may from time to time reasonably request in writing. Each Holder of Registrable Securities agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.
3.3 Suspension of Use of Prospectus . Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.5 , such Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3.1.5 , or until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 3.1.5 or is advised in writing by the Company that the use of the Prospectus may be resumed.
3.4 Blue Sky Laws . If any such Registration Statement or comparable statement under Blue Sky laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require (a) the insertion therein of language, in form and substance reasonably satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company or (b) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel, required by the Securities Act or any state Blue Sky law then in force, the deletion of the reference to such Holder.
Article IV.
UNDERWRITTEN OFFERINGS
4.1 Demand Registrations . If requested by the underwriters for any Underwritten Offering requested by Holders of Registrable Securities pursuant to Section 2.1 , the Company shall enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Company, the Investor Shareholder(s) requesting such Demand Registration or Underwritten Shelf Takedown and the underwriters, and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including indemnities no less favorable to the recipient thereof than those provided in Article VI . The Holders of the Registrable Securities proposed to be distributed by such underwriters shall cooperate with the Company in the negotiation of such underwriting agreement. Such Holders of Registrable Securities to be distributed by such underwriters shall be parties to such underwriting agreement, which underwriting agreement shall (a) contain such representations and warranties by such Holders of Registrable Securities and such other
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terms as are generally prevailing in agreements of that type, including indemnities, and the aggregate amount of liability of any Holder shall not exceed such Holder’s net proceeds from such Underwritten Offering, and (b) provide that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such Holders of Registrable Securities.
4.2 Piggyback Registrations . If the Company proposes to register any of its securities under the Securities Act as contemplated by Section 2.2 and such securities are to be distributed in an Underwritten Offering through one or more underwriters, the Company shall, if requested by any Holder pursuant to Section 2.2 and subject to the provisions of Section 2.2.2 , use its reasonable best efforts to arrange for such underwriters to include on the same terms and conditions that apply to the other sellers in such Registration, all the Registrable Securities to be offered and sold by such Holder among the securities of the Company to be distributed by such underwriters in such Registration. The Holders of the Registrable Securities to be offered in such Registration shall be parties to the underwriting agreement between the Company and such underwriters, which underwriting agreement shall (a) contain such representations and warranties by such Holders of Registrable Securities and such other terms as are generally prevailing in agreements of that type, including indemnities, and the aggregate amount of liability of any Holder shall not exceed such Holder’s net proceeds from such Underwritten Offering, and (b) provide that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such Holders of Registrable Securities.
4.3 Participation in Underwritten Registrations . Subject to Sections 4.1 and 4.2 , no Person may participate in any Underwritten Offering hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in, and agrees to become a party to, any underwriting arrangements approved by the Persons entitled to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, medallion guarantees, indemnities and other documents required under the terms of such underwriting arrangements or otherwise reasonably requested by the underwriters.
4.4 Price and Underwriting Discounts . In the case of an Underwritten Offering under Section 2.1 , the price, underwriting discount and other financial terms for the Registrable Securities shall be determined by the Holders of a majority of the Registrable Securities included in the Underwritten Offering.
Article V.
REGISTRATION EXPENSES
5.1 Registration Expenses . All expenses incident to the Company’s performance of or compliance with this Agreement, and all reasonable out-of-pocket costs and expenses incurred by the Holders in connection with any registration and sale of Registrable Securities pursuant to this this Agreement (excluding (x) any underwriters’ or brokerage discounts or commissions payable in respect of the sale of Registrable Securities by any Holder and (y) except as set forth in clauses (g) and (h) below, fees and expenses of legal counsel to any Holder) shall be paid by the Company, including (a) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC, FINRA or other applicable governmental entity (including reasonable fees and disbursements of counsel for the underwriters in connection with the FINRA qualification of the Registrable Securities), (b) all fees and expenses in connection with compliance with any securities or Blue Sky laws and determination of the eligibility of the Registrable Securities for investment under the laws of the various jurisdictions (including reasonable fees and disbursements of counsel for the underwriters in connection with Blue Sky qualification of the Registrable Securities), (c) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (d) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incident to such performance) or its Subsidiaries or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement, (e) Securities laws liability insurance or similar insurance if the Company so desires or the underwriters so require in accordance with then-customary underwriting practice, (f) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the
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Registrable Securities on any inter-dealer quotation system, (g) all reasonable fees and disbursements of one law firm or other counsel selected by the Holders of a majority of the Registrable Securities owned by the Onex Shareholders and their Affiliates being registered, one law firm or other counsel selected by the Holders of a majority of the Registrable Securities owned by the Baring Shareholders and their Affiliates being registered and, in the case of a Demand Registration by the Sponsor Representative, one law firm or other counsel selected by the Holders of a majority of the Registrable Securities owned by the Sponsor Holders being registered, and, in the case of a Registration Statement which is not a Demand Registration Statement by the Sponsor Representative, all reasonable fees and disbursements of lead counsel designated by the holders of a majority of the Registrable Securities owned by the Onex Shareholders and their Affiliates or the Baring Shareholders and their Affiliates, as the case may be, (h) all reasonable fees and disbursements of such local or special legal counsel as may reasonably be required by the Holders of a majority of the Registrable Securities participating in such Registration, (i) any reasonable fees and disbursements of underwriters (excluding any underwriters’ or brokerage discounts or commissions payable in respect of the sale of Registrable Securities by any Holder) customarily paid by issuers or sellers of securities, (j) all fees and expenses of any special experts or other Persons retained by the Company in connection with any Registration, (k) fees and expenses of a Qualified Independent Underwriter (as such term is defined in FINRA Rule 5121(f)(12)) and its counsel, if any, (l) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), (m) all expenses incurred in connection with promotional efforts or “roadshows” for any Underwritten Offering, including all travel (including any aircraft chartered for such purpose), meals and lodging, and (n) fees and disbursements of transfer agents, registrars and custodians. All such expenses are referred to herein as “ Registration Expenses ”.
Article VI.
INDEMNIFICATION
6.1 Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each Holder of Registrable Securities, each member, limited or general partner thereof, each member, limited or general partner of each such member, limited or general partner, each of their respective Affiliates, officers, directors, security holders, employees, advisors, and agents and each Person who controls (within the meaning of the Securities Act) such Persons and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses, joint or several (including reasonable costs of investigation and legal expenses) (each, a “ Loss ” and collectively “ Losses ”) arising out of or based upon (a) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or contained in any free writing prospectus utilized in connection therewith or in any information conveyed to any purchaser at the time of the sale to such purchaser, or any other disclosure document produced by or on behalf of the Company or any of its Subsidiaries including, without limitation, reports and other documents filed under the Exchange Act, (b) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus, free writing prospectus related thereto or the information conveyed to any purchaser at the time of the sale to such purchaser, in light of the circumstances under which they were made) not misleading, (c) any actions or inactions or proceedings in respect of the foregoing whether or not such indemnified party is a party thereto or (d) any registration or qualification of securities under Blue Sky laws; provided , however , that the Company shall not be liable to any particular indemnified party to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such Registration Statement or other disclosure document in reliance upon and in conformity with written information furnished to the Company by such indemnified party expressly for use in the preparation thereof. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any indemnified party and shall survive the transfer of such securities by such Holder. The Company shall also indemnify
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underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the indemnified parties.
6.2 Indemnification by the Selling Holder of Registrable Securities . Each selling Holder of Registrable Securities agrees (severally and not jointly) to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act) from and against any Losses resulting from (a) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or contained in any free writing prospectus utilized in connection therewith or (b) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus, free writing prospectus related thereto in light of the circumstances under which they were made) not misleading, in each case, to the extent, but only to the extent, that such untrue statement or omission is contained in any information furnished in writing by such selling holder to the Company specifically for inclusion in such Registration Statement, concerns such selling Holder or its ownership of the securities of the Company and has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the Person asserting the claim. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder under the sale of Registrable Securities giving rise to such indemnification obligation. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above (with appropriate modification) with respect to information furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement.
6.3 Conduct of Indemnification Proceedings . Any Person entitled to indemnification hereunder shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification ( provided , that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure) and (b) permit such indemnifying party to assume the defense of such claim, jointly with any other indemnifying party, with counsel reasonably satisfactory to the indemnified party; provided , however , that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person, (iii) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party or (iv) in the reasonable judgment of any such Person (based upon advice of its counsel) a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If the indemnifying party assumes the defense, the indemnifying party shall not have the right to settle such action without the consent of the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement unless such judgment or settlement (A) includes as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of an unconditional release from all liability in respect to such claim or litigation, (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party and (C) does not require any action (or consent or other restriction on action) other than the payment of money by the indemnifying party. If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent, but such consent may not be unreasonably withheld. It is understood that
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the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements or other charges of more than one separate firm admitted to practice in such jurisdiction at any one time unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties, (y) an indemnified party has reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the other indemnified parties or (z) a conflict or potential conflict exists or may exist (based upon advice of counsel to an indemnified party) between such indemnified party and the other indemnified parties, in each of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.
6.4 Contribution . If for any reason the indemnification provided for in Sections 6.1 and 6.2 is unavailable to an indemnified party or insufficient in respect of any Losses referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss (a) in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party or parties, on the other hand, in connection with the acts, statements or omissions that resulted in such losses or (b) if the allocation provided by clause (a) above is not permitted by applicable law, then such proportion as is appropriate to reflect not only the relative fault referred to in clause (a) above but also the relative benefit of the indemnifying party on the one hand and of the indemnified party or parties on the other in connection with the statement or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits of such parties shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses). In connection with any Registration Statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 6.4 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an indemnified party as a result of the Losses referred to in Sections 6.1 and 6.2 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6.4 , in connection with any Registration Statement filed by the Company, a selling Holder of Registrable Securities shall not be required to contribute any amount in excess of the dollar amount of the net proceeds received by such Holder under the sale of Registrable Securities giving rise to such contribution obligation. If indemnification is available under this Article VI , the indemnifying parties shall indemnify each indemnified party to the fullest extent provided in Sections 6.1 and 6.2 hereof without regard to the provisions of this Section 6.4 . The remedies provided for in this Article VI are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
6.5 Third Party Beneficiaries . The Company and the Holders agree that the other parties indemnified pursuant to this Article VI are express and intended third party beneficiaries of this Article VI .
Article VII.
ADDITIONAL REGISTRATION MATTERS
7.1 Reporting Obligations . The Company covenants that, at its own expense, it will use reasonable best efforts to file timely the reports required to be filed by it under the Exchange Act. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof  (and such Holder shall be entitled to rely upon the accuracy of such written statement).
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7.2 Waiver of Registration Rights . Notwithstanding anything to the contrary in this Agreement, the Onex Shareholders and the Baring Shareholders, acting together, may waive compliance by the Company with any provision of this Agreement with respect to the Management Shareholders, including waiving any obligation to include Registrable Securities held by the Management Shareholders in connection with any offering or Registration.
7.3 Holdback Agreement . If the Company at any time shall register Registrable Securities (including any registration pursuant to the terms hereof) for sale to the public, the Holders (and, in the case of a registration of Registrable Securities pursuant to Section 2.1.1 , the Company) hereby agree, at the request of the Company or any Investor Shareholder or the Sponsor Representative, as applicable, requesting registration of Registrable Securities pursuant to Section 2.1 , (a) not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any Company Shares or other equity securities of the Company, or securities convertible into, exercisable or exchangeable for or that represent the right to receive equity securities of the Company (including any warrants to purchase Company Shares), without the prior written consent of the managing underwriters of such Public Offering, for a period designated by such managing underwriter or, in the case of a registration of Registrable Securities pursuant to Section 2.1 , any Investor Shareholder or the Sponsor Representative, as applicable, requesting such registration, which period shall not last more than 90 days after the effective date of the Registration Statement pursuant to which any Public Offering shall be made, and (b) to enter into agreements regarding the matters set forth in the foregoing clause (a) with such managing underwriters, if any, in connection with any such Public Offering. The Company shall obtain the agreement of any Person permitted to sell shares or any securities convertible into or exchangeable or exercisable for shares in a registration to be bound by and to comply with this Section 7.3 as if such Person was a Holder hereunder.
Article VIII.
MISCELLANEOUS
8.1 Notices . Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or (iii) transmission by electronic mail. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery or electronic mail, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed as follows:
If to the Company, to:
c/o Clarivate Analytics
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom
Attention: Stephen Hartman
E-mail: stephen.hartman@lw.com
with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
555 Eleventh Street, N.W.
Washington, DC 20004
Attention: Paul Sheridan and Shaun Hartley
E-mail: paul.sheridan@lw.com and shaun.hartley@lw.com

If to any Holder, at such Holder’s address as set forth in the Company’s books and records.
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Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 8.1 .
8.2 Assignment; No Third Party Beneficiaries .
8.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
8.2.2 No Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the provisions of this Agreement.
8.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders.
8.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 6.5 hereof.
8.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 8.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 8.2 shall be null and void.
8.3 Counterparts . This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
8.4 Choice of Law; Remedies; Submission to Jurisdiction; Waiver of Jury Trial . To the greatest extent permitted by Jersey law, this Agreement and any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of such state or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Delaware.
EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF FORUM SET FORTH IN THIS SECTION BELOW SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OF A COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION BELOW, OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT, IN ANY OTHER APPROPRIATE JURISDICTION.
IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (A) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY SUCH LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE LOCATED IN WILMINGTON, DELAWARE, OR, IF UNDER APPLICABLE LAW EXCLUSIVE JURISDICTION IS VESTED IN THE U.S. FEDERAL COURTS, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE (AND APPELLATE COURTS THEREOF); (B) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION,
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SUCH PARTIES WILL CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE); (C) AGREE TO WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT FORUM; (D) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT; (E) AGREE TO SERVICE OF PROCESS IN ANY SUCH LITIGATION, PROCEEDING OR ACTION BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (F) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (G) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
8.5 Amendments and Modifications . This Agreement may be amended only by a written instrument duly executed by the Company and the Investor Shareholders (but only for so long as any Investor Shareholder holds any Company Shares); provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected; provided, further, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects any Sponsor Holder, solely in his, her or its capacity as a holder of the shares of capital stock of the Company, shall require the consent of the Sponsor Representative. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
8.6 Other Registration Rights . The Company is not currently a party to, and the Company shall not hereafter enter into, any agreement with respect to its securities that is inconsistent with, or more favorable to a third party than, the rights granted to the Holders by this Agreement.
8.7 Term . This Agreement shall terminate upon the first date as of which (a) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the SEC)) or (b) the Holders of all Registrable Securities are permitted to sell the Registrable Securities under Rule 144 (or any similar provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale. The provisions of this Article VIII (other than Section 8.6 ) and Article VI shall survive any termination.
[Signature pages follow]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
COMPANY :
CLARIVATE ANALYTICS PLC
a Jersey public limited company
By:
Name:
Title:
ACQUIROR :
CHURCHILL CAPITAL CORP ,
a Delaware corporation
By:
Name:
Title:
HOLDERS :
CHURCHILL SPONSOR LLC
By:
Name:
Title:
GARDEN STATE CAPITAL PARTNERS LLC
By:
Name:
Title:
M. KLEIN ASSOCIATES, INC.
By:
Name:
Title:
[Signature Page to Registration Rights Agreement]
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THE IYER FAMILY TRUST DATED 1/25/2001
By:
Name:
Title:
MILLS FAMILY I, LLC
By:
Name:
Title:
K&BM LP
By: [  ], its general partner
By:
Name:
Title:
JMJS GROUP – II, LP
By: [  ], its general partner
By:
Name:
Title:
Name: Martin Broughton
Name: Balakrishnan S. Iyer
Name: Karen G. Mills
Name: Sheryl von Blucher
Name: Jerre Stead
Name: Michael S. Klein
[Signature Page to Registration Rights Agreement]
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ONEX ADVISOR SUBCO LLC
By:
Name:
Title:
ONEX PARTNERS HOLDINGS LIMITED
S.À R.L.
By:
Name:
Title:
ONEX PARTNERS IV LP
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general      partner
By:
Name:
Title:
ONEX PARTNERS IV PV LP
By: Onex Partners IV GP LP, its general partner
By: Onex Partners IV GP LLC, its general partner
By:
Name:
Title:
ONEX PARTNERS IV SELECT LP
By: Onex Partners IV GP LLC, its general partner
By:
Name:
Title:
ONEX PARTNERS IV GP LP
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general      partner
By:
Name:
Title:
[Signature Page to Registration Rights Agreement]
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ONEX US PRINCIPALS LP
By: Onex US Principals GP LLC
By:
Name:
Title:
ONEX CAMELOT CO-INVEST LP
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general      partner
By:
Name:
Title:
ELGIN INVESTMENT HOLDINGS LIMITED
By:
Name:
Title:
[Management Shareholders]
[Signature Page to Registration Rights Agreement]
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Exhibit B
Final​
DIRECTOR NOMINATION AGREEMENT
This Director Nomination Agreement (this “ Agreement ”) is made on [•], 2019 (the “ Effective Time ”), by and between Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), and Jerre Stead (together with his permitted successor hereunder, the “ Designated Shareholder ”, and when this Agreement refers to Mr. Stead not in his capacity as the Designated Shareholder, “ Stead ”). Unless otherwise specified herein, all of the capitalized terms used herein are defined in Section 3 hereof.
WHEREAS , the Company has agreed to permit the Designated Shareholder, who, together with Michael Klein and Sheryl von Blucher, Beneficially Owns [·] issued and outstanding ordinary shares of the Company (the “ Ordinary Shares ”) as of the Effective Time issued to such Persons in respect of Founder Shares (as defined in the Sponsor Agreement) (such number of Ordinary Shares Beneficially Owned as of the Effective Time, as set forth on Annex A attached hereto, the “ Initial Shares ”), at the Effective Time to designate up to four (4) persons for nomination for election to the board of directors of the Company (the “ Board ”) and to provide certain ongoing rights with respect to the nomination of directors on the terms and conditions set forth herein.
NOW, THEREFORE , in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
Section 1. Board of Directors .
(a) Subject to the terms and conditions of this Agreement, from and after the Effective Time and until a Termination Event shall have occurred, the Designated Shareholder shall have the right to designate up to four (4) persons to be appointed or nominated, as the case may be, for election to the Board (including any successor, each, a “ Nominee ”) by giving written notice to the Company not later than ten (10) days after receiving notice of the date of the applicable meeting of shareholders provided to the Designated Shareholder; provided , however, the initial Nominees shall be appointed as set forth in Section 1(b) ; provided , further , that if such Nominee is not one of the initial Nominees as set forth in Section 1(b) , then such Nominee must be reasonably acceptable to a majority of the Directors who are not Shareholder Directors. The initial Nominees shall be Stead, Michael Klein, Bala Iyer and Sheryl von Blucher.
(b) The Company shall take all necessary and desirable actions within its control such that, as of the Effective Time: (i) the size of the Board shall be set at fourteen (14) members; and (ii) the following persons, including the four Shareholder Directors, shall form the composition of the Board: (x) Stead, Nicholas Macksey, Anthony Munk, Kosty Gilis and Karen Mills, each of whom shall be appointed as Class III Directors with Board terms ending at the 2022 Annual Meeting of Shareholders; (y) [Baring Director], Paul Edwards, Michael Klein and Jay Nadler, each of whom shall be appointed as Class II Directors with Board terms ending at the 2021 Annual Meeting of Shareholders; and (z) [Onex Independent Director], [Onex Independent Director], Bala Iyer, Martin Broughton and Sheryl von Blucher, each of whom shall be appointed as Class I Directors with Board terms ending at the 2020 Annual Meeting of Shareholders.
(c) Subject to the terms and conditions of this Agreement, from and after the Effective Time and until a Termination Event shall have occurred, the Company shall, as promptly as practicable, take all necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and the shareholders of the Company and recommending, supporting and soliciting proxies), so that:
(i) for so long as the Shareholder Group Beneficially Owns, in the aggregate, a number of Ordinary Shares equal to or greater than eighty percent (80%) of the total number of Initial Shares, the Designated Shareholder shall have the right to nominate, in the aggregate, a number of Nominees equal to four (4) less the number of Shareholder Directors who are not up for election;
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(ii) for so long as the Shareholder Group Beneficially Owns, in the aggregate, a number of Ordinary Shares less than eighty percent (80%) and equal to or greater than sixty percent (60%) of the total number of Initial Shares, the Designated Shareholder shall have the right to nominate, in the aggregate, a number of Nominees equal to three (3) less the number of Shareholder Directors who are not up for election;
(iii) for so long as the Shareholder Group Beneficially Owns, in the aggregate, a number of Ordinary Shares less than sixty percent (60%) and equal to or greater than forty percent (40%) of the total number of Initial Shares, the Designated Shareholder shall have the right to nominate, in the aggregate, a number of Nominees equal to two (2) less the number of Shareholder Directors who are not up for election; and
(iv) for so long as the Shareholder Group Beneficially Owns, in the aggregate, a number of Ordinary Shares less than forty percent (40%) and equal to or greater than twenty percent (20%) of the total number of Initial Shares, the Designated Shareholder shall have the right to nominate, in the aggregate, a number of Nominees equal to one (1) less the number of Shareholder Directors who are not up for election.
(d) The Company shall take all actions necessary to ensure that: (i) the applicable Nominees are included in the Board’s slate of nominees to the shareholders of the Company for each election of Directors; and (ii) each applicable Nominee up for election is included in the proxy statement prepared by management of the Company in connection with soliciting proxies for every meeting of the shareholders of the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written resolution of the shareholders of the Company or the Board with respect to the election of members of the Board.
(e) If a vacancy occurs because of the death, disability, disqualification, resignation or removal of a Shareholder Director or for any other reason, the Designated Shareholder shall be entitled to designate such person’s successor, and the Company shall, within ten (10) days of such designation, take all necessary and desirable actions within its control such that such vacancy shall be filled with such successor Nominee, it being understood that any such successor designee shall serve the remainder of the term of the director whom such designee replaces); provided , that such successor Nominee must be reasonably acceptable to a majority of the Directors who are not Shareholder Directors. Notwithstanding anything to the contrary, the director position for such Shareholder Director shall not be filled pending such designation and appointment, unless the Designated Shareholder fails to designate such Nominee for more than fifteen (15) days, after which the Company may appoint a successor Director until the Designated Shareholder makes such designation.
(f) If a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for any other reason, the Designated Shareholder shall be entitled to designate promptly another Nominee ( provided , that such successor Nominee must be reasonably acceptable to a majority of the Directors who are not Shareholder Directors) and the Company shall take all necessary and desirable actions within its control such that the director position for which such Nominee was nominated shall not be filled pending such designation or the size of the Board shall be increased by one and such vacancy shall be filled with such successor Nominee within ten (10) days of such designation. Notwithstanding anything to the contrary, the director position for which such Nominee was nominated shall not be filled pending such designation and appointment, unless the Designated Shareholder fails to designate such Nominee for more than fifteen (15) days, after which the Company may appoint a successor nominee who may serve as a director if duly elected until the Designated Shareholder make such designation. The Designated Shareholder shall not be obligated to designate all (or any) of the directors he is entitled to designate pursuant to this Agreement but the failure to do so shall not constitute a waiver of their rights hereunder.
(g) The Company shall pay the reasonable, documented out-of-pocket expenses incurred by each Shareholder Director in connection with his or her services provided to or on behalf of the Company, including attending meetings (including committee meetings) or events attended on behalf of the Company at the Company’s request.
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(h) In accordance with the Company Organizational Documents, the Board may from time to time by resolution establish and maintain two or more committees of the Board, each committee to consist of one or more Directors. The Company shall notify the Designated Shareholder in writing of any new committee of the Board to be established at least five (5) days prior to the effective establishment of such committee. If requested by the Designated Shareholder, the Company shall take all necessary steps within its control to cause at least one Shareholder Director as requested by the Designated Shareholder to be appointed as a member of each such committee of the Board unless such designation would violate any legal restriction on such committee’s composition or the rules and regulations of any applicable exchange on which the Company’s securities may be listed (subject, in each case, to any applicable exceptions, including those for “controlled companies” and any applicable phase-in periods). This Section 1(h) shall automatically terminate and be of no further force and effect when the Designated Shareholder is no longer entitled to nominate three (3) or more Nominees.
(i) The Company shall (i) purchase directors’ and officers’ liability insurance in an amount determined by the Board to be reasonable and customary and (ii) for so long as any Director to the Board nominated pursuant to the terms of this Agreement serves as a Director of the Company, maintain such coverage with respect to such Directors; provided that upon removal or resignation of such Director for any reason, the Company shall take all actions reasonably necessary to extend such directors’ and officers’ liability insurance coverage for a period of not less than six (6) years from any such event in respect of any act or omission occurring at or prior to such event.
(j) For so long as any Shareholder Director serves as a Director of the Company, the Company shall not allow any amendment, alteration or repeal of any right to indemnification or exculpation covering or benefiting any Director nominated pursuant to this Agreement as and to the extent consistent with applicable law, including but not limited to Article 42 of the Company Organizational Documents (whether such right is contained in the Company Organizational Documents or another document) (except to the extent such amendment or alteration permits the Company to provide broader indemnification or exculpation rights on a retroactive basis than permitted prior thereto).
(k) For so long as the number of Shareholder Directors is (i) three (3) or four (4), at least two (2) Shareholder Directors and/or Nominees (as the context requires) shall qualify as “independent” pursuant to listing standards of the New York Stock Exchange; and (ii) two (2), at least one (1) Shareholder Director and/or Nominee (as the context requires) shall qualify as “independent” pursuant to listing standards of the New York Stock Exchange. If the number of Shareholder Directors is one (1), then no Shareholder Director and/or Nominee (as the context requires) shall be required to qualify as “independent” pursuant to listing standards of the New York Stock Exchange.
(l) The parties understand and agree that Martin Broughton shall not be renominated as a Class I Director at the Company’s 2020 Annual Meeting of Shareholders and, upon such Annual Meeting, the size of the Board shall be reduced to thirteen (13) members, at which size the Board shall remain; provided , that the size of the Board may be increased if determined to be necessary by a majority of the Directors who are not Shareholder Directors to satisfy requirements for “independence” of a majority of the Directors (including a sufficient number of Directors who are qualified to serve on the audit committee of the Board) pursuant to listing standards of the New York Stock Exchange.
Section 2. Executive Chairman . On the Effective Date and until the third (3 rd ) anniversary of the Effective Date (or, if earlier, (x) the date of the occurrence of a Termination Event or, subject to the immediately following paragraph, a For Cause Event with respect to Stead, (y) the date on which Stead no longer Beneficially Owns 75% or more of the total of  (i) the Initial Shares Beneficially Owned by him at the Effective Time that are not subject to performance-based vesting pursuant to the Sponsor Agreement, plus (ii) the Ordinary Shares being issued to him (or JMJS Group — II, LP) in exchange for 1,000,000 shares of Class B common stock of Churchill Capital Corp. purchased by him (or JMJS Group — II, LP) prior to the Effective Time pursuant to the Sponsor Agreement (each such date described in clauses (x) and (y), a “ Specified Date ”), or (z) Stead’s death, disability, resignation or retirement), Stead shall serve as the Executive Chairman of the Board (the “ Executive Chairman ”). If, on the third (3 rd ) anniversary of the Effective Date, Stead continues to serve as the Executive Chairman, then the reference to “third (3 rd ) anniversary” in the immediately preceding sentence shall be automatically amended without any action
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by the parties to refer to the “sixth (6 th ) anniversary”, unless not earlier than 90 days nor later than 30 days prior to the third (3 rd ) anniversary of the Effective Date, the Board, acting by majority of the entire Board (other than Stead) at a meeting duly called, shall have reasonably determined that it is no longer in the best interests of the Company for Stead to serve as Executive Chairman, in which case, Stead shall resign as Executive Chairman effective as of the third (3 rd ) anniversary of the Effective Date. Upon the occurrence of a Termination Event or any event described in clause (y) of the first sentence of this paragraph, Stead shall resign as Executive Chairman effective as of the Specified Date.
For purposes of this Section 2, a For Cause Event shall not be effective until and unless (i) notice of such For Cause Event has been given by the Company to the Executive Chairman within thirty (30) days after the Board as a whole learns of the act, failure or event constituting such For Cause Event, which notice shall include the particular acts or circumstance which are the basis thereof, (ii) the Executive Chairman fails to cure such alleged act or circumstance (if capable of cure) within 30 days of receipt of notice thereof, to the satisfaction of the Board in the exercise of its reasonable judgment (or, if within such 30-day period the Executive Chairman commences and proceeds to take all reasonable actions to effect such cure, within such reasonable additional time period (no longer than sixty (60) days) as may be necessary), (iii) the Board has voted (at a meeting of the Board duly called and held as to which removal of the Executive Chairman is an agenda item) by a vote of a majority of the members of the Board (other than Stead) to remove the Executive Chairman as a result of such For Cause Event after the Executive Chairman has been afforded an opportunity to appear with counsel and present his positions at such meeting and to present his case thereat, and (iv) the Company has given notice of such removal to Executive Chairman within five days after such meeting.
For the avoidance of doubt, a determination hereunder to remove Mr. Stead as Executive Chairman shall not necessarily mean he shall be removed as a Director pursuant to the Company Organizational Documents.
Section 3. Definitions .
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, such first Person.
Agreement ” has the meaning set forth in the preamble.
Assignment Event ” has the meaning set forth in Section 4 .
Beneficially Own ” has the meaning ascribed to it in Section 13(d) of the Securities Exchange Act of 1934, as amended, and, where applicable, shall include securities held by Churchill Sponsor LLC for the benefit of a Person.
Board ” has the meaning set forth in the recitals.
Business Day ” means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks in New York, New York or the Island of Jersey are authorized or required by applicable law to close.
Company ” has the meaning set forth in the preamble.
Company Organizational Documents ” means the Company’s Memorandum of Association and Articles of Association, as in effect at the Effective Time, as the same may be amended from time to time.
Company Policies ” means the rules and policies of the Company and its subsidiaries as adopted by the Company and its subsidiaries from time to time, in each case, as amended from time to time, as set forth in writing, and as delivered or made available to the Board.
Designated Shareholder ” has the meaning set forth in the preamble. Only Stead or Michael Klein can serve as the Designated Shareholder.
Director ” means a member of the Board until such individual’s death, disability, disqualification, resignation or removal.
Effective Time ” has the meaning set forth in the preamble.
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Executive Chairman ” has the meaning set forth in Section 2 .
For Cause Event ” means, with respect to the Executive Chairman, in his capacity as such, the occurrence of any of the following events: (i) such Person’s failure to comply with, in any material respect, any of the Company Policies; (ii) the Board’s determination that such Person failed in any material respect to carry out or comply with any lawful and reasonable directive of the Board; (iii) such Person’s breach of a material provision of  (x) this Agreement (in his capacity as the Designated Shareholder), (y) the Sponsor Agreement or (z) the Registration Rights Agreement (as such term is defined in the Merger Agreement, as defined in the Sponsor Agreement); (iv) such Person’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude; (v) such Person’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s (or any of its Affiliate’s) premises or while performing such Person’s duties and responsibilities under this Agreement; or (vi) such Person’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company or any of its Affiliates.
Initial Shares ” has the meaning set forth in the recitals.
Nominee ” has the meaning set forth in Section 1(a) .
Ordinary Shares ” has the meaning set forth in the recitals.
Permitted Transferee ” means any permitted transferee as provided in paragraph 7(c) of the Sponsor Agreement.
Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
Shareholder Director ” means an individual elected to the Board that has been nominated or appointed by the Designated Shareholder pursuant to this Agreement. For the avoidance of doubt, each of Stead, Michael Klein, Sheryl von Blucher and Bala Iyer shall be deemed to have been nominated or appointed, as applicable, by the Designated Shareholder pursuant to this Agreement as of the Effective Time.
Shareholder Group ” means, collectively, Stead, Michael Klein, Sheryl von Blucher, and each of their respective Permitted Transferees which Beneficially Own Ordinary Shares from time to time.
Sponsor Agreement ” means the Sponsor Agreement, dated as of January 14, 2019, by and among the Company, the Designated Shareholder, the other current members of the Shareholder Group and the other parties thereto, as amended, restated or modified from time to time.
Termination Event ” has the meaning set forth in Section 17 .
Section 4. Assignment; Benefit of Parties . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors, legal representatives and assignees for the uses and purposes set forth and referred to herein. Notwithstanding the foregoing, neither the Company, on the one hand, nor the Designated Shareholder, on the other hand, may assign any of its rights or obligations hereunder without the prior written consent of the other party; provided , that, upon the death or disability of the Designated Shareholder, the disqualification, resignation or removal of the Designated Shareholder as a Director or the date on which the Designated Shareholder no longer Beneficially Owns any Ordinary Shares, or when the then-Current Designated Shareholder so determines (each, an “ Assignment Event ”), the Designated Shareholder hereby agrees that this Agreement shall be automatically assigned, without any action by any Person, from the then-current Designated Shareholder to Michael Klein ( provided that he is a Shareholder Director and Beneficially Owns Ordinary Shares as of the time of such assignment), and the then-current Designated Shareholder shall automatically cease to have any rights hereunder; provided , further , that, if  (i) Michael Klein does not execute and deliver a joinder to this Agreement in form and substance reasonably acceptable to the Company within ten (10) days of such assignment or (ii) Michael Klein is not a Shareholder Director or does not Beneficially Own Ordinary Shares as of the time of such assignment, then such assignment shall be of no further force and effect and this Agreement shall instead terminate in accordance with the provisions of Section 17(b) . Notwithstanding
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the foregoing, such termination shall not affect or diminish the then-remaining term and other conditions of Board service of each other Shareholder Director who is then in office (with an understanding that Ms. von Blucher shall be nominated again at the end of each of her successive terms if at each such time the Shareholder Group Beneficially Owns, in the aggregate, a sufficient number of Ordinary Shares that would have entitled the Designated Shareholder to nominate at that time a number of Nominees equal to the Shareholder Directors then in office plus her). Nothing herein contained shall confer or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement.
Section 5. Remedies . The Company and the Designated Shareholder shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages may not be an adequate remedy for any such breach and that, in addition to other rights and remedies hereunder, the Company and the Designated Shareholder shall be entitled to specific performance and/or injunctive or other equitable relief  (without posting a bond or other security) from any court of law or equity of competent jurisdiction in order to enforce or prevent any violation of the provisions of this Agreement.
Section 6. Notices . All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service) or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
(a)
If to the Company:
c/o Clarivate Analytics
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom
Attention: Stephen Hartman
E-mail: stephen.hartman@clarivate.com
with a copy to (which shall not constitute notice):
Latham & Watkins LLP
555 Eleventh Street, N.W.
Washington, DC 20004
Attention: Paul Sheridan and Shaun Hartley
E-mail: paul.sheridan@lw.com and shaun.hartley@lw.com
(b)
If to the Designated Shareholder:
Jerre Stead
c/o Churchill Sponsor LLC
640 Fifth Avenue, 12 th Floor
New York, New York 10019
E-mail: jerrelstead@aol.com
with a copy to (which shall not constitute notice):
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention: Robert J. Mittman
E-mail: rmittman@blankrome.com
Section 7. Adjustments . If, and as often as, there are any changes in the Ordinary Shares by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or sale, or by any other means, appropriate adjustment shall be made in the
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provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Ordinary Shares as so changed.
Section 8. No Strict Construction . The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.
Section 9. No Third-Party Beneficiaries . Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person or entity other than the parties hereto and their respective permitted successors and assigns any remedy or claim under or by reason of this Agreement or any terms, covenants or conditions hereof, and all of the terms, covenants, conditions, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their respective permitted successors and assigns.
Section 10. Further Assurances . Each of the parties hereby agrees that it will hereafter execute and deliver any further document, agreement or instruments of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof.
Section 11. Counterparts . This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the party who executed the same, but all of such counterparts shall constitute the same agreement.
Section 12. Governing Law . This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction. Any Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may only be brought in federal and state courts located in the State of Delaware, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this paragraph. The prevailing party in any such Action (as determined by a court of competent jurisdiction) shall be entitled to be reimbursed by the non-prevailing party for its reasonable expenses, including reasonable attorneys’ fees, incurred with respect to such Action.
Section 13. Mutual Waiver of Jury Trial . The parties hereto hereby irrevocably waive any and all rights to trial by jury in any legal proceeding arising out of or related to this Agreement. Any action or proceeding whatsoever between the parties hereto relating to this Agreement shall be tried in a court of competent jurisdiction by a judge sitting without a jury.
Section 14. Complete Agreement; Inconsistent Agreements . This Agreement represents the complete agreement between the parties hereto as to all matters covered hereby and supersedes any prior agreements or understandings between the parties.
Section 15. Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 16. Amendment and Waiver . Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or the Designated Shareholder unless such modification is approved in writing by the Company and the
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Designated Shareholder. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
Section 17. Termination . Notwithstanding anything to the contrary contained herein, this Agreement shall expire and terminate automatically upon the earlier to occur of  (a) such time as the Shareholder Group Beneficially Owns, in the aggregate, a number of Ordinary Shares less than twenty percent (20%) of the total number of Initial Shares and (b) 5:00 PM eastern time on the tenth (10 th ) day following an Assignment Event if  (i) a joinder to this Agreement is not executed and delivered to the Company in accordance with Section 4 or (ii) Michael Klein is not a Shareholder Director or does not Beneficially Own Ordinary Shares as of the time of such Assignment Event (each, a “ Termination Event ”); provided , however , that Sections 1(g) , 1(i) , 1(j) , 5 , 6 , 8 , 9 and 11 through 18 shall survive the termination of this Agreement.
Section 18. Enforcement . The parties acknowledge and agree that, if a party is not performing its obligations hereunder or is otherwise in breach of this Agreement, in addition to and without limiting the rights of the other party hereunder, a majority of the Directors who are “independent” pursuant to the listing standard of the New York Stock Exchange shall have the right to seek enforcement of this Agreement and the obligations of the parties hereunder.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF , the parties hereto have executed this Agreement as a deed on the day and year first above written.
Company:

CLARIVATE ANALYTICS PLC
By:   
   
Name:
Title:
[Signature Page to Nominating Agreement]
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Designated Shareholder:
Jerre Stead
[Signature Page to Nominating Agreement]
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Annex A
[To come]
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Exhibit C
Final​
Securities transfer form for a Jersey entity
Consideration:
The issue of such number of no par value ordinary shares in Clarivate Analytics Plc as determined in accordance with a merger agreement dated 13 January 2019 between, amongst others, Clarivate Analytics Plc, Camelot Holdings (Jersey) Limited and Churchill Capital Corp
Full name of Jersey entity:
Camelot Holdings (Jersey) Limited
Full description of security:
Ordinary shares
Number or amount of shares, stock, units or other security and their number and denomination, if any (in words and figures):
[ Number ] ([ words ])
Full name(s) and full address(es) of transferor(s):
Account name (if any):
I/We transfer the above securities out of our name/s to the transferee(s) named below and I/we request that such entries be made in the register as are necessary to give effect to this transfer .
Signed [for and on behalf]
Signature [of authorised signatory]
[Print name]
[Title]
Date:     
Full name(s) and full address(es) of transferee(s):
Clarivate Analytics Plc
4 th Floor
St Paul’s Gate
22-24 New Street
St Helier
Jersey JE1 4TR
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Exhibit D
Final​
CERTIFICATE OF MERGER

of

CCC MERGER SUB, INC.
(a Delaware corporation)

with and into

CHURCHILL CAPITAL CORP
(a Delaware corporation)
Pursuant to Title 8, Section 251(c) of the Delaware General Corporation Law (the “ DGCL ”), the undersigned officer, on behalf of Churchill Capital Corp, a Delaware corporation (the “ Surviving Corporation ”), hereby certifies as follows:
FIRST: The names and states of incorporation of the constituent corporations to the merger are as follows:
(a) Churchill Capital Corp, a corporation organized under the laws of the State of Delaware; and
(b) CCC Merger Sub, Inc., a corporation organized under the laws of the State of Delaware (“ Merger Sub ”).
SECOND: The Agreement and Plan of Merger (the “ Agreement ”) has been approved, adopted, certified, executed and acknowledged by each of the Surviving Corporation and Merger Sub in accordance with Section 251 of the DGCL.
THIRD: This Certificate of Merger and the merger contemplated herein shall become effective upon the filing of this Certificate of Merger with the Secretary of State of the State of Delaware (the “ Effective Time ”).
FOURTH: Upon the Effective Time, the Certificate of Incorporation of the Surviving Corporation as in effect immediately prior to the Effective Time shall be amended and restated in its entirety as set forth in Exhibit A attached hereto and, as so amended and restated, shall be the Second Amended and Restated Certificate of Incorporation of the Surviving Corporation at (and with effect from and after) the Effective Time until further amended pursuant to the DGCL.
FIFTH: The executed Agreement is on file at Friars House, 160 Blackfriars Road, London SE1 8EZ United Kingdom, the principal place of business of the Surviving Corporation.
SIXTH: A copy of the Agreement will be furnished by the Surviving Corporation on request and without cost, to any stockholder of the Surviving Corporation and Merger Sub.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF , the Surviving Corporation has caused this Certificate of Merger to be executed by its authorized officer on the    day of         , 2019.
CHURCHILL CAPITAL CORP
By:
Name:
Title:
[Signature Page to Certificate of Merger]
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EXHIBIT A
SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

CHURCHILL CAPITAL CORP
(a Delaware corporation)
[To be attached.]
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Exhibit-F​
Final​
Dated [           ] 2019
Companies (Jersey) Law 1991
   
Company Limited by Shares
AMENDED AND RESTATED Memorandum of
Association
of
Clarivate Analytics PLC
[MISSING IMAGE: LG_OGIER.JPG]

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Companies (Jersey) Law 1991
   
Company Limited by Shares
   
Amended and Restated
   
Memorandum of Association
   
of
   
Clarivate Analytics PLC
1.
The name of the Company is Clarivate Analytics PLC.
2.
The Company is a public company limited by shares.
3.
The Company is a no par value company.
4.
The Company has unrestricted corporate capacity.
5.
The liability of each member arising from his or her holding of a share is limited to the amount (if any) unpaid on it.
6.
There is no limit on the number of shares of any class which the Company is authorised to issue.

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We, the subscribers to this memorandum of association, wish to form a company in accordance with this memorandum; and we agree to take the number of shares in the capital of the Company shown below.
Dated the [         ] day of  [         ], 2019
Signed for and on behalf of Onex Partners IV LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
Print name
Print name
Number of shares: 1
Signed for and on behalf of Onex Partners IV GP LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP Limited, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
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TABLE OF CONTENTS
Dated [           ], 2019
Companies (Jersey) Law 1991
   
Company Limited by Shares
AMENDED AND RESTATED
Articles of Association
of
Clarivate Analytics PLC
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Companies (Jersey) Law 1991
   
Company Limited by Shares
   
Amended and Restated
   
Articles of Association
   
of
   
Clarivate Analytics PLC
1
Definitions, interpretation and exclusion of Standard Table
Definitions
1.1
In these Articles, unless otherwise defined, the defined terms shall have the meanings assigned to them as follows:
Affiliate means:
(a)
in the case of a natural person, such person’s parents, parents-in-law, spouse, children or grandchildren, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by such person or any of the foregoing, and
(b)
in the case of a corporation, partnership or other entity or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity.
The term control shall mean the ownership, directly or indirectly, of shares possessing more than fifty per cent (50%) of the voting power of the corporation, or the partnership or other entity (other than, in the case of a corporation, shares having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity; provided that the Company and its subsidiaries shall not be considered Affiliates of the Onex Shareholders, the Baring Shareholders or the Designated Shareholder.
Articles means, as appropriate:
(a)
these Articles of Association as amended from time to time; or
(b)
two or more particular Articles of these Articles;
and Article refers to a particular Article of these Articles;
Baring Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Baring Shareholders pursuant to the Shareholders Agreement;
Baring Shareholders means the Baring Shareholders, as such term is defined in the Shareholders Agreement;
Business Day means a day, excluding Saturdays or Sundays, on which banks in New York, New York, United States of America and the Island are open for general banking business throughout their normal business hours;
Commission means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act;
Company means the above-named company;
Company’s Website means the website of the Company, the address or domain name of which has been notified to Members;
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Controlled Company has the meaning given to it in the rules of the Designated Stock Exchange;
Default Rate means 3% (three per cent) per annum over the base rate of the Bank of England from time to time;
Designated Shareholder means the Designated Shareholder, as such term is defined in the Director Nomination Agreement;
Designated Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Designated Shareholder pursuant to the relevant Director Nomination Agreement;
Designated Stock Exchange means the New York Stock Exchange or any other stock exchange or automated quotation system on which the Company’s securities are then traded;
Director Nomination Agreement means the director nomination agreement to be entered into by and between the Company and the Designated Shareholder, as amended from time to time;
Directors means the directors of the Company for the time being, or as the case may be, the Directors assembled as a board or as a committee thereof;
Dividend means any dividend (whether interim or final) resolved to be paid on Shares pursuant to these Articles;
Electronic has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
electronic communication means electronic transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than a majority vote of the Directors;
Electronic Record has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
Electronic Signature has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
Exchange Act means the United States Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
Exemption Order means the Companies (Transfers of Shares – Exemptions) (Jersey) Order 2014;
Fully Paid and Paid Up means that the agreed issue price for a Share has been fully paid or credited as paid in money or money’s worth;
Island means Jersey, Channel Islands;
Joint Holders means two or more persons registered as the holders of a Share or Shares or who are jointly entitled to a Share or Shares by reason of the death or bankruptcy of the registered holder.
Law means the Companies (Jersey) Law 1991;
Market Price means for any given day, the price quoted in respect of the Ordinary Shares on the Designated Stock Exchange of the close of trading on such day, or if such day is not a date on which the Designated Stock Exchange is open, then the close of trading on the previous trading day;
Member means any person or persons entered on the register of members from time to time as the holder of a Share;
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Memorandum means the Memorandum of Association of the Company as amended from time to time;
month means a calendar month;
Nominating Member means (i) the Member providing the notice of the nomination proposed to be made at a general meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at any general meeting is made, and (iii) any affiliate or associate of such stockholder or beneficial owner;
Officer means a person appointed to hold an office in the Company; and the expression includes a director or liquidator, but does not include the Secretary;
Onex Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Onex Shareholders pursuant to the Shareholders Agreement;
Onex Shareholders means the Onex Shareholders, as such term is defined in the Shareholders Agreement;
Ordinary Resolution means a resolution of a duly constituted general meeting of the Company passed by a simple majority of the votes cast by, or on behalf of, the Members entitled to vote. The expression also includes a written resolution signed by or on behalf of a simple majority of the Members who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting;
Ordinary Shares means an Ordinary Share in the capital of the Company of no par value designated as Ordinary Shares, and having the rights provided for in these Articles;
PDF means Portable Document Format;
Preferred Shares means shares in the capital of the Company of no par value designated as Preferred Shares, and having the rights provided for in these Articles;
Register of Members means the register maintained by the Company in accordance with Article 41 of the Law or any modification or re-enactment thereof for the time being in force;
Registered Office means the registered office for the time being of the Company;
Regulations means the Companies (Uncertificated Securities) (Jersey) Order 1999 including any modification or re-enactment of them for the time being in force;
Seal means the common seal of the Company including any facsimile thereof;
Secretary means a person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary;
Securities Act means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
Share means a share in the share capital of the Company, and the expression:
(a)
includes stock (except where a distinction between shares and stock is expressed or implied); and
(c)
where the context permits, also includes a fraction of a share;
Shareholder Group has the meaning given in the Director Nomination Agreement.
Shareholders Agreement means the Amended and Restated Shareholders Agreement to be entered into by and among the Company, the Onex Shareholders, the Baring Shareholders and the other parties thereto, as amended from time to time;
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signed means a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a person with the intent to sign the electronic communication;
Special Resolution has the meaning given to that term in the Law. The expression also includes a written resolution signed by or on behalf of the requisite majority of Members required for the passing of a Special Resolution who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting;
subsidiary has the meaning given to that term in Article 2 of the Law;
Treasury Share means a share held in the name of the Company as a treasury share in accordance with the Law; and
year means a calendar year.
Interpretation
1.2
In these Articles, save where the context requires otherwise:
(a)
words importing the singular number shall include the plural number and vice versa;
(b)
words importing the masculine gender only ( i.e. , he and his ) shall include the feminine gender ( i.e. , her and hers ) and shall include references to entities without gender ( i.e. , it and its );
(c)
a reference to a person includes, as appropriate, a company, trust, partnership, joint venture, association, body corporate or government agency;
(d)
may shall be construed as permissive and “shall” shall be construed as imperative;
(e)
a reference to a dollar or dollars (or $) is a reference to dollars of the United States of America;
(f)
references to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force;
(g)
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;
(h)
written and in writing means all modes of representing or reproducing words in visible form, including in the form of an electronic record and any requirements as to delivery under these Articles include delivery in the form of an electronic record; where used in connection with a notice served by the Company on Members or other persons entitled to receive notices hereunder, such writing shall also include a record maintained in an electronic medium which is accessible in visible form so as to be useable for subsequent reference;
(i)
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;
(j)
the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share;
(k)
headings are inserted for convenience only and do not affect the interpretation of these Articles, unless there is ambiguity;
(l)
where a word or phrase is given a defined meaning, another part of speech or grammatical form in respect to that word or phrase has a corresponding meaning; and
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(m)
all references to time are to be calculated by reference to time in the place where the Company’s registered office is located.
Exclusion of Standard Table
1.3
The regulations contained in the Standard Table adopted pursuant to the Companies (Standard Table) (Jersey) Order 1992 and any other regulations contained in any statute or subordinate legislation are expressly excluded and do not apply to the Company.
Shareholders Agreement and Director Nomination Agreement
1.4
Notwithstanding any provision of these Articles to the contrary, each of the Onex Shareholders, the Baring Shareholders and the Designated Shareholder shall have the respective rights set forth in the Shareholders Agreement or the Director Nomination Agreement, as applicable.
2
Shares
Power to issue Shares and options, with or without special rights
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), the Directors may, in their absolute discretion and without approval of the holders of Ordinary Shares, allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise, any or all of which may be greater than the powers and rights associated with the Ordinary Shares, to such persons, at such times and on such other terms as they think proper, which shall be conclusively evidenced by their approval of the terms thereof, and may also (subject to the Law and these Articles) vary such rights.
2.2
The Company shall not issue Shares in bearer form and shall only issue Shares as fully paid.
Power to issue fractions of a Share
2.3
Subject to the Law, the Company may issue fractions of a Share of any class. A fraction of a Share shall be subject to and carry the corresponding fraction of liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a Share of that class of Shares.
Capital contributions without issue of further Shares
2.4
With the consent of a Member, the Directors may accept a voluntary contribution from that Member without issuing Shares in return. If the Directors agree to accept a voluntary contribution from a Member, the Directors shall resolve whether that contribution shall be treated as an addition to the stated capital account of the Company or to a general reserve of the Company (it being understood that the contribution is not provided by way of loan).
Limit on the number of Joint Holders
2.5
In respect of a Share, the Company shall not be required to enter the names of more than four Joint Holders in the register of members of the Company.
2.6
If two or more persons are registered as Joint Holders of a Share, then any one of those Joint Holders may give effectual receipts for moneys payable in respect of that Share.
Treasury Shares
2.7
From time to time, the Company may hold its own Shares as treasury shares and the Directors may sell, transfer or cancel any treasury shares in accordance with the Law. For the avoidance of doubt, the Company shall not be entitled to vote or receive any distributions in respect of any treasury shares held by it.
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3
Ordinary Shares
3.1
The holders of the Ordinary Shares shall be:
(a)
entitled to dividends in accordance with the relevant provisions of these Articles;
(b)
entitled to and are subject to the provisions in relation to winding up of the Company provided for in these Articles; and
(c)
entitled to attend general meetings of the Company and shall be entitled to one vote for each Ordinary Share registered in the name of such holder in the Register of Members, both in accordance with the relevant provisions of these Articles.
3.2
All Ordinary Shares shall rank pari passu with each other in all respects.
4
Preferred Shares
4.1
Preferred Shares may be issued from time to time in one or more series, each of such series to have such voting powers (full or limited or without voting powers), designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed, or in any resolution or resolutions providing for the issue of such series adopted by the Directors as hereinafter provided.
4.2
Authority is hereby granted to the Directors, subject to the provisions of the Memorandum, these Articles and applicable law, to create one or more series of Preferred Shares and, with respect to each such series, to fix by resolution or resolutions, without any further vote or action by the Members of the Company providing for the issue of such series:
(a)
the number of Preferred Shares to constitute such series and the distinctive designation thereof;
(b)
the dividend rate on the Preferred Shares of such series, the dividend payment dates, the periods in respect of which dividends are payable ( Dividend Periods ), whether such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate;
(c)
whether the Preferred Shares of such series shall be convertible into, or exchangeable for, Shares of any other class or classes or any other series of the same or any other class or classes of Shares and the conversion price or prices or rate or rates, or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided in such resolution or resolutions;
(d)
the preferences, if any, and the amounts thereof, which the Preferred Shares of such series shall be entitled to receive upon the winding up of the Company;
(e)
the voting power, if any, of the Preferred Shares of such series;
(f)
transfer restrictions and rights of first refusal with respect to the Preferred Shares of such series; and
(g)
such other terms, conditions, special rights and provisions as may seem advisable to the Directors.
4.3
Notwithstanding the fixing of the number of Preferred Shares constituting a particular series upon the issuance thereof, the Directors at any time thereafter may authorise the issuance of additional Preferred Shares of the same series subject always to the Law and the Memorandum.
4.4
No dividend shall be declared and set apart for payment on any series of Preferred Shares in respect of any Dividend Period unless there shall likewise be or have been paid, or declared and set apart for payment, on all Preferred Shares of each other series entitled to cumulative
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dividends at the time outstanding which rank senior or equally as to dividends with the series in question, dividends rateably in accordance with the sums which would be payable on the said Preferred Shares through the end of the last preceding Dividend Period if all dividends were declared and paid in full.
4.5
If, upon the winding up of the Company, the assets of the Company distributable among the holders of any one or more series of Preferred Shares which (a) are entitled to a preference over the holders of the Ordinary Shares upon such winding up and (b) rank equally in connection with any such distribution shall be insufficient to pay in full the preferential amount to which the holders of such Preferred Shares shall be entitled, then such assets, or the proceeds thereof, shall be distributed among the holders of each such series of the Preferred Shares rateably in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full.
5
Register of Members and share certificates
Issue of share certificates
5.1
The Company shall maintain or cause to be maintained the Register of Members in accordance with the Law.
5.2
Subject to and to the extent permitted by the Law, the Company, or the Directors on behalf of the Company, may cause to be kept and maintained in any country, territory or place, a branch register of Members resident in such country, territory or place, and the Company may, or the Directors on behalf of the Company may, make and vary such regulations as it or they may think fit regarding the keeping of any such branch register.
5.3
Upon being entered in the register of members as the holder of a Share, a Member shall, subject to Article 5.8, be entitled:
(a)
without payment, to one certificate for all the Shares of each class held by that Member (and, upon transferring a part of the Member’s holding of Shares of any class, to a certificate for the balance of that holding); and
(b)
upon payment of such reasonable sum as the Directors may determine for every certificate after the first, to several certificates each for one or more of that Member’s Shares.
5.4
Every certificate shall specify the number, class and distinguishing numbers (if any) of the Shares to which it relates and whether they are Fully Paid or partly paid up. A certificate may be executed under seal or executed in such other manner as the Directors determine.
5.5
The Company shall not be bound to issue more than one certificate for Shares held jointly by several persons and delivery of a certificate for a Share to one Joint Holder shall be a sufficient delivery to all of them.
5.6
All certificates for Shares shall be delivered personally or sent through the post addressed to the member entitled thereto at the Member’s registered address as appearing in the Register of Members. Every share 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 share certificate lost or delayed in the course of delivery.
Renewal of lost or damaged share certificates
5.7
If a share certificate is defaced, worn-out, lost or destroyed, it may be renewed on such terms (if any) as to:
(a)
evidence;
(b)
indemnity;
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(c)
payment of the expenses reasonably incurred by the Company in investigating the evidence; and
(d)
payment of a reasonable fee, if any, for issuing a replacement share certificate;
as the Directors may determine, and (in the case of defacement or wearing-out) on delivery to the Company of the old certificate.
Uncertificated shares
5.8
Subject to Article 5.9, at any time the Shares are listed on the Designated Stock Exchange (provided that the Designated Stock Exchange remains an “approved stock exchange” (as defined in the Exemption Order)), the Company shall not be required to (although may, in its absolute discretion choose to), provide a share certificate in accordance with Article 5.3.
5.9
Following a written request at any time from a Member to the Company requesting a share certificate in respect of Shares held by that Member, the Company shall, within 2 months of receipt by the Company of that written request, complete and have ready for delivery the certificate of such Shares in respect of which the request was made unless the conditions of allotment of the Shares otherwise provide.
6
Reserved
7
Transfer of shares
Form of transfer
7.1
Subject to these Articles (including Article 7.8), any agreement between a Member and the Company, and the rules or regulations of the Designated Stock Exchange or any relevant securities laws (including, but not limited to the Exchange Act), any Member may transfer all or any of his Shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Directors acting reasonably 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.
7.2
The instrument of transfer shall be executed by or on behalf of the transferor. Without prejudice to the last preceding Article, the Directors may also resolve, either generally or in any particular case, upon request by the transferor or transferee to accept mechanically executed transfers. The transferor shall be deemed to remain the holder of the Share until the name of the transferee in entered into the Register of Members in respect thereof.
Power to refuse registration
7.3
The Directors may decline to recognise any instrument of transfer unless:
(a)
the instrument of transfer is in respect of only one class of Share;
(b)
the instrument of transfer is lodged at the Registered Office or such other place as the Register of Members is kept in accordance with the Law accompanied by the relevant share certificate(s) (if any) or such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and
(c)
the instrument of transfer is duly and properly signed and endorsed or accompanied by the share certificates in respect of the relevant Shares or an indemnity.
Notice of refusal to register
7.4
If the Directors refuse to register a transfer of a Share, they must send notice of their refusal to the existing Member within two months after the date on which the transfer was lodged with the Company.
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Fee, if any, payable for registration
7.5
If the Directors so decide, the Company may charge a reasonable fee for the registration of any instrument of transfer or other document relating to the title to a Share.
Company may retain instrument of transfer
7.6
The Company shall be entitled to retain any instrument of transfer which is registered; but an instrument of transfer which the Directors refuse to register shall be returned to the person lodging it when notice of the refusal is given.
Transfer to branch register
7.7
The Directors in so far as permitted by any applicable law and rules of the Designated Stock Exchange may, in their absolute discretion, at any time and from time to time transfer any Share upon the Register of Members to any branch register or any Share on any branch register to the Register of Members or any other branch register. In the event of any such transfer, the Member requesting such transfer shall bear the cost of effecting such transfer unless the Directors otherwise determine.
Holding of Shares through Direct Registration System
7.8
At any time any of the Shares are listed on the Designated Stock Exchange (provided that the Designated Stock Exchange remains an approved stock exchange (as defined in the Exemption Order)), a transfer of such Shares is exempt from the provisions of Article 42(1) of the Law requiring an instrument of transfer to be delivered to the Company where the following conditions are met in respect of such transfer:
(a)
the transfer is made:
(i)
to or from an approved central securities depository (as defined in the Exemption Order), or
(ii)
by means of a computer system (as defined in the Exemption Order); and
(b)
the transfer is in accordance with the relevant laws (as defined in the Exemption Order) applicable to, and relevant rules and regulations of, the Designated Stock Exchange.
8
Redemption, Purchase and Surrender of Shares, Treasury Shares
8.1
Subject to the provisions, if any, in these Articles, the Memorandum, applicable law, including the Law, and the rules of the Designated Stock Exchange, the Company may:
(a)
issue Shares on terms that they are to be redeemed or are liable to be redeemed at the option of the Company or the Member on such terms and in such manner as the Directors may, before the issue of such Shares, determine; and
(b)
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, provided that the manner of purchase is in accordance with any applicable requirements imposed from time to time by the Commission or the Designated Stock Exchange.
8.2
The Company may make a payment in respect of the redemption or purchase of Shares in any manner authorised by the Law, including out of capital, profits or the proceeds of a fresh issue of Shares.
8.3
The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.
8.4
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).
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Power to pay for redemption or purchase in cash or in specie
8.5
When making a payment in respect of the redemption or purchase of Shares, the Directors may make the payment in cash or in specie (or partly in one way and partly in the other way).
Effect of redemption or purchase of a Share
8.6
Upon the date of redemption or purchase of a Share:
(a)
the Member holding that Share shall cease to be entitled to any rights in respect of the Share other than the right to receive:
(i)
the applicable payment for the Share; and
(ii)
any dividend declared in respect of the Share prior to the date of redemption or purchase;
(b)
the Member’s name shall be removed from the Register of Members with respect to the Share; and
(c)
the Share shall be cancelled or become a Treasury Share.
For the purpose of this Article, the date of redemption or purchase is the date when the redemption or purchase occurs.
9
Variation of Rights Attaching to Shares
9.1
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 sanction of a resolution passed by a majority of not less than two thirds of the votes cast 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 one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.
9.2
For the purposes of a separate class meeting, 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 in priority to or pari passu therewith.
10
Commission on Sale of Shares
The Company may, in so far as the Law permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful.
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11
Non-Recognition of Trusts
Except as required by law:
(a)
no person shall be recognised by the Company as holding any Share on any trust; and
(b)
no person other than the Member shall be recognised by the Company as having any right in a Share.
12
Transmission of Shares
Persons entitled on death of a Member
12.1
If a Member dies, the survivor or survivors (where he was a Joint Holder) or his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder.
Registration of transfer of a Share following death or bankruptcy
12.2
Any person becoming entitled to a Share in consequence of the death or bankruptcy, 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 him to the Company, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy, liquidation or dissolution, as the case may be.
Indemnity
12.3
The Directors may require a person registered as a Member by reason of the death or bankruptcy of another Member to indemnify the Company and the Directors against any loss or damage suffered by the Company or the Directors as a result of that registration.
Rights of person entitled to a Share following death or bankruptcy
12.4
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 he would be entitled if he were the holder of such Share. However, he 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 himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline registration as they would have had in the case of a transfer of the Share by the relevant Member before his 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 ninety 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.
13
Alteration of capital
Increasing, consolidating, converting, dividing and cancelling share capital
13.1
To the fullest extent permitted by the Law, the Company may by Special Resolution do any of the following (and amend its Memorandum and its Articles for that purpose):
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(a)
increase or reduce the number of Shares that it is authorised to issue;
(b)
consolidate all or any of the Shares (whether issued or not) into fewer shares; or
(c)
divide all or any of the Shares (whether issued or not) into more shares.
13.2
All new Shares created hereunder shall be subject to the same provisions with reference to the payment of liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital.
Reducing share capital
13.3
Subject to the Law and to any rights for the time being conferred on the Members holding a particular class of Shares, the Company may, by Special Resolution, reduce its share capital in any way.
Sale of fractions of Shares
13.4
Whenever, as a result of a consolidation or division of Shares, any Members would become entitled to fractions of a Share, the Directors may, in their absolute discretion, on behalf of those Members, sell the Shares representing the fractions for (i) the Market Price on the date of such consolidation or division, in the case of any shares listed on a Designated Stock Exchange, and (ii) the best price reasonably obtainable by the Company, in the case of any shares not listed on a Designated Stock Exchange, and distribute the net proceeds of sale in due proportion among those Members, and the Directors may authorise (and the relevant Member hereby authorises) any person to execute an instrument of transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the Shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
14
Closing Register of Members or Fixing Record Date
14.1
The Directors shall prepare, or cause to be prepared, at least ten (10) days before every general meeting, a complete list of the Members entitled to vote at such meeting, arranged in alphabetical order, and showing the address of each Member and the number of Shares registered in the name of each Member. Such list shall be open to the examination of any Member, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the principal executive office of the Company. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Member who is present.
14.2
The Directors, in accordance with the Law, may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, attend or to vote at a meeting of the Members or any adjournment thereof, or for the purpose of determining those Members that are entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.
14.3
If no record date is fixed for the determination of Members entitled to receive notice of, attend or to vote at a meeting of Members or those Members that are entitled to receive payment of a Dividend or other distribution, the record date for such determination of Members shall be, subject to the Law, at the close of business on the Business Day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the Business Day next preceding the day on which the meeting is held. When a determination of those Members that are entitled to receive notice of, attend or vote at a meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.
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15
General Meetings
Power to call meetings
15.1
The Directors may call a general meeting at any time.
15.2
If there are insufficient Directors to constitute a quorum and the remaining Directors are unable to agree on the appointment of additional Directors, the Directors must call a general meeting for the purpose of appointing additional Directors.
15.3
The Directors must also call a general meeting if requisitioned in the manner set out in the next two Articles.
15.4
The requisition must be in writing and given by one or more Members who together hold at least 10% of the rights to vote at such general meeting.
15.5
The requisition must also:
(a)
specify the objects of the meeting;
(b)
be signed by or on behalf of the requisitioners. The requisition may consist of several documents in like form signed by one or more of the requisitioners; and
(c)
be deposited at the Company’s registered office in accordance with the notice provisions.
15.6
Should the Directors fail to call a general meeting within 21 days from the date of deposit of a requisition to be held within 2 months of that date, the requisitioners or any of them representing more than one half of the total voting rights of all of them, may call a general meeting to be held within three months from that date.
15.7
Without limitation to the foregoing, if there are insufficient Directors to constitute a quorum and the remaining Directors are unable to agree on the appointment of additional Directors, any one or more Members who together hold at least 10% of the rights to vote at a general meeting may call a general meeting for the purpose of considering the business specified in the notice of meeting which shall include as an item of business the appointment of additional Directors.
15.8
If the Members call a meeting under the above Articles, the Company shall reimburse their reasonable expenses.
Annual general meetings
15.9
The Company shall hold annual general meetings unless otherwise dispensed with in accordance with the Law. The first annual general meeting shall be held within a period of 18 months of the Company’s incorporation and thereafter at least once in every calendar year. Not more than 18 months may elapse between one annual general meeting and the next.
Content of notice
15.10
Notice of a general meeting shall specify each of the following:
(a)
the place, the date and the time of the meeting;
(b)
if the meeting is to be held in two or more places, the technology that will be used to facilitate the meeting;
(c)
subject to Articles 15.10(d) and 15.20, the general nature of the business to be transacted;
(d)
if a resolution is proposed as a Special Resolution, the text of that resolution; and
(e)
in the case of an annual general meeting, that the meeting is an annual general meeting.
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15.11
In each notice, there shall appear with reasonable prominence the following statements:
(a)
that a Member who is entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of that Member; and
(b)
that a proxy need not be a Member.
Period of notice
15.12
A general meeting, including an annual general meeting, shall be called by at least 14 clear days’ notice (but not more than sixty (60) calendar days’ notice). A meeting, however, may be called on shorter notice if it is so agreed:
(a)
in the case of an annual general meeting, by all the Members entitled to attend and vote at that meeting; and
(b)
in the case of any other meeting, by a majority in number of the Members having a right to attend and vote at that meeting, being a majority together holding not less than:
(i)
95% where a Special Resolution is to be considered; or
(ii)
90% for all other meetings;
of the total voting rights of the Members who have that right.
Persons entitled to receive notice
15.13
Subject to the provisions of these Articles and to any restrictions imposed on any Shares, the notice shall be given to the following people:
(a)
the Members;
(b)
persons entitled to a Share in consequence of the death or bankruptcy of a Member;
(c)
the Directors;
(d)
the Company’s auditor (if any); and
(e)
persons entitled to vote in respect of a Share in consequence of the incapacity of a Member.
Publication of notice on a website
15.14
Subject to the Law, a notice of a general meeting may be published on a website providing the recipient is given separate notice of:
(a)
the publication of the notice on the website;
(b)
the address of the website;
(c)
the place on the website where the notice may be accessed;
(d)
how it may be accessed; and
(e)
the place, date and time of the general meeting.
15.15
If a Member notifies the Company that he is unable for any reason to access the website, the Company must as soon as practicable give notice of the meeting to that Member in writing or by any other means permitted by these Articles but this will not affect when that Member is deemed to have been given notice of the meeting.
Time a website notice is deemed to be given
15.16
A website notice is deemed to be given when the Member is given notice of its publication.
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Required duration of publication on a website
15.17
Where the notice of meeting is published on a website, it shall continue to be published in the same place on that website from the date of the notification until the conclusion of the meeting to which the notice relates.
Accidental omission to give notice or non-receipt of notice
15.18
Proceedings at a meeting shall not be invalidated by the following:
(a)
an accidental failure to give notice of the meeting or an instrument of proxy to any person entitled to notice; or
(b)
non-receipt of notice of the meeting or an instrument of proxy by any person entitled to notice.
15.19
In addition, where a notice of meeting is published on a website, proceedings at the meeting shall not be invalidated merely because it is accidentally published:
(a)
in a different place on the website; or
(b)
for only part of the period from the date of the notification until the conclusion of the meeting to which the notice relates.
Notice of other business
15.20
No business may be transacted at any general meeting, other than business that is either (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Directors (or any duly authorised committee thereof) or pursuant to a requisition of a meeting by Members in accordance with Article 15.3, (B) otherwise properly brought before an annual general meeting by or at the direction of the Directors (or any duly authorised committee thereof) or (C) otherwise properly brought before an annual general meeting by any Member of the Company who (1) is a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting and (2) complies with the notice procedures set forth in this Article.
(a)
In addition to any other applicable requirements, for business to be brought properly before an annual general meeting by a Member, such Member must have given timely notice thereof in proper written form to the Secretary of the Company and comply with Article 15.20(c) and (f).
(b)
All notices of general meetings shall be sent or otherwise given in accordance with this Article not less than fourteen (14) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and (i) in the case of an extraordinary general meeting, the purpose or purposes for which the meeting is called (no business other than that specified in the notice may be transacted) or (ii) in the case of the annual general meeting, those matters which the Directors, at the time of giving the notice, intend to present for action by the members (but any proper matter may be presented at the meeting for such action). The notice of any meeting at which Directors are to be elected shall include the name of any nominee or nominees who, at the time of the notice, the Directors intend to present for election.
(c)
For matters other than for the nomination for election of a Director to be made by a Member, to be timely such Member’s notice shall be delivered to the Company at the principal executive offices of the Company not less than ninety (90) days and not more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual general meeting; provided, however, that if the Company’s annual general meeting occurs on a date more than thirty (30) days earlier or later than the Company’s prior year’s annual general meeting, then the Directors shall
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determine a date a reasonable period prior to the Company’s annual general meeting by which date the Members notice must be delivered and publicise such date in a filing pursuant to the Exchange Act, or via press release. Such publication shall occur at least fourteen (14) days prior to the date set by the Directors. Subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, as applicable, the Onex Shareholders, the Baring Shareholders and the Designated Shareholder shall have the right (but not the obligation) to nominate at any time the persons to be elected to the board of Directors which the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, as applicable, are entitled to nominate to the board of Directors pursuant to the terms of the Shareholders Agreement or the Director Nomination Agreement, as applicable, in accordance with the provisions of these Articles for the election of Directors.
(d)
To be in proper written form, a Member’s notice to the Company must set forth as to such matter such Member proposes to bring before the annual general meeting:
(i)
a reasonably brief description of the business desired to be brought before the annual general meeting, including the text of the proposal or business, and the reasons for conducting such business at the annual general meeting;
(ii)
the name and address, as they appear on the Company’s Register of Members, of the Member proposing such business and any Member Associated Person (as defined below);
(iii)
the class or series and number of Shares of the Company that are held of record or are beneficially owned by such Member or any Member Associated Person and any derivative positions held or beneficially held by the Member or any Member Associated Person;
(iv)
whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of such Member or any Member Associated Person with respect to any securities of the Company, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such Member or any Member Associated Person with respect to any securities of the Company;
(v)
any material interest of the Member or a Member Associated Person in such business, including a reasonably detailed description of all agreements, arrangements and understandings between or among any of such Members or between or among any proposing Members and any other person or entity (including their names) in connection with the proposal of such business by such Member; and
(vi)
a statement as to whether such Member or any Member Associated Person will deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s voting Shares required under applicable law and the rules of the Designated Stock Exchange to carry the proposal.
For purposes of this Article 15.20(d), a Member Associated Person of any Member shall mean (x) any Affiliate of, or person acting in concert with, such Member; (y) any beneficial owner of Shares of the Company owned of record or beneficially by such Member and on whose behalf the proposal or nomination, as the case may be, is being made; or (z) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (x) and (y).
(e)
In addition to any other applicable requirements and subject to Article 1.4, for a nomination for election of a Director to be made by a Member of the Company
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(other than Directors to be nominated by any series of Preferred Shares, voting separately as a class), such Member must (i) be a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting; (ii) on each such date beneficially own more than 15% of the issued Ordinary Shares (unless otherwise provided in the Exchange Act or the rules and regulations of the Commission); and (iii) have given timely notice thereof in proper written form to the Secretary of the Company. If a Member is entitled to vote only for a specific class or category of Directors at a meeting of the Members, such Member’s right to nominate one or more persons for election as a Director at the meeting shall be limited to such class or category of Directors.
(f)
To be timely for purposes of Article 15.20(e), a Member’s notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than ninety (90) nor more than one hundred twenty (120) days prior to the meeting; provided, however, that in the event less than one hundred thirty (130) days’ notice or prior public disclosure of the date of the meeting is given or made to Members, notice by the Member to be timely must be so received not later than the close of business on the tenth (10 th ) day following the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made.
(g)
To be in proper written form for purposes of Article 15.20(f), a Member’s notice to the Secretary must set forth:
(i)
as to each Nominating Member:
(A)
the information that is requested in Article 15.20(d)(ii)-(d)(vi); and
(B)
any other information relating to such Member that would be required to be disclosed pursuant to any applicable law and rules of the Commission or of the Designated Stock Exchange; and
(ii)
as to each person whom the Member proposes to nominate for election as a Director:
(A)
all information that would be required by Article 15.20(d)(ii)-(d)(vi) if such nominee was a Nominating Member, except such information shall also include the business address and residence address of the person;
(B)
the principal occupation or employment of the person;
(C)
all information relating to such person that is required to be disclosed in solicitations of proxies for appointment of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act or any successor provisions thereto, and any other information relating to the person that would be required to be disclosed pursuant to any applicable law and rules of the Commission or of the Designated Stock Exchange; and
(D)
a description of all direct and indirect compensation and other material monetary arrangements and understandings during the past three years, and any other material relationship, between or among any Nominating Member and its Affiliates and associates, on the one hand, and each proposed nominee, his respective Affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K of the Exchange Act if such Nominating Member were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant.
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Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a Director if elected. The Company may require any proposed nominee to furnish such other information as may be reasonably required by the Company to determine the eligibility of such proposed nominee to serve as an independent Director of the Company in accordance with the rules of the Designated Stock Exchange.
(h)
Unless otherwise provided by (i) the terms of these Articles, (ii) any series of Preferred Shares or (iii) the agreements set forth in Article 15.20(c) or (iv) any other agreement among Members or other agreement, in the case of this clause (iv), approved by the Directors, only persons who are nominated in accordance with the procedures set forth above, shall be eligible to serve as Directors. If the chairman of a general meeting determines that a proposed nomination was not made in compliance with these Articles, he or she shall declare to the general meeting that nomination is defective and such defective nomination shall be disregarded. Notwithstanding the foregoing provisions of these Articles, if the Nominating Member (or a qualified representative of the Nominating Member) does not appear at the general meeting to present the nomination, such nomination shall be disregarded.
(i)
Notwithstanding anything herein to the contrary, the Onex Shareholders, the Baring Shareholders and the Designated Shareholder, as applicable, shall not be required to comply with the advance notice or 15% ownership threshold requirements, as applicable, set forth in Articles 15.20(c) and 15.20(e) for so long as the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, as applicable, are entitled to nominate one or more Directors pursuant to the Shareholders Agreement or the Board Nomination Agreement, as applicable, but shall provide any such notice to the Company at least fourteen (14) days prior to the applicable general meeting.
15.21
The Directors will ensure that the Onex Shareholder Designees, the Baring Shareholder Designees and the Designated Shareholder Designees nominated in accordance with Article 1.4 are included in the notice of meeting for the next available annual general meeting or any extraordinary general meeting at which Directors are to be elected, noting that a general meeting will only be the next available annual general meeting if the advance notice requirements of these Articles can be complied with.
15.22
Subject to the other provisions of these Articles, the Company may by Ordinary Resolution appoint any person to be a Director.
15.23
Subject to these Articles, a Director shall hold office until the expiry of his or her term as contemplated by Article 20.2 or, until such time as he or she vacates office in accordance with Article 26.1.
15.24
No person shall be eligible for election as a Director of the Company unless nominated in accordance with the procedures set forth in this Article. If the chairman of an annual general meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. This Article 15 shall not apply to any nomination of a Director (a) in an election in which only the holders of one or more series of Preferred Shares of the Company are entitled to vote (unless otherwise provided in the terms of such series of Preferred Shares) or (b) pursuant to Article 21.4.
16
Proceedings at meetings of Members
Quorum
16.1
No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. Members holding in aggregate not
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less than a simple majority of all voting share capital of the Company in issue present in person or by proxy and entitled to vote shall be a quorum, provided that the minimum quorum for any meeting shall be two Members entitled to vote.
Use of technology
16.2
A person may not participate at a general meeting by conference telephone or other communications equipment.
Lack of quorum
16.3
If a quorum is not present within 15 minutes of the time appointed for the meeting, or if at any time during the meeting it becomes inquorate, then the following provisions apply:
(a)
if the meeting was requisitioned by Members entitled to vote, it shall be cancelled; or
(b)
in any other case, the meeting shall stand adjourned to the same time and place seven days hence, or to such other time or place as is determined by the Directors.
Adjournment
16.4
When a meeting is adjourned to another time and place, unless these Articles otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Company may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.
16.5
A determination of the Members of record entitled to notice of or to vote at a general meeting shall apply to any adjournment of such meeting unless the Directors fix a new record date for the adjourned meeting, but the Directors shall fix a new record date if the meeting is adjourned for more than thirty (30) days from the date set for the original meeting.
Chairman
16.6
The chairman of the board of Directors shall preside as chairman at every general meeting of the Company. If at any meeting the chairman of the board of Directors is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Directors present shall elect one of their number as chairman of the meeting or if all the Directors present decline to take the chair, the Members present shall choose one of their own number to be the chairman of the meeting.
Right of a director or auditor’s representative to attend and speak
16.7
Even if a Director or a representative of the auditor (if any) is not a Member, he shall be entitled to attend and speak at any general meeting and at any separate meeting of Members holding a particular class of Shares.
Method of voting
16.8
All resolutions put to the vote of the meeting shall be decided on a poll. Each Member shall have one vote for each Share he holds which confers the right to receive and vote on a resolution put to the vote of a meeting, unless any Share carries special voting rights.
Taking of a poll
16.9
A poll on any question shall be taken immediately.
16.10
A poll shall be taken in such manner as the chairman directs. He may appoint scrutineers (who need not be Members) and fix a place and time for declaring the result of the poll.
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Chairman does not have casting vote
16.11
In the case of an equality of votes, the chairman of the meeting shall not be entitled to a second or casting vote.
Written resolutions
16.12
For so long as the Onex Shareholders and the Baring Shareholders, collectively, beneficially own (directly or indirectly) Shares representing a majority of the issued and outstanding Shares, Members may pass a resolution in writing without holding a meeting if the following conditions are met:
(a)
all Members entitled to vote must receive (including by way of electronic communication):
(i)
a copy of the resolution; and
(ii)
a statement informing the Members:
(A)
how to signify agreement to the resolution; and
(B)
as to the date by which the resolution must be passed if it is not to lapse (or if no date is given the resolution shall lapse 28 days after the circulation date);
(b)
the specified majority of Members entitled to vote (for which purpose, and for the purposes of Article 95(1C) of the Law, specified majority shall mean the majority of Members who would be required to pass the relevant resolution at a duly convened and held meeting of Members at which all Members were present and voting on a poll):
(i)
sign a document; or
(ii)
sign several documents in the like form each signed by one or more of those Members; and
(c)
the signed document or documents is or are delivered to the Company at the place and by the time nominated by the Company in the notice of the resolution including, if the Company so nominates, by delivery of an Electronic Record by Electronic means to the address specified for that purpose.
Such written resolution shall be as effective as if it had been passed at a meeting of all Members entitled to vote duly convened and held.
16.13
Each Member shall have one vote for each Share he holds which confers the right to receive and vote on a written resolution and unless the resolution in writing signed by the Member is silent, in which case all Shares held are deemed to have been voted, the number of Shares specified in the resolution in writing shall be deemed to have been voted.
16.14
If a written resolution is described as a Special Resolution or as an Ordinary Resolution, it has effect accordingly.
17
Voting rights of members
Right to vote
17.1
Unless their Shares carry no right to vote, or unless an amount presently payable has not been paid, all Members are entitled to vote at a general meeting and all Members holding Shares of a particular class are entitled to vote at a meeting of the holders of that class of Shares (whether present in person or by proxy).
17.2
Members may vote in person or by proxy.
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17.3
A Member who is entitled to vote shall have one vote for each Share he holds, unless any Share carries special voting rights.
17.4
A fraction of a Share carrying the right to vote shall entitle its holder to an equivalent fraction of one vote.
17.5
No Member is bound to vote all its Shares or any of them, nor is he bound to vote each of his Shares in the same way.
17.6
No Member shall be entitled to vote at any general meeting unless all sums presently payable by such Member in respect of Shares in the Company have been paid.
Rights of Joint Holders
17.7
If Shares are held jointly, only one of the Joint Holders may vote. If more than one of the Joint Holders tenders a vote, the vote of the holder whose name in respect of those Shares appears first in the register of members shall be accepted to the exclusion of the votes of the other Joint Holders.
Member with mental disorder
17.8
A Member in respect of whom an order has been made by any court having jurisdiction (whether in the Island or elsewhere) in matters concerning mental disorder may vote by that Member’s receiver, curator bonis or other person authorised or appointed by that court.
17.9
For the purpose of the preceding Article, evidence to the satisfaction of the Directors of the authority of the person claiming to exercise the right to vote must be received not less than 24 hours before holding the relevant meeting or the adjourned meeting in any manner specified for the delivery of forms of appointment of a proxy, whether in writing or by Electronic means. In default, the right to vote shall not be exercisable.
Objections to admissibility of votes
17.10
An objection to the validity of a person’s vote may only be raised at the meeting or at the adjourned meeting at which the vote is sought to be tendered. Any objection duly made shall be referred to the chairman whose decision shall be final and conclusive.
Form of proxy
17.11
An instrument appointing a proxy shall be in any common form or in any other form approved by the Directors. A Member may appoint more than one proxy to attend on the same occasion.
17.12
The instrument must be in writing and signed in one of the following ways:
(a)
by the Member;
(b)
by the Member’s authorised attorney; or
(c)
if the Member is a corporation or other body corporate, under seal or signed by a duly authorised signatory (including an authorised officer, secretary or attorney).
If the Directors so resolve, the Company may accept an Electronic Record of that instrument delivered in the manner specified below and otherwise satisfying the Articles about authentication of Electronic Records.
17.13
The Directors may require the production of any evidence which they consider necessary to determine the validity of any appointment of a proxy.
17.14
A Member may revoke the appointment of a proxy by notice to the Company duly signed in accordance with Article 17.12 prior to the time specified by the Company for the revocation of proxies for the meeting or adjourned meeting, but no earlier than 48 hours prior to the
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meeting; (for which purpose no account shall be taken of any part of a day that is not a working day); but such revocation will not affect the validity of any acts carried out by the proxy before the Directors of the Company had actual notice of the revocation.
How and when proxy is to be delivered
17.15
Subject to the following Articles, the form of appointment of a proxy and any authority under which it is signed, or a copy of the authority certified notarially or in any other way approved by the Directors, must be delivered so that it is received by the Company prior to the time specified by the Company for voting by proxy at the meeting. They must be delivered in either of the following ways:
(a)
in the case of an instrument in writing, it must be left at or sent by post:
(i)
to the registered office of the Company; or
(ii)
to such other place within the Island specified in the notice convening the meeting or in any form of appointment of proxy sent out by the Company in relation to the meeting; or
(b)
if, pursuant to the notice provisions, a notice may be given to the Company in an Electronic Record, an Electronic Record of an appointment of a proxy must be sent to the address specified pursuant to those provisions unless another address for that purpose is specified:
(i)
in the notice convening the meeting;
(ii)
in any form of appointment of a proxy sent out by the Company in relation to the meeting; or
(iii)
in any invitation to appoint a proxy issued by the Company in relation to the meeting.
17.16
Where a poll is taken, the form of appointment of a proxy and any accompanying authority (or an Electronic Record of the same) must be delivered as required under Article 17.15.
17.17
If the form of appointment of proxy is not delivered on time, it is invalid.
Voting by proxy
17.18
A proxy shall have the same voting rights at a meeting or adjourned meeting as the Member would have had except to the extent that the instrument appointing him limits those rights. Notwithstanding the appointment of a proxy, a Member may attend and vote at a meeting or adjourned meeting. If a Member votes on any resolution, a vote by his proxy on the same resolution, unless in respect of different Shares, shall be invalid.
18
Corporations Acting by Representatives at Meeting
18.1
Save where otherwise provided, a corporate Member must act by one or more duly authorised representatives.
18.2
A corporate Member wishing to act by a duly authorised representative must identify that person to the Company by notice in writing.
18.3
The authorisation may be for any period of time, and must be delivered to the Company before the commencement of the meeting at which it is first used.
18.4
The Directors of the Company may require the production of any evidence which they consider necessary to determine the validity of the notice.
18.5
Where a duly authorised representative is present at a meeting that Member is deemed to be present in person, and the acts of the duly authorised representative are personal acts of that Member.
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18.6
A corporate Member may revoke the appointment of a duly authorised representative at any time by notice to the Company, but such revocation will not affect the validity of any acts carried out by the duly authorised representative before the Directors of the Company had actual notice of the revocation.
19
Clearing Houses
If a clearing house or depository (or its nominee) is a Member it may, by resolution of its Directors, other governing body or authorised individual(s) or by power of attorney, authorise such person or persons as it thinks fit to act as its representative or representatives at any general meeting of the Company or at any general meeting of any class of Members; provided that, if more than one person is so authorised, the authorisation shall specify the number and class of Shares in respect of which each such person is so authorised. A person so authorised pursuant to this provision shall be entitled to exercise the same powers on behalf of the clearing house (or its nominee) which he represents as that clearing house (or its nominee) could exercise if it were an individual member of the Company holding the number and class of Shares specified in such authorisation.
20
Directors
20.1
The minimum number of Directors shall be two and the maximum number of Directors shall be fourteen, unless increased or decreased from time to time by the Directors or the Company in general meeting. So long as Shares are listed on the Designated Stock Exchange, the board of Directors shall include such number of  “independent directors” as the relevant rules applicable to the listing of any Shares on the Designated Stock Exchange require (subject to any applicable exceptions for Controlled Companies).
20.2
The Directors shall be divided into three (3) classes designated as Class I, Class II and Class III, respectively. Directors shall initially be assigned to each class in accordance with the Shareholders Agreement and the Director Nomination Agreement. At the first annual general meeting of Members, the term of office of the Class I Directors shall expire and Class I Directors shall be elected for a full term of three (3) years. At the second annual general meeting of Members, the term of office of the Class II Directors shall expire and Class II Directors shall be elected for a full term of three (3) years. At the third annual general meeting of Members, the term of office of the Class III Directors shall expire and Class III Directors shall be elected for a full term of three (3) years. At each succeeding annual general meeting of Members, Directors shall be elected for a full term of three (3) years to succeed the Directors of the class whose terms expire at such annual general meeting. Notwithstanding the foregoing provisions of this Article, each Director shall hold office until the expiration of his term, until his successor shall have been duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of Directors constituting the Directors shall shorten the term of any incumbent Director.
21
Appointment, disqualification and removal of directors
First directors
21.1
The first Directors shall be appointed in writing by the subscriber or subscribers to the Memorandum.
No age limit
21.2
There is no age limit for Directors save that they must be aged at least 18 years.
No corporate directors
21.3
A Director must be a natural person.
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Appointment of directors
21.4
The Directors shall, subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, applicable law and the listing rules of the Designated Stock Exchange, ensure that all individuals (i) nominated by the Barings Shareholders to be Baring Shareholder Designees, (ii) nominated by the Onex Shareholders to be Onex Shareholder Designees and (iii) nominated by the Designated Shareholder to be Designated Shareholder Designees are nominated for election as Directors at the next annual general meeting or extraordinary general meeting called for that purpose and they shall be appointed if approved by way of Ordinary Resolution at such general meeting.
21.5
With respect to any Director seat which the Baring Shareholders, Onex Shareholders and the Designated Shareholder are not entitled to nominate an individual for such seat pursuant to the Shareholders Agreement or the Director Nomination Agreement, the Directors shall have the right to nominate an individual for election as a Director at the next annual general meeting or extraordinary general meeting called for that purpose and they shall be appointed if approved by way of Ordinary Resolution at such general meeting.
21.6
No appointment can cause the number of Directors to exceed the maximum, and any such appointment shall be invalid.
Removal of directors
21.7
A Director may be removed from office by the Members by Special Resolution only for cause (“cause” for removal of a Director shall be deemed to exist only if  (a) the Director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (b) such Director has been found by the affirmative vote of a majority of the Directors then in office at any regular or special meeting of the board of Directors called for that purpose, or by a court of competent jurisdiction, to have been guilty of wilful misconduct in the performance of such Director’s duties to the Company in a matter of substantial importance to the Company; or (c) such Director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, (which mental incompetency directly affects such Director’s ability to perform his or her obligations as a Director) at any time before the expiration of his term notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement); provided that any Director who was nominated for election by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder may be removed with or without cause only by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder (as applicable) that have/has the right to remove such Director pursuant to the Shareholders Agreement or the Director Nomination Agreement (as applicable). In addition, a Director may be removed from office by the board of Directors by resolution made by the Directors for cause.
Filling of vacancies
21.8
A vacancy on the board of Directors may be filled only by the affirmative vote of a simple majority of the remaining Directors present and voting at a meeting of the Directors, subject to these Articles, applicable law and the listing rules of the Designated Stock Exchange, provided that if any vacancy was created by the death, resignation or removal of an Onex Shareholder Designee, Baring Shareholder Designee or Designated Shareholder Designee, then such Director shall only be replaced by the Onex Shareholders, Baring Shareholders or Designated Shareholder (as applicable) that has/have the right to replace such Director pursuant to the Shareholders Agreement or Director Nomination Agreement, and the Directors shall, subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, applicable law and the listing rules of the Designated Stock Exchange, cause the vacancy caused by such death, resignation or removal to be filled, as soon as possible, by a new designee of the Onex Shareholders, the Baring Shareholders or the Designated Shareholder (as applicable) pursuant to the rights set forth in Article 1.4. A
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Director appointed to fill a vacancy in accordance with this Article shall be of the same Class of Director as the Director he or she replaced and the term of such appointment shall terminate in accordance with that Class of Director.
Resignation of directors
21.9
A Director may at any time resign the office by giving to the Company notice in writing or, if permitted pursuant to the notice provisions, in an Electronic Record delivered in either case in accordance with those provisions.
21.10
Unless the notice specifies a different date, the Director shall be deemed to have resigned on the date on which the notice is delivered to the Company.
Corporate governance policies
21.11
The Directors may, from time to time, and except as required by applicable law or the listing rules of the Designated Stock Exchange, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Directors on various corporate governance related matters, as the Directors shall determine by resolution from time to time.
No shareholding qualification
21.12
A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to receive notice of and to attend and speak at general meetings of the Company and all classes of Shares of the Company.
22
Reserved
23
Directors’ Fees and Expenses
23.1
The Directors may receive such remuneration as the Directors may from time to time determine. The Directors may be entitled to be repaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Directors or committees of the Directors or general meetings or separate meetings of any class of securities of the Company or otherwise in connection with the discharge of his duties as a Director.
23.2
Any Director who performs services which in the opinion of the Directors go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Directors may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for, by or pursuant to any other Article.
24
Powers and duties of directors
24.1
Subject to the provisions of the Law, the Memorandum, these Articles and any resolutions made in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company.
24.2
No prior act of the Directors shall be invalidated by any subsequent alteration of the Memorandum or these Articles or any direction given by Special Resolution. However, to the extent allowed by the Law, Members may in accordance with the Law validate any prior or future act of the Directors which would otherwise be in breach of their duties.
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25
Delegation of powers
Power to delegate any of the directors’ powers to a committee
25.1
The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit, subject to Article 25.3; provided that any committee so formed shall include amongst its members at least two Directors unless otherwise required by applicable law or the rules of the Designated Stock Exchange; provided further that no committee shall have the power or authority to (a) recommend to the Members an amendment of these Articles (except that a committee may, to the extent authorised in the resolution or resolutions providing for the issuance of Shares adopted by the Directors as provided under the laws of Jersey, fix the designations and any of the preferences or rights of such Shares relating to dividends, redemption, dissolution, any distribution of assets of the Company or the conversion into, or the exchange of such Shares for, Shares of any other class or classes or any other series of the same or any other class or classes of Shares of the Company); (b) adopt an agreement of merger or consolidation; (c) recommend to the Members the sale, lease or exchange of all or substantially all of the Company’s property and assets; (d) recommend to the Members a dissolution of the Company or a revocation of a dissolution; (e) recommend to the Members an amendment of the Memorandum; or (f) declare a dividend or authorise the issuance of Shares unless the resolution establishing such committee (or the charter of such committee approved by the Directors) permits the committee to so declare or authorize. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.
25.2
Unless otherwise permitted by the Directors, a committee must follow the procedures prescribed for the taking of decisions by Directors.
25.3
To the extent requested by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, each committee of the board of Directors shall include at least one Onex Shareholder Designee, Baring Shareholder Designee and/or Designated Shareholder Designee (as applicable) to the extent required pursuant to the Shareholders Agreement or the Director Nomination Agreement to be appointed as a member of each such committee of the board of Directors unless such designation would violate any legal restrictions on such committee’s composition or the rules of the Designated Stock Exchange (subject in each case to any applicable exceptions, including those for Controlled Companies and any applicable phase-in periods).
Power to appoint an agent of the Company
25.4
The Directors may appoint any person, either generally or in respect of any specific matter, to be the agent of the Company with or without authority for that person to delegate all or any of that person’s powers. The Directors may make that appointment:
(a)
by causing the Company to enter into a power of attorney or agreement; or
(b)
in any other manner they determine.
Power to appoint an attorney or authorised signatory of the Company
25.5
The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretion (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 power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretion vested in him.
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25.6
Any power of attorney or other appointment may contain such provision for the protection and convenience of persons dealing with the attorney or authorised signatory as the Directors think fit. Any power of attorney or other appointment may also authorise the attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in that person.
Management
25.7
The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the following paragraphs shall be without prejudice to the general powers conferred by this paragraph.
25.8
The Directors from time to time and at any time may establish any advisory committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such advisory committees or local boards and may appoint any agents of the Company and may fix the remuneration of any of the aforesaid.
25.9
The Directors from time to time and at any time may delegate to any such advisory committee, local board or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local advisory committee or board, or any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.
25.10
Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretions for the time being vested to them.
25.11
The Directors shall elect, by the affirmative vote of a majority of the Directors then in office, a chairman. The chairman of the board of Directors shall be a Director or an officer of the Company. Subject to the provisions of these Articles and the direction of the Directors, the chairman of the board of Directors shall perform all duties and have all powers which are commonly incident to the position of chairman of a board or which are delegated to him or her by the Directors, preside at all general meetings and meetings of the Directors at which he or she is present and have such powers and perform such duties as the Directors may from time to time prescribe.
26
Disqualification of Directors
26.1
Subject to these Articles, the office of Director shall be vacated, if the Director:
(a)
becomes bankrupt or makes any arrangement or composition with his creditors;
(b)
dies or is found to be or becomes, in the opinion of a registered medical practitioner by whom he is being treated, physically or mentally incapable of acting as a Director;
(c)
resigns his office by notice to the Company in accordance with Articles 21.9 and 21.10;
(d)
is prohibited by applicable law or the Designated Stock Exchange from being a Director;
(e)
without special leave of absence from the Directors, is absent from meetings of the Directors for six consecutive months and the Directors resolve that his office be vacated; or
(f)
is removed from office pursuant to these Articles or any other agreement between the Director and the Company or any of its subsidiaries.
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26.2
If the office of Director is terminated or vacated for any reason, he shall thereupon cease to be a member of any committee of the board of Directors of the Company.
27
Meetings of directors
Regulation of directors’ meetings
27.1
Subject to the provisions of these Articles, the Directors may regulate their proceedings as they think fit.
Calling meetings
27.2
(a) The chairman of the board of Directors, a majority of the Directors or the Secretary on request of a Director or (b) for so long as there are at least four (4) Onex Shareholder Designees, a majority of the Onex Shareholder Designees may at any time summon a meeting of the Directors by twenty-four (24) hour notice to each Director in person, by telephone, facsimile, electronic email, or in such other manner as the Directors may from time to time determine, 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. Notice of a meeting need not be given to any Director (i) who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or (ii) who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Directors. All such waivers, consents, and approvals shall be filed with the corporate records or made part of the minutes of the meeting. A waiver of notice need not specify the purpose of any regular or special meeting of the Directors.
Use of technology
27.3
A Director or Directors may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director or Directors are members, by means of telephone or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at the meeting.
Quorum
27.4
The quorum for the transaction of business at a meeting of Directors (including any adjourned meeting) shall be a majority of the authorised number of Directors, but shall not be less than two. Every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Directors, subject to the provisions of these Articles and other applicable law.
27.5
If a quorum is not present within 15 minutes from the time specified for a meeting of Directors, or if, during a meeting, a quorum ceases to be present, then the meeting shall be adjourned to the same day in the next week at the same time and place or such other day, time and place as the Director(s) calling such meeting may determine.
Voting
27.6
A question which arises at a board meeting shall be decided by a majority of votes. If votes are equal the chairman shall not have a casting vote.
27.7
The continuing Directors 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 may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose.
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Validity
27.8
Anything done at a meeting of Directors is unaffected by the fact that it is later discovered that any person was not properly appointed, or had ceased to be a Director, or was otherwise not entitled to vote.
28
Permissible directors’ interests and disclosure
28.1
Subject to these Articles and the Law, a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration.
28.2
A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested, 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 any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. Any Director who enters into a contract or arrangement or has a relationship that is reasonably likely to be implicated under this Article 28.2 or that would reasonably be likely to affect a Director’s status as an “Independent Director” under applicable law or the rules of the Designated Stock Exchange shall disclose the nature of his or her interest in any such contract or arrangement in which he is interested or any such relationship. Without limiting the generality of the foregoing:
(a)
the Baring Shareholder Designee, the Onex Shareholder Designees and any Designated Shareholder Designee may hold any position of any kind whatsoever with the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and may maintain any interest of any kind whatsoever, whether directly or indirectly, in the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and/or any Owner Opportunity (as defined below) (such positions and/or interests, as the case may be, hereinafter, together, Owner Interests );
(b)
no Owner Interests shall disqualify any Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee from the office of Director, nor shall any contract, transaction or arrangement entered into by or on behalf of the Company in respect of which any Owner Interests may subsist, whether directly or indirectly, be or be liable to be avoided, nor shall any Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee be liable
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to account to the Company for any profit or other gain arising by reason of any Owner Interest and/or any contract, transaction or arrangement entered into by or on behalf of the Company in respect of which any Owner Interest may subsist, whether directly or indirectly;
(c)
each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee shall be at liberty to vote in respect of any contract, transaction or arrangement in which any applicable Owner Interest may subsist, whether directly or indirectly; and
(d)
the Owner Interests shall be deemed to have been disclosed by each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee upon his or her appointment as a Director of the Company and shall be deemed to be sufficient disclosure of the Owner Interests as required under these Articles. Thereafter, it shall not be necessary for a Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee to give special or particularized notice of any Owner Interests in respect of any transaction which may involve the Company.
28.3
To the maximum extent permitted by applicable law:
(a)
the Company renounces and waives:
(i)
any interest or expectancy in, or in being offered or presented with an opportunity to participate in; or
(ii)
any right to be informed of:
any business or corporate opportunity that may from time to time be of interest to or known to or be or have been presented to the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and/or any of their officers, directors, agents, stockholders, members, partners and subsidiaries (including specifically, without limiting the generality of the foregoing, each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee (other than the Chief Executive Officer of the Company, the Executive Chairman of the Company (if any) and any other officer or executive officer of the Company)) (each such opportunity, hereinafter, an Owner Opportunity ) whether or not such Owner Opportunity is or may be pursued by any Baring Shareholder, any Onex Shareholder or any member of the Shareholder Group (as applicable) and or their respective Affiliates and whether or not such Owner Opportunity may be a business or corporate opportunity the Company might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so;
(b)
no Onex Shareholder Designee, Baring Shareholder Designee or Designated Shareholder Designee (other than the Chief Executive Officer of the Company, the Executive Chairman of the Company (if any) and any other officer or executive officer of the Company) (each of such persons, hereinafter, a Relevant Person ) shall:
(i)
be required or be under any duty (whether fiduciary or otherwise) to present to or make known to the Company any Owner Opportunity or refrain from, whether directly or indirectly, pursuing, participating in the pursuit of, exploiting or acquiring, any Owner Opportunity; or
(ii)
be liable to the Company for any breach of any fiduciary or other duty, whether as a Director or otherwise, by reason of the fact that such Relevant Person, whether directly or indirectly, acting in good faith, pursues, participates in the pursuit of, exploits or acquires any Owner Opportunity, directs any Owner Opportunity to another person or fails to present any Owner Opportunity, or information regarding any Owner Opportunity, to the Company;
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unless such Owner Opportunity is, or has been, expressly offered in writing to the Relevant Person solely in their capacity as Director;
(c)
none of the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group nor any of their respective Affiliates has any duty to refrain from engaging or investing directly or indirectly in the same or similar business activities or lines of business as the Company or any of its subsidiaries.
28.4
Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to reasonable expense reimbursement consistent with the Company’s policies in connection with such Director’s service in his official capacity; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.
29
Minutes
29.1
The Directors shall cause minutes to be made in books or loose-leaf folders provided for the purpose of recording:
(a)
all appointments of officers made by the Directors;
(b)
the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and
(c)
all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.
Written resolutions
29.2
The Directors may pass a resolution in writing without holding a meeting if the following conditions are met:
(a)
all Directors are given notice of the resolution;
(b)
the resolution is set out in a document or documents indicating that it is a written resolution;
(c)
all of the Directors:
(i)
sign a document; or
(ii)
sign several documents in the like form each signed by one or more Directors; and
(d)
the signed document or documents is or are delivered to the Company, including, if the Company so nominates by delivery of an Electronic Record, by Electronic means to the address specified for that purpose.
29.3
Such written resolution shall be as effective as if it had been passed at a meeting of the Directors duly convened and held; and it shall be treated as having been passed on the day and at the time that the last Director signs.
30
[Reserved]
31
Record Dates
Except to the extent of any conflicting rights attached to Shares, the Directors may fix any time and date as the record date for declaring or paying a dividend or making or issuing an allotment of Shares. The record date may be before or after the date on which a dividend, allotment or issue is declared, paid or made.
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32
Dividends
Payment of dividends by directors
32.1
Subject to the provisions of the Law, the Directors may pay dividends in accordance with the respective rights of the Members. Any dividend shall not be a debt owed by the Company until such time as payment of the dividend is made.
32.2
In relation to Shares carrying differing rights to dividends or rights to dividends at a fixed rate, the following applies:
(a)
if the Company has different classes of Shares, the Directors may pay dividends on Shares which confer deferred or non-preferred rights with regard to dividends as well as on Shares which confer preferential rights with regard to dividends but no dividend shall be paid on Shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrears;
(b)
subject to the provisions of the Law, the Directors may also pay, at intervals settled by them, any dividend payable at a fixed rate if it appears to them that there are sufficient funds of the Company lawfully available for distribution to justify the payment; and
(c)
if the Directors act in good faith, they shall not incur any liability to the Members holding Shares conferring preferred rights for any loss those Members may suffer by the lawful payment of the dividend on any Shares having deferred or non-preferred rights.
Apportionment of dividends
32.3
Except as otherwise provided by the rights attached to Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares on which the dividend is paid. All dividends shall be apportioned and paid proportionately to the amount paid up on the Shares during the time or part of the time in respect of which the dividend is paid. But if a Share is issued on terms providing that it shall rank for dividend as from a particular date, that Share shall rank for dividend accordingly.
Right of set off
32.4
The Directors may deduct from a dividend or any other amount payable to a person in respect of a Share any amount due by that person to the Company in relation to a Share.
Power to pay other than in cash
32.5
If the Directors so determine, any resolution determining a dividend may direct that it shall be satisfied wholly or partly by the distribution of assets or the issue of Shares. If a difficulty arises in relation to the distribution, the Directors may settle that difficulty in any way they consider appropriate. For example, they may do any one or more of the following:
(a)
issue fractional Shares;
(b)
fix the value of assets for distribution and make cash payments to some Members on the footing of the value so fixed in order to adjust the rights of Members; and
(c)
vest some assets in trustees.
How payments may be made
32.6
A dividend or other monies payable on or in respect of a Share may be paid in any of the following ways:
(a)
if the Member holding that Share or other person entitled to that Share nominates a bank account for that purpose, by wire transfer to that bank account; or
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(b)
by cheque or warrant sent by post to the registered address of the Member holding that Share or other person entitled to that Share.
32.7
For the purpose of Article 32.6(a), the nomination may be in writing or in an Electronic Record and the bank account nominated may be the bank account of another person. For the purpose of Article 32.6(b), subject to any applicable law or regulation, the cheque or warrant shall be made to the order of the Member holding that Share or other person entitled to the Share or to his nominee, whether nominated in writing or in an Electronic Record, and payment of the cheque or warrant shall be a good discharge to the Company.
32.8
If two or more persons are registered as Joint Holders, a dividend (or other amount) payable on or in respect of that Share may be paid as follows:
(a)
to the registered address of the Joint Holder of the Share who is named first on the register of members or to the registered address of the deceased or bankrupt holder, as the case may be; or
(b)
to the address or bank account of another person nominated by the Joint Holders, whether that nomination is in writing or in an Electronic Record.
32.9
Any Joint Holder of a Share may give a valid receipt for a dividend (or other amount) payable in respect of that Share.
Dividends or other monies not to bear interest in absence of special rights
32.10
Unless provided for by the rights attached to a Share, no dividend or other monies payable by the Company in respect of a Share shall bear interest.
Unclaimed Dividends
32.11
All dividends unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Subject to any applicable unclaimed property or other laws, any dividend unclaimed after a period of ten (10) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Directors of any unclaimed dividend or other sums payable on or in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof.
33
Accounts and audits
Accounting and other records
33.1
The Directors must ensure that proper accounting and other records are kept, and that accounts and associated reports are distributed in accordance with the requirements of the Law.
No automatic right of inspection
33.2
Except as provided in Article 14.1, the Directors shall from time to time 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 applicable law or authorised by the Directors.
Sending of accounts and reports
33.3
The Company’s accounts and associated Directors’ report and auditor’s report (if any) that are required or permitted to be sent to any person pursuant to any law shall be treated as properly sent to that person if:
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(a)
they are sent to that person in accordance with the notice provisions in Article 39; or
(b)
they are published on a website providing that person is given separate notice of:
(i)
the fact that the documents have been published on the website;
(ii)
the address of the website;
(iii)
the place on the website where the documents may be accessed; and
(iv)
how they may be accessed.
33.4
If, for any reason, a person notifies the Company that he is unable to access the website, the Company must, as soon as practicable, send the documents to that person by any other means permitted by these Articles. This, however, will not affect when that person is taken to have received the documents under Article 33.5.
Time of receipt if documents are published on a website
33.5
Documents sent by being published on a website in accordance with the preceding two Articles are only treated as sent at least 14 clear days before the date of the meeting at which they are to be laid if:
(a)
the documents are published on the website throughout a period beginning at least 14 clear days before the date of the meeting and ending with the conclusion of the meeting; and
(b)
the person is given at least 14 clear days’ notice of the meeting.
Validity despite accidental error in publication on website
33.6
If, for the purpose of a meeting, documents are sent by being published on a website in accordance with the preceding Articles, the proceedings at that meeting are not invalidated merely because by accident:
(a)
those documents are published in a different place on the website to the place notified; or
(b)
they are published for only part of the period from the date of notification until the conclusion of that meeting.
When accounts are to be audited
33.7
The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited.
34
Audit
34.1
The Directors or, if authorised to do so, the audit committee of the Directors, may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration.
34.2
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 of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.
35
Seal
Company seal
35.1
The Company may have a seal if the Directors so determine.
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Official seal
35.2
Subject to the provisions of the Law, the Company may also have:
(a)
an official seal or seals for use in any place or places outside the Island. Each such official seal shall be a facsimile of the original seal of the Company but shall have added on its face the name of the country, territory or place where it is to be used or the words “branch seal”; and
(b)
an official seal for use only in connection with the sealing of securities issued by the Company and such official seal shall be a copy of the common seal of the Company but shall in addition bear the word “securities”.
When and how seal is to be used
35.3
A seal may only be used by the authority of the Directors. Unless the Directors otherwise determine, a document to which a seal is affixed must be signed in one of the following ways:
(a)
by a Director and the Secretary; or
(b)
by a single Director.
If no seal is adopted or used
35.4
If the Directors do not adopt a seal, or a seal is not used, a document may be executed in the following manner:
(a)
by a Director and the Secretary; or
(b)
by a single Director; or
(c)
by any other person authorised by the Directors; or
(d)
in any other manner permitted by the Law.
Power to allow non-manual signatures and facsimile printing of seal
35.5
The Directors may determine that either or both of the following applies:
(a)
that the seal or a duplicate seal need not be affixed manually but may be affixed by some other method or system of reproduction; and/or
(b)
that a signature required by these Articles need not be manual but may be a mechanical or Electronic Signature.
Validity of execution
35.6
If a document is duly executed and delivered by or on behalf of the Company, it shall not be regarded as invalid merely because, at the date of the delivery, the Secretary, or the Director, or other Officer or person who signed the document or affixed the seal for and on behalf of the Company ceased to be the Secretary or hold that office and authority on behalf of the Company.
36
Officers
36.1
Subject to these Articles, the Directors may from time to time appoint any person, whether or not a Director of the Company, to hold the office of the chairman of the board of Directors (which, pursuant to the Director Nomination Agreement, shall be the Executive Chairman of the Company except as otherwise provided therein), the Chief Executive Officer, the President, the Chief Financial Officer, one or more Vice Presidents or such other Officers as
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the Directors may think necessary for the administration of the Company, for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit.
36.2
The appointee must consent in writing to holding that office.
36.3
Any appointment of a Director to an executive office shall terminate if he ceases to be a Director but without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such Director.
36.4
Where a chairman is appointed he shall, unless unable to do so, preside at every meeting of Directors.
36.5
If there is no chairman, or if the chairman is unable to preside at a meeting, that meeting may select its own chairman or the Directors may nominate one of their number to act in place of the chairman should he ever not be available.
36.6
Subject to the provisions of the Law and Article 36.7, the Directors may also appoint any person, who need not be a Director, as Secretary, for such period and on such terms, including as to remuneration, as they think fit.
36.7
The Secretary must consent in writing to holding that office.
36.8
A Director, Secretary or other Officer of the Company may not hold office, or perform the services, of auditor.
37
Register of Directors and Officers
The Company shall cause to be kept in one or more books at its office a Register of Directors in which there shall be entered the full names and addresses of the Directors and such other particulars as required by the Law.
38
Capitalisation of profits
Capitalisation of profits or of any stated capital account or capital redemption reserve
Subject to the Law and these Articles, the Directors may capitalise any sum standing to the credit of any of the Company’s reserve accounts (including a stated capital account or a capital redemption reserve) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of Shares becoming distributable in fractions. The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.
39
Notices
Form of notices
39.1
Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the person entitled to give notice to any Member either personally, by facsimile or by sending it through the post in a prepaid letter or via a recognised courier service, fees prepaid, addressed to the Member at his address as appearing in the Register of Members or, to the extent permitted by all applicable laws and regulations, by electronic
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means by transmitting it to any electronic number or address or website supplied by the Member to the Company or by placing it on the Company’s Website, provided that, (i) with respect to notification via electronic means, the Company has obtained the Member’s prior express positive confirmation in writing to receive or otherwise have made available to him notices in such fashion, and (i) with respect to posting to Company’s Website, notification of such posting is provided to such Member. In the case of Joint Holders of a Share, all notices shall be given to that one of the Joint Holders whose name stands first in the Register of Members in respect of the joint holding, and notice so given shall be sufficient notice to all the Joint Holders.
39.2
An affidavit of the mailing or other means of giving any notice of any general meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the Company giving the notice, shall be prima facie evidence of the giving of such notice.
39.3
Any Member present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.
Signatures
39.4
A written notice shall be signed when it is autographed by or on behalf of the giver, or is marked in such a way as to indicate its execution or adoption by the giver.
39.5
An Electronic Record may be signed by an Electronic Signature.
Evidence of transmission
39.6
A notice given by Electronic Record shall be deemed sent if an Electronic Record is kept demonstrating the time, date and content of the transmission, and if no notification of failure to transmit is received by the giver.
39.7
A notice given in writing shall be deemed sent if the giver can provide proof that the envelope containing the notice was properly addressed, pre-paid and posted, or that the written notice was otherwise properly transmitted to the recipient.
Delivery of notices
39.8
Any notice or other document, if served by (a) post, shall be deemed to have been served when the letter containing the same is posted, or (b) facsimile, shall be deemed to have been served upon confirmation of successful transmission, or (c) recognised courier service, shall be deemed to have been served when the letter containing the same is delivered to the courier service and in proving such service it shall be sufficient to provide that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier, or (d) electronic means as provided herein shall be deemed to have been served and delivered on the day on which it is successfully transmitted or at such later time as may be prescribed by any applicable laws or regulations.
Giving notice to a deceased or bankrupt Member
39.9
Any notice or document delivered or sent to any Member in accordance with the terms of these Articles shall notwithstanding that such Member be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Member as sole or Joint Holder, unless his name shall at the time of the service of the notice or document, have been removed from the Register of Members as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the Share.
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Saving provisions
39.10
A Member present, either in person or by proxy, at any general meeting or at any meeting of the Members holding any class of Shares shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.
39.11
Every person who becomes entitled to a Share shall be bound by any notice in respect of that Share which, before his name is entered in the register of members, has been duly given to a person from which he derives his title.
39.12
None of the preceding notice provisions shall derogate from the Articles about the delivery of written resolutions of Directors and written resolutions of Members.
40
Authentication of Electronic Records
Application of Articles
40.1
Without limitation to any other provision of these Articles, any notice, written resolution or other document under these Articles that is sent by Electronic means by a Member, or by the Secretary, or by a Director or other Officer of the Company, shall be deemed to be authentic if either Article 40.2 or Article 40.4 applies.
Authentication of documents sent by Members by Electronic means
40.2
An Electronic Record of a notice, written resolution or other document sent by Electronic means by or on behalf of one or more Members shall be deemed to be authentic if the following conditions are satisfied:
(a)
the Member or each Member, as the case may be, signed the original document, and for this purpose original document includes several documents in like form signed by one or more of those Members;
(b)
the Electronic Record of the original document was sent by Electronic means by, or at the direction of, that Member to an address specified in accordance with these Articles for the purpose for which it was sent; and
(c)
Article 40.7 does not apply.
40.3
For example, where a sole Member signs a resolution and sends the Electronic Record of the original resolution, or causes it to be sent, by facsimile transmission to the address in these Articles specified for that purpose, the facsimile copy shall be deemed to be the written resolution of that Member unless Article 40.7 applies.
Authentication of document sent by the Secretary or Officers by Electronic means
40.4
An Electronic Record of a notice, written resolution or other document sent by or on behalf of the Secretary or an Officer or Officers of the Company shall be deemed to be authentic if the following conditions are satisfied:
(a)
the Secretary or the Officer or each Officer, as the case may be, signed the original document, and for this purpose original document includes several documents in like form signed by the Secretary or one or more of those Officers;
(b)
the Electronic Record of the original document was sent by Electronic means by, or at the direction of, the Secretary or that Officer to an address specified in accordance with these Articles for the purpose for which it was sent; and
(c)
Article 40.7 does not apply.
This Article applies whether the document is sent by or on behalf of the Secretary or Officer in his own right or as a representative of the Company.
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40.5
For example, where a sole Director signs a resolution and scans the resolution, or causes it to be scanned, as a PDF version which is attached to an email sent to the address in these Articles specified for that purpose, the PDF version shall be deemed to be the written resolution of that Director unless Article 40.7 applies.
Manner of signing
40.6
For the purposes of these Articles about the authentication of Electronic Records, a document will be taken to be signed if it is signed manually or in any other manner permitted by these Articles.
Saving provision
40.7
A notice, written resolution or other document under these Articles will not be deemed to be authentic if the recipient, acting reasonably:
(a)
believes that the signature of the signatory has been altered after the signatory had signed the original document;
(b)
believes that the original document, or the Electronic Record of it, was altered, without the approval of the signatory, after the signatory signed the original document; or
(c)
otherwise doubts the authenticity of the Electronic Record of the document;
and the recipient promptly gives notice to the sender setting the grounds of its objection. If the recipient invokes this Article, the sender may seek to establish the authenticity of the Electronic Record in any way the sender thinks fit.
41
Information
41.1
No Member, as such, shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or other confidential or proprietary information related to the conduct of the business of the Company and which in the opinion of the Directors would not be in the interests of the members of the Company to communicate to the public.
41.2
The Directors shall be entitled (but not required, except as provided by law) to release or disclose any information in their possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register of Members and transfer books of the Company.
42
Indemnity
Indemnity
42.1
To the fullest extent permitted by law, the Company shall indemnify every Director and Officer of the Company or any predecessor to the Company (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former Officer of the Company or any predecessor to the Company, and the successors and assigns of each of the foregoing, and may indemnify any person (other than current and former Directors and Officers) (any such Director or Officer, an Indemnified Person ), 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 in connection with the Company other than such liability (if any) that they may incur by reason of their own actual fraud or wilful default. No Indemnified Person shall 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 or wilful default of such Indemnified Person. No person shall be found to have committed actual
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fraud or wilful default under this Article unless or until a court of competent jurisdiction shall have made a finding to that effect. Each Member agrees to waive any claim or right of action he or she might have, whether individually or by or in the right of the Company, against any Indemnified Person on account of any action taken by such Indemnified Person, or the failure of such Indemnified Person to take any action in the performance of his duties with or for the Company; provided that such waiver shall not extend to any matter in respect of any actual fraud or wilful default which may attach to such Indemnified Person.
42.2
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 returned to the Company (without interest) by the Indemnified Person.
42.3
The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other Officer of the Company 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.
42.4
Neither any amendment nor repeal of these Articles set forth under this heading of Indemnity (the Indemnification Articles ), nor the adoption of any provision of these Articles or Memorandum of Association inconsistent with the Indemnification Articles, shall eliminate or reduce the effect of the Indemnification Articles, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for these Indemnification Articles, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
43
Financial Year
Unless the Directors otherwise prescribe, the financial year of the Company shall begin on January 1 in each year and shall end on December 31 in such year.
44
Winding up
Distribution of assets in specie
44.1
If the Company is wound up, the liquidator or the Directors, as the case may be, shall, subject to these Articles and any other sanction required by the Law, apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:
(a)
if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the number of Shares held by them; or
(b)
if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the number of Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company.
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44.2
If the Company is wound up, the liquidator or the Directors, as the case may be, subject to the rights attaching to any Shares and with the sanction of a Special Resolution of the Company and any other sanction required by the Law, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator or the Directors, as the case may be, may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.
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Dated the [         ] day of  [         ] 2019.
Signed for and on behalf of Onex Partners IV LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general partner
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
Print name
Signed for and on behalf of Onex Partners IV GP LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP Limited, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
Print name
Witness to above signatures
   
Signature
[Address]
   
   
Print name
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Annex A-2​
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to Agreement and Plan of Merger (this “ Amendment ”), dated as of February 26, 2019, is entered into by and among Churchill Capital Corp, a Delaware corporation (“ Acquiror ”), Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (“ Holdings ”), Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey (the “ Company ”), CCC Merger Sub, Inc., a Delaware corporation (“ Delaware Merger Sub ”), and Camelot Merger Sub (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey (“ Jersey Merger Sub ”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement (as defined below).
WITNESSETH:
WHEREAS , Acquiror, Holdings, the Company, Delaware Merger Sub and Jersey Merger Sub are parties to the Agreement and Plan of Merger, dated as of January 14, 2019 (the “ Agreement ”); and
WHEREAS , the parties desire to amend the Agreement as set forth herein to memorialize certain agreements reached by the parties.
NOW THEREFORE , in consideration of the premises and agreements herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
SECTION 1.01. Amendments .
(a) Each reference to “1,645,890.01” in Section 1.01 and Section 5.06 of the Agreement and in Schedule 5.06(a) of the Merger Agreement is hereby replaced with “1,646,223.01”.
(b) Schedule 1.01(b) of the Merger Agreement is hereby amended to increase the “Legal & Consulting Fees” line item (and, as a result, the “Total CCC Transaction Fees & Expenses” summary line item) by $500,000.
(c) Schedule 5.06(a) of the Merger Agreement is hereby further amended to replace the reference to “10,890.00” to “11,223.00”. The parties further acknowledge that the supplement to Schedule 5.06 of the Merger Agreement should reflect the 333 Company Shares held by the three Company Employees disclosed by the Company to Acquiror prior to the date hereof.
SECTION 1.02. Authorization . Each party hereby represents to the other parties hereto that this Amendment has been duly authorized, executed and delivered by such party in accordance with Section 13.10 of the Agreement and constitutes a valid and binding obligation of such party enforceable against such party in accordance with its terms.
SECTION 1.03. Miscellaneous .
(a) After giving effect to this Amendment, references in (x) the Agreement, (y) the Schedules to the Agreement and (z) each ancillary agreement to the Agreement to “this Agreement”, “the Agreement”, the “Merger Agreement”, “hereof”, “hereunder” or words of like import referring to the Agreement shall be deemed to refer to the Agreement as amended by this Amendment, in each case, unless the context otherwise requires.
(b) Except as amended hereby, the Agreement shall remain in full force and effect. Nothing herein shall affect, modify or limit any waiver or consent granted by any party pursuant to the Agreement.
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(c) This Amendment may be executed in counterparts which together shall constitute a single agreement.
(d) This Amendment shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
[Signature pages follow.]
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IN WITNESS WHEREOF , the parties have hereunto caused this Amendment to be duly executed as of the date hereof.
CHURCHILL CAPITAL CORP
By:   
   
Name:
Title:
[Signature Page to Amendment No. 1 to Merger Agreement]
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CLARIVATE ANALYTICS PLC
By:   
   
Name:
Title:
CAMELOT HOLDINGS (JERSEY) LIMITED
By:   
   
Name:
Title:
CCC MERGER SUB, INC.
By:   
   
Name:
Title:
CAMELOT MERGER SUB (JERSEY) LIMITED
By:   
   
Name:
Title:
[Signature Page to Amendment No. 1 to Merger Agreement]
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Annex B​
Dated [           ] 2019
Companies (Jersey) Law 1991
   
Company Limited by Shares
AMENDED AND RESTATED Memorandum of
Association
of
Clarivate Analytics PLC
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Companies (Jersey) Law 1991
   
Company Limited by Shares
   
Amended and Restated
   
Memorandum of Association
   
of
   
Clarivate Analytics PLC
1.
The name of the Company is Clarivate Analytics PLC.
2.
The Company is a public company limited by shares.
3.
The Company is a no par value company.
4.
The Company has unrestricted corporate capacity.
5.
The liability of each member arising from his or her holding of a share is limited to the amount (if any) unpaid on it.
6.
There is no limit on the number of shares of any class which the Company is authorised to issue.

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We, the subscribers to this memorandum of association, wish to form a company in accordance with this memorandum; and we agree to take the number of shares in the capital of the Company shown below.
Dated the [         ] day of  [         ], 2019
Signed for and on behalf of Onex Partners IV LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
Print name
Print name
Number of shares: 1
Signed for and on behalf of Onex Partners IV GP LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP Limited, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
Print name
Number of shares: 1
Witness to above signatures
   
Signature
[Address]
   
   
Print name

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Dated [           ], 2019
Companies (Jersey) Law 1991
   
Company Limited by Shares
AMENDED AND RESTATED
Articles of Association
of
Clarivate Analytics PLC
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Companies (Jersey) Law 1991
   
Company Limited by Shares
   
Amended and Restated
   
Articles of Association
   
of
   
Clarivate Analytics PLC
1
Definitions, interpretation and exclusion of Standard Table
Definitions
1.1
In these Articles, unless otherwise defined, the defined terms shall have the meanings assigned to them as follows:
Affiliate means:
(a)
in the case of a natural person, such person’s parents, parents-in-law, spouse, children or grandchildren, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by such person or any of the foregoing, and
(b)
in the case of a corporation, partnership or other entity or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity.
The term control shall mean the ownership, directly or indirectly, of shares possessing more than fifty per cent (50%) of the voting power of the corporation, or the partnership or other entity (other than, in the case of a corporation, shares having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity; provided that the Company and its subsidiaries shall not be considered Affiliates of the Onex Shareholders, the Baring Shareholders or the Designated Shareholder.
Articles means, as appropriate:
(a)
these Articles of Association as amended from time to time; or
(b)
two or more particular Articles of these Articles;
and Article refers to a particular Article of these Articles;
Baring Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Baring Shareholders pursuant to the Shareholders Agreement;
Baring Shareholders means the Baring Shareholders, as such term is defined in the Shareholders Agreement;
Business Day means a day, excluding Saturdays or Sundays, on which banks in New York, New York, United States of America and the Island are open for general banking business throughout their normal business hours;
Commission means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act;
Company means the above-named company;
Company’s Website means the website of the Company, the address or domain name of which has been notified to Members;
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Controlled Company has the meaning given to it in the rules of the Designated Stock Exchange;
Default Rate means 3% (three per cent) per annum over the base rate of the Bank of England from time to time;
Designated Shareholder means the Designated Shareholder, as such term is defined in the Director Nomination Agreement;
Designated Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Designated Shareholder pursuant to the relevant Director Nomination Agreement;
Designated Stock Exchange means the New York Stock Exchange or any other stock exchange or automated quotation system on which the Company’s securities are then traded;
Director Nomination Agreement means the director nomination agreement to be entered into by and between the Company and the Designated Shareholder, as amended from time to time;
Directors means the directors of the Company for the time being, or as the case may be, the Directors assembled as a board or as a committee thereof;
Dividend means any dividend (whether interim or final) resolved to be paid on Shares pursuant to these Articles;
Electronic has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
electronic communication means electronic transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than a majority vote of the Directors;
Electronic Record has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
Electronic Signature has the meaning given to that term in the Electronic Communications (Jersey) Law 2000;
Exchange Act means the United States Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
Exemption Order means the Companies (Transfers of Shares – Exemptions) (Jersey) Order 2014;
Fully Paid and Paid Up means that the agreed issue price for a Share has been fully paid or credited as paid in money or money’s worth;
Island means Jersey, Channel Islands;
Joint Holders means two or more persons registered as the holders of a Share or Shares or who are jointly entitled to a Share or Shares by reason of the death or bankruptcy of the registered holder.
Law means the Companies (Jersey) Law 1991;
Market Price means for any given day, the price quoted in respect of the Ordinary Shares on the Designated Stock Exchange of the close of trading on such day, or if such day is not a date on which the Designated Stock Exchange is open, then the close of trading on the previous trading day;
Member means any person or persons entered on the register of members from time to time as the holder of a Share;
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Memorandum means the Memorandum of Association of the Company as amended from time to time;
month means a calendar month;
Nominating Member means (i) the Member providing the notice of the nomination proposed to be made at a general meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at any general meeting is made, and (iii) any affiliate or associate of such stockholder or beneficial owner;
Officer means a person appointed to hold an office in the Company; and the expression includes a director or liquidator, but does not include the Secretary;
Onex Shareholder Designee means an individual elected to the board of Directors that has been nominated by the Onex Shareholders pursuant to the Shareholders Agreement;
Onex Shareholders means the Onex Shareholders, as such term is defined in the Shareholders Agreement;
Ordinary Resolution means a resolution of a duly constituted general meeting of the Company passed by a simple majority of the votes cast by, or on behalf of, the Members entitled to vote. The expression also includes a written resolution signed by or on behalf of a simple majority of the Members who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting;
Ordinary Shares means an Ordinary Share in the capital of the Company of no par value designated as Ordinary Shares, and having the rights provided for in these Articles;
PDF means Portable Document Format;
Preferred Shares means shares in the capital of the Company of no par value designated as Preferred Shares, and having the rights provided for in these Articles;
Register of Members means the register maintained by the Company in accordance with Article 41 of the Law or any modification or re-enactment thereof for the time being in force;
Registered Office means the registered office for the time being of the Company;
Regulations means the Companies (Uncertificated Securities) (Jersey) Order 1999 including any modification or re-enactment of them for the time being in force;
Seal means the common seal of the Company including any facsimile thereof;
Secretary means a person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary;
Securities Act means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
Share means a share in the share capital of the Company, and the expression:
(a)
includes stock (except where a distinction between shares and stock is expressed or implied); and
(c)
where the context permits, also includes a fraction of a share;
Shareholder Group has the meaning given in the Director Nomination Agreement.
Shareholders Agreement means the Amended and Restated Shareholders Agreement to be entered into by and among the Company, the Onex Shareholders, the Baring Shareholders and the other parties thereto, as amended from time to time;
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signed means a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a person with the intent to sign the electronic communication;
Special Resolution has the meaning given to that term in the Law. The expression also includes a written resolution signed by or on behalf of the requisite majority of Members required for the passing of a Special Resolution who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting;
subsidiary has the meaning given to that term in Article 2 of the Law;
Treasury Share means a share held in the name of the Company as a treasury share in accordance with the Law; and
year means a calendar year.
Interpretation
1.2
In these Articles, save where the context requires otherwise:
(a)
words importing the singular number shall include the plural number and vice versa;
(b)
words importing the masculine gender only ( i.e. , he and his ) shall include the feminine gender ( i.e. , her and hers ) and shall include references to entities without gender ( i.e. , it and its );
(c)
a reference to a person includes, as appropriate, a company, trust, partnership, joint venture, association, body corporate or government agency;
(d)
may shall be construed as permissive and “shall” shall be construed as imperative;
(e)
a reference to a dollar or dollars (or $) is a reference to dollars of the United States of America;
(f)
references to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force;
(g)
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;
(h)
written and in writing means all modes of representing or reproducing words in visible form, including in the form of an electronic record and any requirements as to delivery under these Articles include delivery in the form of an electronic record; where used in connection with a notice served by the Company on Members or other persons entitled to receive notices hereunder, such writing shall also include a record maintained in an electronic medium which is accessible in visible form so as to be useable for subsequent reference;
(i)
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;
(j)
the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share;
(k)
headings are inserted for convenience only and do not affect the interpretation of these Articles, unless there is ambiguity;
(l)
where a word or phrase is given a defined meaning, another part of speech or grammatical form in respect to that word or phrase has a corresponding meaning; and
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(m)
all references to time are to be calculated by reference to time in the place where the Company’s registered office is located.
Exclusion of Standard Table
1.3
The regulations contained in the Standard Table adopted pursuant to the Companies (Standard Table) (Jersey) Order 1992 and any other regulations contained in any statute or subordinate legislation are expressly excluded and do not apply to the Company.
Shareholders Agreement and Director Nomination Agreement
1.4
Notwithstanding any provision of these Articles to the contrary, each of the Onex Shareholders, the Baring Shareholders and the Designated Shareholder shall have the respective rights set forth in the Shareholders Agreement or the Director Nomination Agreement, as applicable.
2
Shares
Power to issue Shares and options, with or without special rights
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), the Directors may, in their absolute discretion and without approval of the holders of Ordinary Shares, allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise, any or all of which may be greater than the powers and rights associated with the Ordinary Shares, to such persons, at such times and on such other terms as they think proper, which shall be conclusively evidenced by their approval of the terms thereof, and may also (subject to the Law and these Articles) vary such rights.
2.2
The Company shall not issue Shares in bearer form and shall only issue Shares as fully paid.
Power to issue fractions of a Share
2.3
Subject to the Law, the Company may issue fractions of a Share of any class. A fraction of a Share shall be subject to and carry the corresponding fraction of liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a Share of that class of Shares.
Capital contributions without issue of further Shares
2.4
With the consent of a Member, the Directors may accept a voluntary contribution from that Member without issuing Shares in return. If the Directors agree to accept a voluntary contribution from a Member, the Directors shall resolve whether that contribution shall be treated as an addition to the stated capital account of the Company or to a general reserve of the Company (it being understood that the contribution is not provided by way of loan).
Limit on the number of Joint Holders
2.5
In respect of a Share, the Company shall not be required to enter the names of more than four Joint Holders in the register of members of the Company.
2.6
If two or more persons are registered as Joint Holders of a Share, then any one of those Joint Holders may give effectual receipts for moneys payable in respect of that Share.
Treasury Shares
2.7
From time to time, the Company may hold its own Shares as treasury shares and the Directors may sell, transfer or cancel any treasury shares in accordance with the Law. For the avoidance of doubt, the Company shall not be entitled to vote or receive any distributions in respect of any treasury shares held by it.
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3
Ordinary Shares
3.1
The holders of the Ordinary Shares shall be:
(a)
entitled to dividends in accordance with the relevant provisions of these Articles;
(b)
entitled to and are subject to the provisions in relation to winding up of the Company provided for in these Articles; and
(c)
entitled to attend general meetings of the Company and shall be entitled to one vote for each Ordinary Share registered in the name of such holder in the Register of Members, both in accordance with the relevant provisions of these Articles.
3.2
All Ordinary Shares shall rank pari passu with each other in all respects.
4
Preferred Shares
4.1
Preferred Shares may be issued from time to time in one or more series, each of such series to have such voting powers (full or limited or without voting powers), designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed, or in any resolution or resolutions providing for the issue of such series adopted by the Directors as hereinafter provided.
4.2
Authority is hereby granted to the Directors, subject to the provisions of the Memorandum, these Articles and applicable law, to create one or more series of Preferred Shares and, with respect to each such series, to fix by resolution or resolutions, without any further vote or action by the Members of the Company providing for the issue of such series:
(a)
the number of Preferred Shares to constitute such series and the distinctive designation thereof;
(b)
the dividend rate on the Preferred Shares of such series, the dividend payment dates, the periods in respect of which dividends are payable ( Dividend Periods ), whether such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate;
(c)
whether the Preferred Shares of such series shall be convertible into, or exchangeable for, Shares of any other class or classes or any other series of the same or any other class or classes of Shares and the conversion price or prices or rate or rates, or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided in such resolution or resolutions;
(d)
the preferences, if any, and the amounts thereof, which the Preferred Shares of such series shall be entitled to receive upon the winding up of the Company;
(e)
the voting power, if any, of the Preferred Shares of such series;
(f)
transfer restrictions and rights of first refusal with respect to the Preferred Shares of such series; and
(g)
such other terms, conditions, special rights and provisions as may seem advisable to the Directors.
4.3
Notwithstanding the fixing of the number of Preferred Shares constituting a particular series upon the issuance thereof, the Directors at any time thereafter may authorise the issuance of additional Preferred Shares of the same series subject always to the Law and the Memorandum.
4.4
No dividend shall be declared and set apart for payment on any series of Preferred Shares in respect of any Dividend Period unless there shall likewise be or have been paid, or declared and set apart for payment, on all Preferred Shares of each other series entitled to cumulative
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dividends at the time outstanding which rank senior or equally as to dividends with the series in question, dividends rateably in accordance with the sums which would be payable on the said Preferred Shares through the end of the last preceding Dividend Period if all dividends were declared and paid in full.
4.5
If, upon the winding up of the Company, the assets of the Company distributable among the holders of any one or more series of Preferred Shares which (a) are entitled to a preference over the holders of the Ordinary Shares upon such winding up and (b) rank equally in connection with any such distribution shall be insufficient to pay in full the preferential amount to which the holders of such Preferred Shares shall be entitled, then such assets, or the proceeds thereof, shall be distributed among the holders of each such series of the Preferred Shares rateably in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full.
5
Register of Members and share certificates
Issue of share certificates
5.1
The Company shall maintain or cause to be maintained the Register of Members in accordance with the Law.
5.2
Subject to and to the extent permitted by the Law, the Company, or the Directors on behalf of the Company, may cause to be kept and maintained in any country, territory or place, a branch register of Members resident in such country, territory or place, and the Company may, or the Directors on behalf of the Company may, make and vary such regulations as it or they may think fit regarding the keeping of any such branch register.
5.3
Upon being entered in the register of members as the holder of a Share, a Member shall, subject to Article 5.8, be entitled:
(a)
without payment, to one certificate for all the Shares of each class held by that Member (and, upon transferring a part of the Member’s holding of Shares of any class, to a certificate for the balance of that holding); and
(b)
upon payment of such reasonable sum as the Directors may determine for every certificate after the first, to several certificates each for one or more of that Member’s Shares.
5.4
Every certificate shall specify the number, class and distinguishing numbers (if any) of the Shares to which it relates and whether they are Fully Paid or partly paid up. A certificate may be executed under seal or executed in such other manner as the Directors determine.
5.5
The Company shall not be bound to issue more than one certificate for Shares held jointly by several persons and delivery of a certificate for a Share to one Joint Holder shall be a sufficient delivery to all of them.
5.6
All certificates for Shares shall be delivered personally or sent through the post addressed to the member entitled thereto at the Member’s registered address as appearing in the Register of Members. Every share 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 share certificate lost or delayed in the course of delivery.
Renewal of lost or damaged share certificates
5.7
If a share certificate is defaced, worn-out, lost or destroyed, it may be renewed on such terms (if any) as to:
(a)
evidence;
(b)
indemnity;
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(c)
payment of the expenses reasonably incurred by the Company in investigating the evidence; and
(d)
payment of a reasonable fee, if any, for issuing a replacement share certificate;
as the Directors may determine, and (in the case of defacement or wearing-out) on delivery to the Company of the old certificate.
Uncertificated shares
5.8
Subject to Article 5.9, at any time the Shares are listed on the Designated Stock Exchange (provided that the Designated Stock Exchange remains an “approved stock exchange” (as defined in the Exemption Order)), the Company shall not be required to (although may, in its absolute discretion choose to), provide a share certificate in accordance with Article 5.3.
5.9
Following a written request at any time from a Member to the Company requesting a share certificate in respect of Shares held by that Member, the Company shall, within 2 months of receipt by the Company of that written request, complete and have ready for delivery the certificate of such Shares in respect of which the request was made unless the conditions of allotment of the Shares otherwise provide.
6
Reserved
7
Transfer of shares
Form of transfer
7.1
Subject to these Articles (including Article 7.8), any agreement between a Member and the Company, and the rules or regulations of the Designated Stock Exchange or any relevant securities laws (including, but not limited to the Exchange Act), any Member may transfer all or any of his Shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Directors acting reasonably 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.
7.2
The instrument of transfer shall be executed by or on behalf of the transferor. Without prejudice to the last preceding Article, the Directors may also resolve, either generally or in any particular case, upon request by the transferor or transferee to accept mechanically executed transfers. The transferor shall be deemed to remain the holder of the Share until the name of the transferee in entered into the Register of Members in respect thereof.
Power to refuse registration
7.3
The Directors may decline to recognise any instrument of transfer unless:
(a)
the instrument of transfer is in respect of only one class of Share;
(b)
the instrument of transfer is lodged at the Registered Office or such other place as the Register of Members is kept in accordance with the Law accompanied by the relevant share certificate(s) (if any) or such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and
(c)
the instrument of transfer is duly and properly signed and endorsed or accompanied by the share certificates in respect of the relevant Shares or an indemnity.
Notice of refusal to register
7.4
If the Directors refuse to register a transfer of a Share, they must send notice of their refusal to the existing Member within two months after the date on which the transfer was lodged with the Company.
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Fee, if any, payable for registration
7.5
If the Directors so decide, the Company may charge a reasonable fee for the registration of any instrument of transfer or other document relating to the title to a Share.
Company may retain instrument of transfer
7.6
The Company shall be entitled to retain any instrument of transfer which is registered; but an instrument of transfer which the Directors refuse to register shall be returned to the person lodging it when notice of the refusal is given.
Transfer to branch register
7.7
The Directors in so far as permitted by any applicable law and rules of the Designated Stock Exchange may, in their absolute discretion, at any time and from time to time transfer any Share upon the Register of Members to any branch register or any Share on any branch register to the Register of Members or any other branch register. In the event of any such transfer, the Member requesting such transfer shall bear the cost of effecting such transfer unless the Directors otherwise determine.
Holding of Shares through Direct Registration System
7.8
At any time any of the Shares are listed on the Designated Stock Exchange (provided that the Designated Stock Exchange remains an approved stock exchange (as defined in the Exemption Order)), a transfer of such Shares is exempt from the provisions of Article 42(1) of the Law requiring an instrument of transfer to be delivered to the Company where the following conditions are met in respect of such transfer:
(a)
the transfer is made:
(i)
to or from an approved central securities depository (as defined in the Exemption Order), or
(ii)
by means of a computer system (as defined in the Exemption Order); and
(b)
the transfer is in accordance with the relevant laws (as defined in the Exemption Order) applicable to, and relevant rules and regulations of, the Designated Stock Exchange.
8
Redemption, Purchase and Surrender of Shares, Treasury Shares
8.1
Subject to the provisions, if any, in these Articles, the Memorandum, applicable law, including the Law, and the rules of the Designated Stock Exchange, the Company may:
(a)
issue Shares on terms that they are to be redeemed or are liable to be redeemed at the option of the Company or the Member on such terms and in such manner as the Directors may, before the issue of such Shares, determine; and
(b)
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, provided that the manner of purchase is in accordance with any applicable requirements imposed from time to time by the Commission or the Designated Stock Exchange.
8.2
The Company may make a payment in respect of the redemption or purchase of Shares in any manner authorised by the Law, including out of capital, profits or the proceeds of a fresh issue of Shares.
8.3
The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.
8.4
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).
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Power to pay for redemption or purchase in cash or in specie
8.5
When making a payment in respect of the redemption or purchase of Shares, the Directors may make the payment in cash or in specie (or partly in one way and partly in the other way).
Effect of redemption or purchase of a Share
8.6
Upon the date of redemption or purchase of a Share:
(a)
the Member holding that Share shall cease to be entitled to any rights in respect of the Share other than the right to receive:
(i)
the applicable payment for the Share; and
(ii)
any dividend declared in respect of the Share prior to the date of redemption or purchase;
(b)
the Member’s name shall be removed from the Register of Members with respect to the Share; and
(c)
the Share shall be cancelled or become a Treasury Share.
For the purpose of this Article, the date of redemption or purchase is the date when the redemption or purchase occurs.
9
Variation of Rights Attaching to Shares
9.1
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 sanction of a resolution passed by a majority of not less than two thirds of the votes cast 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 one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.
9.2
For the purposes of a separate class meeting, 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 in priority to or pari passu therewith.
10
Commission on Sale of Shares
The Company may, in so far as the Law permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful.
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11
Non-Recognition of Trusts
Except as required by law:
(a)
no person shall be recognised by the Company as holding any Share on any trust; and
(b)
no person other than the Member shall be recognised by the Company as having any right in a Share.
12
Transmission of Shares
Persons entitled on death of a Member
12.1
If a Member dies, the survivor or survivors (where he was a Joint Holder) or his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder.
Registration of transfer of a Share following death or bankruptcy
12.2
Any person becoming entitled to a Share in consequence of the death or bankruptcy, 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 him to the Company, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy, liquidation or dissolution, as the case may be.
Indemnity
12.3
The Directors may require a person registered as a Member by reason of the death or bankruptcy of another Member to indemnify the Company and the Directors against any loss or damage suffered by the Company or the Directors as a result of that registration.
Rights of person entitled to a Share following death or bankruptcy
12.4
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 he would be entitled if he were the holder of such Share. However, he 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 himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline registration as they would have had in the case of a transfer of the Share by the relevant Member before his 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 ninety 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.
13
Alteration of capital
Increasing, consolidating, converting, dividing and cancelling share capital
13.1
To the fullest extent permitted by the Law, the Company may by Special Resolution do any of the following (and amend its Memorandum and its Articles for that purpose):
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(a)
increase or reduce the number of Shares that it is authorised to issue;
(b)
consolidate all or any of the Shares (whether issued or not) into fewer shares; or
(c)
divide all or any of the Shares (whether issued or not) into more shares.
13.2
All new Shares created hereunder shall be subject to the same provisions with reference to the payment of liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital.
Reducing share capital
13.3
Subject to the Law and to any rights for the time being conferred on the Members holding a particular class of Shares, the Company may, by Special Resolution, reduce its share capital in any way.
Sale of fractions of Shares
13.4
Whenever, as a result of a consolidation or division of Shares, any Members would become entitled to fractions of a Share, the Directors may, in their absolute discretion, on behalf of those Members, sell the Shares representing the fractions for (i) the Market Price on the date of such consolidation or division, in the case of any shares listed on a Designated Stock Exchange, and (ii) the best price reasonably obtainable by the Company, in the case of any shares not listed on a Designated Stock Exchange, and distribute the net proceeds of sale in due proportion among those Members, and the Directors may authorise (and the relevant Member hereby authorises) any person to execute an instrument of transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the Shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
14
Closing Register of Members or Fixing Record Date
14.1
The Directors shall prepare, or cause to be prepared, at least ten (10) days before every general meeting, a complete list of the Members entitled to vote at such meeting, arranged in alphabetical order, and showing the address of each Member and the number of Shares registered in the name of each Member. Such list shall be open to the examination of any Member, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the principal executive office of the Company. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Member who is present.
14.2
The Directors, in accordance with the Law, may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, attend or to vote at a meeting of the Members or any adjournment thereof, or for the purpose of determining those Members that are entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.
14.3
If no record date is fixed for the determination of Members entitled to receive notice of, attend or to vote at a meeting of Members or those Members that are entitled to receive payment of a Dividend or other distribution, the record date for such determination of Members shall be, subject to the Law, at the close of business on the Business Day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the Business Day next preceding the day on which the meeting is held. When a determination of those Members that are entitled to receive notice of, attend or vote at a meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.
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15
General Meetings
Power to call meetings
15.1
The Directors may call a general meeting at any time.
15.2
If there are insufficient Directors to constitute a quorum and the remaining Directors are unable to agree on the appointment of additional Directors, the Directors must call a general meeting for the purpose of appointing additional Directors.
15.3
The Directors must also call a general meeting if requisitioned in the manner set out in the next two Articles.
15.4
The requisition must be in writing and given by one or more Members who together hold at least 10% of the rights to vote at such general meeting.
15.5
The requisition must also:
(a)
specify the objects of the meeting;
(b)
be signed by or on behalf of the requisitioners. The requisition may consist of several documents in like form signed by one or more of the requisitioners; and
(c)
be deposited at the Company’s registered office in accordance with the notice provisions.
15.6
Should the Directors fail to call a general meeting within 21 days from the date of deposit of a requisition to be held within 2 months of that date, the requisitioners or any of them representing more than one half of the total voting rights of all of them, may call a general meeting to be held within three months from that date.
15.7
Without limitation to the foregoing, if there are insufficient Directors to constitute a quorum and the remaining Directors are unable to agree on the appointment of additional Directors, any one or more Members who together hold at least 10% of the rights to vote at a general meeting may call a general meeting for the purpose of considering the business specified in the notice of meeting which shall include as an item of business the appointment of additional Directors.
15.8
If the Members call a meeting under the above Articles, the Company shall reimburse their reasonable expenses.
Annual general meetings
15.9
The Company shall hold annual general meetings unless otherwise dispensed with in accordance with the Law. The first annual general meeting shall be held within a period of 18 months of the Company’s incorporation and thereafter at least once in every calendar year. Not more than 18 months may elapse between one annual general meeting and the next.
Content of notice
15.10
Notice of a general meeting shall specify each of the following:
(a)
the place, the date and the time of the meeting;
(b)
if the meeting is to be held in two or more places, the technology that will be used to facilitate the meeting;
(c)
subject to Articles 15.10(d) and 15.20, the general nature of the business to be transacted;
(d)
if a resolution is proposed as a Special Resolution, the text of that resolution; and
(e)
in the case of an annual general meeting, that the meeting is an annual general meeting.
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15.11
In each notice, there shall appear with reasonable prominence the following statements:
(a)
that a Member who is entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of that Member; and
(b)
that a proxy need not be a Member.
Period of notice
15.12
A general meeting, including an annual general meeting, shall be called by at least 14 clear days’ notice (but not more than sixty (60) calendar days’ notice). A meeting, however, may be called on shorter notice if it is so agreed:
(a)
in the case of an annual general meeting, by all the Members entitled to attend and vote at that meeting; and
(b)
in the case of any other meeting, by a majority in number of the Members having a right to attend and vote at that meeting, being a majority together holding not less than:
(i)
95% where a Special Resolution is to be considered; or
(ii)
90% for all other meetings;
of the total voting rights of the Members who have that right.
Persons entitled to receive notice
15.13
Subject to the provisions of these Articles and to any restrictions imposed on any Shares, the notice shall be given to the following people:
(a)
the Members;
(b)
persons entitled to a Share in consequence of the death or bankruptcy of a Member;
(c)
the Directors;
(d)
the Company’s auditor (if any); and
(e)
persons entitled to vote in respect of a Share in consequence of the incapacity of a Member.
Publication of notice on a website
15.14
Subject to the Law, a notice of a general meeting may be published on a website providing the recipient is given separate notice of:
(a)
the publication of the notice on the website;
(b)
the address of the website;
(c)
the place on the website where the notice may be accessed;
(d)
how it may be accessed; and
(e)
the place, date and time of the general meeting.
15.15
If a Member notifies the Company that he is unable for any reason to access the website, the Company must as soon as practicable give notice of the meeting to that Member in writing or by any other means permitted by these Articles but this will not affect when that Member is deemed to have been given notice of the meeting.
Time a website notice is deemed to be given
15.16
A website notice is deemed to be given when the Member is given notice of its publication.
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Required duration of publication on a website
15.17
Where the notice of meeting is published on a website, it shall continue to be published in the same place on that website from the date of the notification until the conclusion of the meeting to which the notice relates.
Accidental omission to give notice or non-receipt of notice
15.18
Proceedings at a meeting shall not be invalidated by the following:
(a)
an accidental failure to give notice of the meeting or an instrument of proxy to any person entitled to notice; or
(b)
non-receipt of notice of the meeting or an instrument of proxy by any person entitled to notice.
15.19
In addition, where a notice of meeting is published on a website, proceedings at the meeting shall not be invalidated merely because it is accidentally published:
(a)
in a different place on the website; or
(b)
for only part of the period from the date of the notification until the conclusion of the meeting to which the notice relates.
Notice of other business
15.20
No business may be transacted at any general meeting, other than business that is either (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Directors (or any duly authorised committee thereof) or pursuant to a requisition of a meeting by Members in accordance with Article 15.3, (B) otherwise properly brought before an annual general meeting by or at the direction of the Directors (or any duly authorised committee thereof) or (C) otherwise properly brought before an annual general meeting by any Member of the Company who (1) is a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting and (2) complies with the notice procedures set forth in this Article.
(a)
In addition to any other applicable requirements, for business to be brought properly before an annual general meeting by a Member, such Member must have given timely notice thereof in proper written form to the Secretary of the Company and comply with Article 15.20(c) and (f).
(b)
All notices of general meetings shall be sent or otherwise given in accordance with this Article not less than fourteen (14) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and (i) in the case of an extraordinary general meeting, the purpose or purposes for which the meeting is called (no business other than that specified in the notice may be transacted) or (ii) in the case of the annual general meeting, those matters which the Directors, at the time of giving the notice, intend to present for action by the members (but any proper matter may be presented at the meeting for such action). The notice of any meeting at which Directors are to be elected shall include the name of any nominee or nominees who, at the time of the notice, the Directors intend to present for election.
(c)
For matters other than for the nomination for election of a Director to be made by a Member, to be timely such Member’s notice shall be delivered to the Company at the principal executive offices of the Company not less than ninety (90) days and not more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual general meeting; provided, however, that if the Company’s annual general meeting occurs on a date more than thirty (30) days earlier or later than the Company’s prior year’s annual general meeting, then the Directors shall
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determine a date a reasonable period prior to the Company’s annual general meeting by which date the Members notice must be delivered and publicise such date in a filing pursuant to the Exchange Act, or via press release. Such publication shall occur at least fourteen (14) days prior to the date set by the Directors. Subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, as applicable, the Onex Shareholders, the Baring Shareholders and the Designated Shareholder shall have the right (but not the obligation) to nominate at any time the persons to be elected to the board of Directors which the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, as applicable, are entitled to nominate to the board of Directors pursuant to the terms of the Shareholders Agreement or the Director Nomination Agreement, as applicable, in accordance with the provisions of these Articles for the election of Directors.
(d)
To be in proper written form, a Member’s notice to the Company must set forth as to such matter such Member proposes to bring before the annual general meeting:
(i)
a reasonably brief description of the business desired to be brought before the annual general meeting, including the text of the proposal or business, and the reasons for conducting such business at the annual general meeting;
(ii)
the name and address, as they appear on the Company’s Register of Members, of the Member proposing such business and any Member Associated Person (as defined below);
(iii)
the class or series and number of Shares of the Company that are held of record or are beneficially owned by such Member or any Member Associated Person and any derivative positions held or beneficially held by the Member or any Member Associated Person;
(iv)
whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of such Member or any Member Associated Person with respect to any securities of the Company, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such Member or any Member Associated Person with respect to any securities of the Company;
(v)
any material interest of the Member or a Member Associated Person in such business, including a reasonably detailed description of all agreements, arrangements and understandings between or among any of such Members or between or among any proposing Members and any other person or entity (including their names) in connection with the proposal of such business by such Member; and
(vi)
a statement as to whether such Member or any Member Associated Person will deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s voting Shares required under applicable law and the rules of the Designated Stock Exchange to carry the proposal.
For purposes of this Article 15.20(d), a Member Associated Person of any Member shall mean (x) any Affiliate of, or person acting in concert with, such Member; (y) any beneficial owner of Shares of the Company owned of record or beneficially by such Member and on whose behalf the proposal or nomination, as the case may be, is being made; or (z) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (x) and (y).
(e)
In addition to any other applicable requirements and subject to Article 1.4, for a nomination for election of a Director to be made by a Member of the Company
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(other than Directors to be nominated by any series of Preferred Shares, voting separately as a class), such Member must (i) be a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting; (ii) on each such date beneficially own more than 15% of the issued Ordinary Shares (unless otherwise provided in the Exchange Act or the rules and regulations of the Commission); and (iii) have given timely notice thereof in proper written form to the Secretary of the Company. If a Member is entitled to vote only for a specific class or category of Directors at a meeting of the Members, such Member’s right to nominate one or more persons for election as a Director at the meeting shall be limited to such class or category of Directors.
(f)
To be timely for purposes of Article 15.20(e), a Member’s notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than ninety (90) nor more than one hundred twenty (120) days prior to the meeting; provided, however, that in the event less than one hundred thirty (130) days’ notice or prior public disclosure of the date of the meeting is given or made to Members, notice by the Member to be timely must be so received not later than the close of business on the tenth (10 th ) day following the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made.
(g)
To be in proper written form for purposes of Article 15.20(f), a Member’s notice to the Secretary must set forth:
(i)
as to each Nominating Member:
(A)
the information that is requested in Article 15.20(d)(ii)-(d)(vi); and
(B)
any other information relating to such Member that would be required to be disclosed pursuant to any applicable law and rules of the Commission or of the Designated Stock Exchange; and
(ii)
as to each person whom the Member proposes to nominate for election as a Director:
(A)
all information that would be required by Article 15.20(d)(ii)-(d)(vi) if such nominee was a Nominating Member, except such information shall also include the business address and residence address of the person;
(B)
the principal occupation or employment of the person;
(C)
all information relating to such person that is required to be disclosed in solicitations of proxies for appointment of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act or any successor provisions thereto, and any other information relating to the person that would be required to be disclosed pursuant to any applicable law and rules of the Commission or of the Designated Stock Exchange; and
(D)
a description of all direct and indirect compensation and other material monetary arrangements and understandings during the past three years, and any other material relationship, between or among any Nominating Member and its Affiliates and associates, on the one hand, and each proposed nominee, his respective Affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K of the Exchange Act if such Nominating Member were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant.
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Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a Director if elected. The Company may require any proposed nominee to furnish such other information as may be reasonably required by the Company to determine the eligibility of such proposed nominee to serve as an independent Director of the Company in accordance with the rules of the Designated Stock Exchange.
(h)
Unless otherwise provided by (i) the terms of these Articles, (ii) any series of Preferred Shares or (iii) the agreements set forth in Article 15.20(c) or (iv) any other agreement among Members or other agreement, in the case of this clause (iv), approved by the Directors, only persons who are nominated in accordance with the procedures set forth above, shall be eligible to serve as Directors. If the chairman of a general meeting determines that a proposed nomination was not made in compliance with these Articles, he or she shall declare to the general meeting that nomination is defective and such defective nomination shall be disregarded. Notwithstanding the foregoing provisions of these Articles, if the Nominating Member (or a qualified representative of the Nominating Member) does not appear at the general meeting to present the nomination, such nomination shall be disregarded.
(i)
Notwithstanding anything herein to the contrary, the Onex Shareholders, the Baring Shareholders and the Designated Shareholder, as applicable, shall not be required to comply with the advance notice or 15% ownership threshold requirements, as applicable, set forth in Articles 15.20(c) and 15.20(e) for so long as the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, as applicable, are entitled to nominate one or more Directors pursuant to the Shareholders Agreement or the Board Nomination Agreement, as applicable, but shall provide any such notice to the Company at least fourteen (14) days prior to the applicable general meeting.
15.21
The Directors will ensure that the Onex Shareholder Designees, the Baring Shareholder Designees and the Designated Shareholder Designees nominated in accordance with Article 1.4 are included in the notice of meeting for the next available annual general meeting or any extraordinary general meeting at which Directors are to be elected, noting that a general meeting will only be the next available annual general meeting if the advance notice requirements of these Articles can be complied with.
15.22
Subject to the other provisions of these Articles, the Company may by Ordinary Resolution appoint any person to be a Director.
15.23
Subject to these Articles, a Director shall hold office until the expiry of his or her term as contemplated by Article 20.2 or, until such time as he or she vacates office in accordance with Article 26.1.
15.24
No person shall be eligible for election as a Director of the Company unless nominated in accordance with the procedures set forth in this Article. If the chairman of an annual general meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. This Article 15 shall not apply to any nomination of a Director (a) in an election in which only the holders of one or more series of Preferred Shares of the Company are entitled to vote (unless otherwise provided in the terms of such series of Preferred Shares) or (b) pursuant to Article 21.4.
16
Proceedings at meetings of Members
Quorum
16.1
No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. Members holding in aggregate not
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less than a simple majority of all voting share capital of the Company in issue present in person or by proxy and entitled to vote shall be a quorum, provided that the minimum quorum for any meeting shall be two Members entitled to vote.
Use of technology
16.2
A person may not participate at a general meeting by conference telephone or other communications equipment.
Lack of quorum
16.3
If a quorum is not present within 15 minutes of the time appointed for the meeting, or if at any time during the meeting it becomes inquorate, then the following provisions apply:
(a)
if the meeting was requisitioned by Members entitled to vote, it shall be cancelled; or
(b)
in any other case, the meeting shall stand adjourned to the same time and place seven days hence, or to such other time or place as is determined by the Directors.
Adjournment
16.4
When a meeting is adjourned to another time and place, unless these Articles otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Company may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.
16.5
A determination of the Members of record entitled to notice of or to vote at a general meeting shall apply to any adjournment of such meeting unless the Directors fix a new record date for the adjourned meeting, but the Directors shall fix a new record date if the meeting is adjourned for more than thirty (30) days from the date set for the original meeting.
Chairman
16.6
The chairman of the board of Directors shall preside as chairman at every general meeting of the Company. If at any meeting the chairman of the board of Directors is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Directors present shall elect one of their number as chairman of the meeting or if all the Directors present decline to take the chair, the Members present shall choose one of their own number to be the chairman of the meeting.
Right of a director or auditor’s representative to attend and speak
16.7
Even if a Director or a representative of the auditor (if any) is not a Member, he shall be entitled to attend and speak at any general meeting and at any separate meeting of Members holding a particular class of Shares.
Method of voting
16.8
All resolutions put to the vote of the meeting shall be decided on a poll. Each Member shall have one vote for each Share he holds which confers the right to receive and vote on a resolution put to the vote of a meeting, unless any Share carries special voting rights.
Taking of a poll
16.9
A poll on any question shall be taken immediately.
16.10
A poll shall be taken in such manner as the chairman directs. He may appoint scrutineers (who need not be Members) and fix a place and time for declaring the result of the poll.
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Chairman does not have casting vote
16.11
In the case of an equality of votes, the chairman of the meeting shall not be entitled to a second or casting vote.
Written resolutions
16.12
For so long as the Onex Shareholders and the Baring Shareholders, collectively, beneficially own (directly or indirectly) Shares representing a majority of the issued and outstanding Shares, Members may pass a resolution in writing without holding a meeting if the following conditions are met:
(a)
all Members entitled to vote must receive (including by way of electronic communication):
(i)
a copy of the resolution; and
(ii)
a statement informing the Members:
(A)
how to signify agreement to the resolution; and
(B)
as to the date by which the resolution must be passed if it is not to lapse (or if no date is given the resolution shall lapse 28 days after the circulation date);
(b)
the specified majority of Members entitled to vote (for which purpose, and for the purposes of Article 95(1C) of the Law, specified majority shall mean the majority of Members who would be required to pass the relevant resolution at a duly convened and held meeting of Members at which all Members were present and voting on a poll):
(i)
sign a document; or
(ii)
sign several documents in the like form each signed by one or more of those Members; and
(c)
the signed document or documents is or are delivered to the Company at the place and by the time nominated by the Company in the notice of the resolution including, if the Company so nominates, by delivery of an Electronic Record by Electronic means to the address specified for that purpose.
Such written resolution shall be as effective as if it had been passed at a meeting of all Members entitled to vote duly convened and held.
16.13
Each Member shall have one vote for each Share he holds which confers the right to receive and vote on a written resolution and unless the resolution in writing signed by the Member is silent, in which case all Shares held are deemed to have been voted, the number of Shares specified in the resolution in writing shall be deemed to have been voted.
16.14
If a written resolution is described as a Special Resolution or as an Ordinary Resolution, it has effect accordingly.
17
Voting rights of members
Right to vote
17.1
Unless their Shares carry no right to vote, or unless an amount presently payable has not been paid, all Members are entitled to vote at a general meeting and all Members holding Shares of a particular class are entitled to vote at a meeting of the holders of that class of Shares (whether present in person or by proxy).
17.2
Members may vote in person or by proxy.
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17.3
A Member who is entitled to vote shall have one vote for each Share he holds, unless any Share carries special voting rights.
17.4
A fraction of a Share carrying the right to vote shall entitle its holder to an equivalent fraction of one vote.
17.5
No Member is bound to vote all its Shares or any of them, nor is he bound to vote each of his Shares in the same way.
17.6
No Member shall be entitled to vote at any general meeting unless all sums presently payable by such Member in respect of Shares in the Company have been paid.
Rights of Joint Holders
17.7
If Shares are held jointly, only one of the Joint Holders may vote. If more than one of the Joint Holders tenders a vote, the vote of the holder whose name in respect of those Shares appears first in the register of members shall be accepted to the exclusion of the votes of the other Joint Holders.
Member with mental disorder
17.8
A Member in respect of whom an order has been made by any court having jurisdiction (whether in the Island or elsewhere) in matters concerning mental disorder may vote by that Member’s receiver, curator bonis or other person authorised or appointed by that court.
17.9
For the purpose of the preceding Article, evidence to the satisfaction of the Directors of the authority of the person claiming to exercise the right to vote must be received not less than 24 hours before holding the relevant meeting or the adjourned meeting in any manner specified for the delivery of forms of appointment of a proxy, whether in writing or by Electronic means. In default, the right to vote shall not be exercisable.
Objections to admissibility of votes
17.10
An objection to the validity of a person’s vote may only be raised at the meeting or at the adjourned meeting at which the vote is sought to be tendered. Any objection duly made shall be referred to the chairman whose decision shall be final and conclusive.
Form of proxy
17.11
An instrument appointing a proxy shall be in any common form or in any other form approved by the Directors. A Member may appoint more than one proxy to attend on the same occasion.
17.12
The instrument must be in writing and signed in one of the following ways:
(a)
by the Member;
(b)
by the Member’s authorised attorney; or
(c)
if the Member is a corporation or other body corporate, under seal or signed by a duly authorised signatory (including an authorised officer, secretary or attorney).
If the Directors so resolve, the Company may accept an Electronic Record of that instrument delivered in the manner specified below and otherwise satisfying the Articles about authentication of Electronic Records.
17.13
The Directors may require the production of any evidence which they consider necessary to determine the validity of any appointment of a proxy.
17.14
A Member may revoke the appointment of a proxy by notice to the Company duly signed in accordance with Article 17.12 prior to the time specified by the Company for the revocation of proxies for the meeting or adjourned meeting, but no earlier than 48 hours prior to the
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meeting; (for which purpose no account shall be taken of any part of a day that is not a working day); but such revocation will not affect the validity of any acts carried out by the proxy before the Directors of the Company had actual notice of the revocation.
How and when proxy is to be delivered
17.15
Subject to the following Articles, the form of appointment of a proxy and any authority under which it is signed, or a copy of the authority certified notarially or in any other way approved by the Directors, must be delivered so that it is received by the Company prior to the time specified by the Company for voting by proxy at the meeting. They must be delivered in either of the following ways:
(a)
in the case of an instrument in writing, it must be left at or sent by post:
(i)
to the registered office of the Company; or
(ii)
to such other place within the Island specified in the notice convening the meeting or in any form of appointment of proxy sent out by the Company in relation to the meeting; or
(b)
if, pursuant to the notice provisions, a notice may be given to the Company in an Electronic Record, an Electronic Record of an appointment of a proxy must be sent to the address specified pursuant to those provisions unless another address for that purpose is specified:
(i)
in the notice convening the meeting;
(ii)
in any form of appointment of a proxy sent out by the Company in relation to the meeting; or
(iii)
in any invitation to appoint a proxy issued by the Company in relation to the meeting.
17.16
Where a poll is taken, the form of appointment of a proxy and any accompanying authority (or an Electronic Record of the same) must be delivered as required under Article 17.15.
17.17
If the form of appointment of proxy is not delivered on time, it is invalid.
Voting by proxy
17.18
A proxy shall have the same voting rights at a meeting or adjourned meeting as the Member would have had except to the extent that the instrument appointing him limits those rights. Notwithstanding the appointment of a proxy, a Member may attend and vote at a meeting or adjourned meeting. If a Member votes on any resolution, a vote by his proxy on the same resolution, unless in respect of different Shares, shall be invalid.
18
Corporations Acting by Representatives at Meeting
18.1
Save where otherwise provided, a corporate Member must act by one or more duly authorised representatives.
18.2
A corporate Member wishing to act by a duly authorised representative must identify that person to the Company by notice in writing.
18.3
The authorisation may be for any period of time, and must be delivered to the Company before the commencement of the meeting at which it is first used.
18.4
The Directors of the Company may require the production of any evidence which they consider necessary to determine the validity of the notice.
18.5
Where a duly authorised representative is present at a meeting that Member is deemed to be present in person, and the acts of the duly authorised representative are personal acts of that Member.
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18.6
A corporate Member may revoke the appointment of a duly authorised representative at any time by notice to the Company, but such revocation will not affect the validity of any acts carried out by the duly authorised representative before the Directors of the Company had actual notice of the revocation.
19
Clearing Houses
If a clearing house or depository (or its nominee) is a Member it may, by resolution of its Directors, other governing body or authorised individual(s) or by power of attorney, authorise such person or persons as it thinks fit to act as its representative or representatives at any general meeting of the Company or at any general meeting of any class of Members; provided that, if more than one person is so authorised, the authorisation shall specify the number and class of Shares in respect of which each such person is so authorised. A person so authorised pursuant to this provision shall be entitled to exercise the same powers on behalf of the clearing house (or its nominee) which he represents as that clearing house (or its nominee) could exercise if it were an individual member of the Company holding the number and class of Shares specified in such authorisation.
20
Directors
20.1
The minimum number of Directors shall be two and the maximum number of Directors shall be fourteen, unless increased or decreased from time to time by the Directors or the Company in general meeting. So long as Shares are listed on the Designated Stock Exchange, the board of Directors shall include such number of  “independent directors” as the relevant rules applicable to the listing of any Shares on the Designated Stock Exchange require (subject to any applicable exceptions for Controlled Companies).
20.2
The Directors shall be divided into three (3) classes designated as Class I, Class II and Class III, respectively. Directors shall initially be assigned to each class in accordance with the Shareholders Agreement and the Director Nomination Agreement. At the first annual general meeting of Members, the term of office of the Class I Directors shall expire and Class I Directors shall be elected for a full term of three (3) years. At the second annual general meeting of Members, the term of office of the Class II Directors shall expire and Class II Directors shall be elected for a full term of three (3) years. At the third annual general meeting of Members, the term of office of the Class III Directors shall expire and Class III Directors shall be elected for a full term of three (3) years. At each succeeding annual general meeting of Members, Directors shall be elected for a full term of three (3) years to succeed the Directors of the class whose terms expire at such annual general meeting. Notwithstanding the foregoing provisions of this Article, each Director shall hold office until the expiration of his term, until his successor shall have been duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of Directors constituting the Directors shall shorten the term of any incumbent Director.
21
Appointment, disqualification and removal of directors
First directors
21.1
The first Directors shall be appointed in writing by the subscriber or subscribers to the Memorandum.
No age limit
21.2
There is no age limit for Directors save that they must be aged at least 18 years.
No corporate directors
21.3
A Director must be a natural person.
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Appointment of directors
21.4
The Directors shall, subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, applicable law and the listing rules of the Designated Stock Exchange, ensure that all individuals (i) nominated by the Barings Shareholders to be Baring Shareholder Designees, (ii) nominated by the Onex Shareholders to be Onex Shareholder Designees and (iii) nominated by the Designated Shareholder to be Designated Shareholder Designees are nominated for election as Directors at the next annual general meeting or extraordinary general meeting called for that purpose and they shall be appointed if approved by way of Ordinary Resolution at such general meeting.
21.5
With respect to any Director seat which the Baring Shareholders, Onex Shareholders and the Designated Shareholder are not entitled to nominate an individual for such seat pursuant to the Shareholders Agreement or the Director Nomination Agreement, the Directors shall have the right to nominate an individual for election as a Director at the next annual general meeting or extraordinary general meeting called for that purpose and they shall be appointed if approved by way of Ordinary Resolution at such general meeting.
21.6
No appointment can cause the number of Directors to exceed the maximum, and any such appointment shall be invalid.
Removal of directors
21.7
A Director may be removed from office by the Members by Special Resolution only for cause (“cause” for removal of a Director shall be deemed to exist only if  (a) the Director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (b) such Director has been found by the affirmative vote of a majority of the Directors then in office at any regular or special meeting of the board of Directors called for that purpose, or by a court of competent jurisdiction, to have been guilty of wilful misconduct in the performance of such Director’s duties to the Company in a matter of substantial importance to the Company; or (c) such Director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, (which mental incompetency directly affects such Director’s ability to perform his or her obligations as a Director) at any time before the expiration of his term notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement); provided that any Director who was nominated for election by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder may be removed with or without cause only by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder (as applicable) that have/has the right to remove such Director pursuant to the Shareholders Agreement or the Director Nomination Agreement (as applicable). In addition, a Director may be removed from office by the board of Directors by resolution made by the Directors for cause.
Filling of vacancies
21.8
A vacancy on the board of Directors may be filled only by the affirmative vote of a simple majority of the remaining Directors present and voting at a meeting of the Directors, subject to these Articles, applicable law and the listing rules of the Designated Stock Exchange, provided that if any vacancy was created by the death, resignation or removal of an Onex Shareholder Designee, Baring Shareholder Designee or Designated Shareholder Designee, then such Director shall only be replaced by the Onex Shareholders, Baring Shareholders or Designated Shareholder (as applicable) that has/have the right to replace such Director pursuant to the Shareholders Agreement or Director Nomination Agreement, and the Directors shall, subject to the terms of the Shareholders Agreement and the Director Nomination Agreement, applicable law and the listing rules of the Designated Stock Exchange, cause the vacancy caused by such death, resignation or removal to be filled, as soon as possible, by a new designee of the Onex Shareholders, the Baring Shareholders or the Designated Shareholder (as applicable) pursuant to the rights set forth in Article 1.4. A
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Director appointed to fill a vacancy in accordance with this Article shall be of the same Class of Director as the Director he or she replaced and the term of such appointment shall terminate in accordance with that Class of Director.
Resignation of directors
21.9
A Director may at any time resign the office by giving to the Company notice in writing or, if permitted pursuant to the notice provisions, in an Electronic Record delivered in either case in accordance with those provisions.
21.10
Unless the notice specifies a different date, the Director shall be deemed to have resigned on the date on which the notice is delivered to the Company.
Corporate governance policies
21.11
The Directors may, from time to time, and except as required by applicable law or the listing rules of the Designated Stock Exchange, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Directors on various corporate governance related matters, as the Directors shall determine by resolution from time to time.
No shareholding qualification
21.12
A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to receive notice of and to attend and speak at general meetings of the Company and all classes of Shares of the Company.
22
Reserved
23
Directors’ Fees and Expenses
23.1
The Directors may receive such remuneration as the Directors may from time to time determine. The Directors may be entitled to be repaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Directors or committees of the Directors or general meetings or separate meetings of any class of securities of the Company or otherwise in connection with the discharge of his duties as a Director.
23.2
Any Director who performs services which in the opinion of the Directors go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Directors may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for, by or pursuant to any other Article.
24
Powers and duties of directors
24.1
Subject to the provisions of the Law, the Memorandum, these Articles and any resolutions made in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company.
24.2
No prior act of the Directors shall be invalidated by any subsequent alteration of the Memorandum or these Articles or any direction given by Special Resolution. However, to the extent allowed by the Law, Members may in accordance with the Law validate any prior or future act of the Directors which would otherwise be in breach of their duties.
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25
Delegation of powers
Power to delegate any of the directors’ powers to a committee
25.1
The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit, subject to Article 25.3; provided that any committee so formed shall include amongst its members at least two Directors unless otherwise required by applicable law or the rules of the Designated Stock Exchange; provided further that no committee shall have the power or authority to (a) recommend to the Members an amendment of these Articles (except that a committee may, to the extent authorised in the resolution or resolutions providing for the issuance of Shares adopted by the Directors as provided under the laws of Jersey, fix the designations and any of the preferences or rights of such Shares relating to dividends, redemption, dissolution, any distribution of assets of the Company or the conversion into, or the exchange of such Shares for, Shares of any other class or classes or any other series of the same or any other class or classes of Shares of the Company); (b) adopt an agreement of merger or consolidation; (c) recommend to the Members the sale, lease or exchange of all or substantially all of the Company’s property and assets; (d) recommend to the Members a dissolution of the Company or a revocation of a dissolution; (e) recommend to the Members an amendment of the Memorandum; or (f) declare a dividend or authorise the issuance of Shares unless the resolution establishing such committee (or the charter of such committee approved by the Directors) permits the committee to so declare or authorize. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.
25.2
Unless otherwise permitted by the Directors, a committee must follow the procedures prescribed for the taking of decisions by Directors.
25.3
To the extent requested by the Onex Shareholders, the Baring Shareholders or the Designated Shareholder, each committee of the board of Directors shall include at least one Onex Shareholder Designee, Baring Shareholder Designee and/or Designated Shareholder Designee (as applicable) to the extent required pursuant to the Shareholders Agreement or the Director Nomination Agreement to be appointed as a member of each such committee of the board of Directors unless such designation would violate any legal restrictions on such committee’s composition or the rules of the Designated Stock Exchange (subject in each case to any applicable exceptions, including those for Controlled Companies and any applicable phase-in periods).
Power to appoint an agent of the Company
25.4
The Directors may appoint any person, either generally or in respect of any specific matter, to be the agent of the Company with or without authority for that person to delegate all or any of that person’s powers. The Directors may make that appointment:
(a)
by causing the Company to enter into a power of attorney or agreement; or
(b)
in any other manner they determine.
Power to appoint an attorney or authorised signatory of the Company
25.5
The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretion (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 power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretion vested in him.
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25.6
Any power of attorney or other appointment may contain such provision for the protection and convenience of persons dealing with the attorney or authorised signatory as the Directors think fit. Any power of attorney or other appointment may also authorise the attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in that person.
Management
25.7
The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the following paragraphs shall be without prejudice to the general powers conferred by this paragraph.
25.8
The Directors from time to time and at any time may establish any advisory committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such advisory committees or local boards and may appoint any agents of the Company and may fix the remuneration of any of the aforesaid.
25.9
The Directors from time to time and at any time may delegate to any such advisory committee, local board or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local advisory committee or board, or any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.
25.10
Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretions for the time being vested to them.
25.11
The Directors shall elect, by the affirmative vote of a majority of the Directors then in office, a chairman. The chairman of the board of Directors shall be a Director or an officer of the Company. Subject to the provisions of these Articles and the direction of the Directors, the chairman of the board of Directors shall perform all duties and have all powers which are commonly incident to the position of chairman of a board or which are delegated to him or her by the Directors, preside at all general meetings and meetings of the Directors at which he or she is present and have such powers and perform such duties as the Directors may from time to time prescribe.
26
Disqualification of Directors
26.1
Subject to these Articles, the office of Director shall be vacated, if the Director:
(a)
becomes bankrupt or makes any arrangement or composition with his creditors;
(b)
dies or is found to be or becomes, in the opinion of a registered medical practitioner by whom he is being treated, physically or mentally incapable of acting as a Director;
(c)
resigns his office by notice to the Company in accordance with Articles 21.9 and 21.10;
(d)
is prohibited by applicable law or the Designated Stock Exchange from being a Director;
(e)
without special leave of absence from the Directors, is absent from meetings of the Directors for six consecutive months and the Directors resolve that his office be vacated; or
(f)
is removed from office pursuant to these Articles or any other agreement between the Director and the Company or any of its subsidiaries.
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26.2
If the office of Director is terminated or vacated for any reason, he shall thereupon cease to be a member of any committee of the board of Directors of the Company.
27
Meetings of directors
Regulation of directors’ meetings
27.1
Subject to the provisions of these Articles, the Directors may regulate their proceedings as they think fit.
Calling meetings
27.2
(a) The chairman of the board of Directors, a majority of the Directors or the Secretary on request of a Director or (b) for so long as there are at least four (4) Onex Shareholder Designees, a majority of the Onex Shareholder Designees may at any time summon a meeting of the Directors by twenty-four (24) hour notice to each Director in person, by telephone, facsimile, electronic email, or in such other manner as the Directors may from time to time determine, 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. Notice of a meeting need not be given to any Director (i) who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or (ii) who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Directors. All such waivers, consents, and approvals shall be filed with the corporate records or made part of the minutes of the meeting. A waiver of notice need not specify the purpose of any regular or special meeting of the Directors.
Use of technology
27.3
A Director or Directors may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director or Directors are members, by means of telephone or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at the meeting.
Quorum
27.4
The quorum for the transaction of business at a meeting of Directors (including any adjourned meeting) shall be a majority of the authorised number of Directors, but shall not be less than two. Every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Directors, subject to the provisions of these Articles and other applicable law.
27.5
If a quorum is not present within 15 minutes from the time specified for a meeting of Directors, or if, during a meeting, a quorum ceases to be present, then the meeting shall be adjourned to the same day in the next week at the same time and place or such other day, time and place as the Director(s) calling such meeting may determine.
Voting
27.6
A question which arises at a board meeting shall be decided by a majority of votes. If votes are equal the chairman shall not have a casting vote.
27.7
The continuing Directors 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 may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose.
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Validity
27.8
Anything done at a meeting of Directors is unaffected by the fact that it is later discovered that any person was not properly appointed, or had ceased to be a Director, or was otherwise not entitled to vote.
28
Permissible directors’ interests and disclosure
28.1
Subject to these Articles and the Law, a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration.
28.2
A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested, 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 any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. Any Director who enters into a contract or arrangement or has a relationship that is reasonably likely to be implicated under this Article 28.2 or that would reasonably be likely to affect a Director’s status as an “Independent Director” under applicable law or the rules of the Designated Stock Exchange shall disclose the nature of his or her interest in any such contract or arrangement in which he is interested or any such relationship. Without limiting the generality of the foregoing:
(a)
the Baring Shareholder Designee, the Onex Shareholder Designees and any Designated Shareholder Designee may hold any position of any kind whatsoever with the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and may maintain any interest of any kind whatsoever, whether directly or indirectly, in the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and/or any Owner Opportunity (as defined below) (such positions and/or interests, as the case may be, hereinafter, together, Owner Interests );
(b)
no Owner Interests shall disqualify any Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee from the office of Director, nor shall any contract, transaction or arrangement entered into by or on behalf of the Company in respect of which any Owner Interests may subsist, whether directly or indirectly, be or be liable to be avoided, nor shall any Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee be liable
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to account to the Company for any profit or other gain arising by reason of any Owner Interest and/or any contract, transaction or arrangement entered into by or on behalf of the Company in respect of which any Owner Interest may subsist, whether directly or indirectly;
(c)
each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee shall be at liberty to vote in respect of any contract, transaction or arrangement in which any applicable Owner Interest may subsist, whether directly or indirectly; and
(d)
the Owner Interests shall be deemed to have been disclosed by each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee upon his or her appointment as a Director of the Company and shall be deemed to be sufficient disclosure of the Owner Interests as required under these Articles. Thereafter, it shall not be necessary for a Baring Shareholder Designee, Onex Shareholder Designee or Designated Shareholder Designee to give special or particularized notice of any Owner Interests in respect of any transaction which may involve the Company.
28.3
To the maximum extent permitted by applicable law:
(a)
the Company renounces and waives:
(i)
any interest or expectancy in, or in being offered or presented with an opportunity to participate in; or
(ii)
any right to be informed of:
any business or corporate opportunity that may from time to time be of interest to or known to or be or have been presented to the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group (as applicable) and/or any of their respective Affiliates and/or any of their officers, directors, agents, stockholders, members, partners and subsidiaries (including specifically, without limiting the generality of the foregoing, each Baring Shareholder Designee, Onex Shareholder Designee and Designated Shareholder Designee (other than the Chief Executive Officer of the Company, the Executive Chairman of the Company (if any) and any other officer or executive officer of the Company)) (each such opportunity, hereinafter, an Owner Opportunity ) whether or not such Owner Opportunity is or may be pursued by any Baring Shareholder, any Onex Shareholder or any member of the Shareholder Group (as applicable) and or their respective Affiliates and whether or not such Owner Opportunity may be a business or corporate opportunity the Company might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so;
(b)
no Onex Shareholder Designee, Baring Shareholder Designee or Designated Shareholder Designee (other than the Chief Executive Officer of the Company, the Executive Chairman of the Company (if any) and any other officer or executive officer of the Company) (each of such persons, hereinafter, a Relevant Person ) shall:
(i)
be required or be under any duty (whether fiduciary or otherwise) to present to or make known to the Company any Owner Opportunity or refrain from, whether directly or indirectly, pursuing, participating in the pursuit of, exploiting or acquiring, any Owner Opportunity; or
(ii)
be liable to the Company for any breach of any fiduciary or other duty, whether as a Director or otherwise, by reason of the fact that such Relevant Person, whether directly or indirectly, acting in good faith, pursues, participates in the pursuit of, exploits or acquires any Owner Opportunity, directs any Owner Opportunity to another person or fails to present any Owner Opportunity, or information regarding any Owner Opportunity, to the Company;
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unless such Owner Opportunity is, or has been, expressly offered in writing to the Relevant Person solely in their capacity as Director;
(c)
none of the Baring Shareholders, the Onex Shareholders or any member of the Shareholder Group nor any of their respective Affiliates has any duty to refrain from engaging or investing directly or indirectly in the same or similar business activities or lines of business as the Company or any of its subsidiaries.
28.4
Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to reasonable expense reimbursement consistent with the Company’s policies in connection with such Director’s service in his official capacity; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.
29
Minutes
29.1
The Directors shall cause minutes to be made in books or loose-leaf folders provided for the purpose of recording:
(a)
all appointments of officers made by the Directors;
(b)
the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and
(c)
all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.
Written resolutions
29.2
The Directors may pass a resolution in writing without holding a meeting if the following conditions are met:
(a)
all Directors are given notice of the resolution;
(b)
the resolution is set out in a document or documents indicating that it is a written resolution;
(c)
all of the Directors:
(i)
sign a document; or
(ii)
sign several documents in the like form each signed by one or more Directors; and
(d)
the signed document or documents is or are delivered to the Company, including, if the Company so nominates by delivery of an Electronic Record, by Electronic means to the address specified for that purpose.
29.3
Such written resolution shall be as effective as if it had been passed at a meeting of the Directors duly convened and held; and it shall be treated as having been passed on the day and at the time that the last Director signs.
30
[Reserved]
31
Record Dates
Except to the extent of any conflicting rights attached to Shares, the Directors may fix any time and date as the record date for declaring or paying a dividend or making or issuing an allotment of Shares. The record date may be before or after the date on which a dividend, allotment or issue is declared, paid or made.
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32
Dividends
Payment of dividends by directors
32.1
Subject to the provisions of the Law, the Directors may pay dividends in accordance with the respective rights of the Members. Any dividend shall not be a debt owed by the Company until such time as payment of the dividend is made.
32.2
In relation to Shares carrying differing rights to dividends or rights to dividends at a fixed rate, the following applies:
(a)
if the Company has different classes of Shares, the Directors may pay dividends on Shares which confer deferred or non-preferred rights with regard to dividends as well as on Shares which confer preferential rights with regard to dividends but no dividend shall be paid on Shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrears;
(b)
subject to the provisions of the Law, the Directors may also pay, at intervals settled by them, any dividend payable at a fixed rate if it appears to them that there are sufficient funds of the Company lawfully available for distribution to justify the payment; and
(c)
if the Directors act in good faith, they shall not incur any liability to the Members holding Shares conferring preferred rights for any loss those Members may suffer by the lawful payment of the dividend on any Shares having deferred or non-preferred rights.
Apportionment of dividends
32.3
Except as otherwise provided by the rights attached to Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares on which the dividend is paid. All dividends shall be apportioned and paid proportionately to the amount paid up on the Shares during the time or part of the time in respect of which the dividend is paid. But if a Share is issued on terms providing that it shall rank for dividend as from a particular date, that Share shall rank for dividend accordingly.
Right of set off
32.4
The Directors may deduct from a dividend or any other amount payable to a person in respect of a Share any amount due by that person to the Company in relation to a Share.
Power to pay other than in cash
32.5
If the Directors so determine, any resolution determining a dividend may direct that it shall be satisfied wholly or partly by the distribution of assets or the issue of Shares. If a difficulty arises in relation to the distribution, the Directors may settle that difficulty in any way they consider appropriate. For example, they may do any one or more of the following:
(a)
issue fractional Shares;
(b)
fix the value of assets for distribution and make cash payments to some Members on the footing of the value so fixed in order to adjust the rights of Members; and
(c)
vest some assets in trustees.
How payments may be made
32.6
A dividend or other monies payable on or in respect of a Share may be paid in any of the following ways:
(a)
if the Member holding that Share or other person entitled to that Share nominates a bank account for that purpose, by wire transfer to that bank account; or
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(b)
by cheque or warrant sent by post to the registered address of the Member holding that Share or other person entitled to that Share.
32.7
For the purpose of Article 32.6(a), the nomination may be in writing or in an Electronic Record and the bank account nominated may be the bank account of another person. For the purpose of Article 32.6(b), subject to any applicable law or regulation, the cheque or warrant shall be made to the order of the Member holding that Share or other person entitled to the Share or to his nominee, whether nominated in writing or in an Electronic Record, and payment of the cheque or warrant shall be a good discharge to the Company.
32.8
If two or more persons are registered as Joint Holders, a dividend (or other amount) payable on or in respect of that Share may be paid as follows:
(a)
to the registered address of the Joint Holder of the Share who is named first on the register of members or to the registered address of the deceased or bankrupt holder, as the case may be; or
(b)
to the address or bank account of another person nominated by the Joint Holders, whether that nomination is in writing or in an Electronic Record.
32.9
Any Joint Holder of a Share may give a valid receipt for a dividend (or other amount) payable in respect of that Share.
Dividends or other monies not to bear interest in absence of special rights
32.10
Unless provided for by the rights attached to a Share, no dividend or other monies payable by the Company in respect of a Share shall bear interest.
Unclaimed Dividends
32.11
All dividends unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Subject to any applicable unclaimed property or other laws, any dividend unclaimed after a period of ten (10) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Directors of any unclaimed dividend or other sums payable on or in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof.
33
Accounts and audits
Accounting and other records
33.1
The Directors must ensure that proper accounting and other records are kept, and that accounts and associated reports are distributed in accordance with the requirements of the Law.
No automatic right of inspection
33.2
Except as provided in Article 14.1, the Directors shall from time to time 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 applicable law or authorised by the Directors.
Sending of accounts and reports
33.3
The Company’s accounts and associated Directors’ report and auditor’s report (if any) that are required or permitted to be sent to any person pursuant to any law shall be treated as properly sent to that person if:
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(a)
they are sent to that person in accordance with the notice provisions in Article 39; or
(b)
they are published on a website providing that person is given separate notice of:
(i)
the fact that the documents have been published on the website;
(ii)
the address of the website;
(iii)
the place on the website where the documents may be accessed; and
(iv)
how they may be accessed.
33.4
If, for any reason, a person notifies the Company that he is unable to access the website, the Company must, as soon as practicable, send the documents to that person by any other means permitted by these Articles. This, however, will not affect when that person is taken to have received the documents under Article 33.5.
Time of receipt if documents are published on a website
33.5
Documents sent by being published on a website in accordance with the preceding two Articles are only treated as sent at least 14 clear days before the date of the meeting at which they are to be laid if:
(a)
the documents are published on the website throughout a period beginning at least 14 clear days before the date of the meeting and ending with the conclusion of the meeting; and
(b)
the person is given at least 14 clear days’ notice of the meeting.
Validity despite accidental error in publication on website
33.6
If, for the purpose of a meeting, documents are sent by being published on a website in accordance with the preceding Articles, the proceedings at that meeting are not invalidated merely because by accident:
(a)
those documents are published in a different place on the website to the place notified; or
(b)
they are published for only part of the period from the date of notification until the conclusion of that meeting.
When accounts are to be audited
33.7
The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited.
34
Audit
34.1
The Directors or, if authorised to do so, the audit committee of the Directors, may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration.
34.2
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 of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.
35
Seal
Company seal
35.1
The Company may have a seal if the Directors so determine.
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Official seal
35.2
Subject to the provisions of the Law, the Company may also have:
(a)
an official seal or seals for use in any place or places outside the Island. Each such official seal shall be a facsimile of the original seal of the Company but shall have added on its face the name of the country, territory or place where it is to be used or the words “branch seal”; and
(b)
an official seal for use only in connection with the sealing of securities issued by the Company and such official seal shall be a copy of the common seal of the Company but shall in addition bear the word “securities”.
When and how seal is to be used
35.3
A seal may only be used by the authority of the Directors. Unless the Directors otherwise determine, a document to which a seal is affixed must be signed in one of the following ways:
(a)
by a Director and the Secretary; or
(b)
by a single Director.
If no seal is adopted or used
35.4
If the Directors do not adopt a seal, or a seal is not used, a document may be executed in the following manner:
(a)
by a Director and the Secretary; or
(b)
by a single Director; or
(c)
by any other person authorised by the Directors; or
(d)
in any other manner permitted by the Law.
Power to allow non-manual signatures and facsimile printing of seal
35.5
The Directors may determine that either or both of the following applies:
(a)
that the seal or a duplicate seal need not be affixed manually but may be affixed by some other method or system of reproduction; and/or
(b)
that a signature required by these Articles need not be manual but may be a mechanical or Electronic Signature.
Validity of execution
35.6
If a document is duly executed and delivered by or on behalf of the Company, it shall not be regarded as invalid merely because, at the date of the delivery, the Secretary, or the Director, or other Officer or person who signed the document or affixed the seal for and on behalf of the Company ceased to be the Secretary or hold that office and authority on behalf of the Company.
36
Officers
36.1
Subject to these Articles, the Directors may from time to time appoint any person, whether or not a Director of the Company, to hold the office of the chairman of the board of Directors (which, pursuant to the Director Nomination Agreement, shall be the Executive Chairman of the Company except as otherwise provided therein), the Chief Executive Officer, the President, the Chief Financial Officer, one or more Vice Presidents or such other Officers as
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the Directors may think necessary for the administration of the Company, for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit.
36.2
The appointee must consent in writing to holding that office.
36.3
Any appointment of a Director to an executive office shall terminate if he ceases to be a Director but without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such Director.
36.4
Where a chairman is appointed he shall, unless unable to do so, preside at every meeting of Directors.
36.5
If there is no chairman, or if the chairman is unable to preside at a meeting, that meeting may select its own chairman or the Directors may nominate one of their number to act in place of the chairman should he ever not be available.
36.6
Subject to the provisions of the Law and Article 36.7, the Directors may also appoint any person, who need not be a Director, as Secretary, for such period and on such terms, including as to remuneration, as they think fit.
36.7
The Secretary must consent in writing to holding that office.
36.8
A Director, Secretary or other Officer of the Company may not hold office, or perform the services, of auditor.
37
Register of Directors and Officers
The Company shall cause to be kept in one or more books at its office a Register of Directors in which there shall be entered the full names and addresses of the Directors and such other particulars as required by the Law.
38
Capitalisation of profits
Capitalisation of profits or of any stated capital account or capital redemption reserve
Subject to the Law and these Articles, the Directors may capitalise any sum standing to the credit of any of the Company’s reserve accounts (including a stated capital account or a capital redemption reserve) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of Shares becoming distributable in fractions. The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.
39
Notices
Form of notices
39.1
Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the person entitled to give notice to any Member either personally, by facsimile or by sending it through the post in a prepaid letter or via a recognised courier service, fees prepaid, addressed to the Member at his address as appearing in the Register of Members or, to the extent permitted by all applicable laws and regulations, by electronic
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means by transmitting it to any electronic number or address or website supplied by the Member to the Company or by placing it on the Company’s Website, provided that, (i) with respect to notification via electronic means, the Company has obtained the Member’s prior express positive confirmation in writing to receive or otherwise have made available to him notices in such fashion, and (i) with respect to posting to Company’s Website, notification of such posting is provided to such Member. In the case of Joint Holders of a Share, all notices shall be given to that one of the Joint Holders whose name stands first in the Register of Members in respect of the joint holding, and notice so given shall be sufficient notice to all the Joint Holders.
39.2
An affidavit of the mailing or other means of giving any notice of any general meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the Company giving the notice, shall be prima facie evidence of the giving of such notice.
39.3
Any Member present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.
Signatures
39.4
A written notice shall be signed when it is autographed by or on behalf of the giver, or is marked in such a way as to indicate its execution or adoption by the giver.
39.5
An Electronic Record may be signed by an Electronic Signature.
Evidence of transmission
39.6
A notice given by Electronic Record shall be deemed sent if an Electronic Record is kept demonstrating the time, date and content of the transmission, and if no notification of failure to transmit is received by the giver.
39.7
A notice given in writing shall be deemed sent if the giver can provide proof that the envelope containing the notice was properly addressed, pre-paid and posted, or that the written notice was otherwise properly transmitted to the recipient.
Delivery of notices
39.8
Any notice or other document, if served by (a) post, shall be deemed to have been served when the letter containing the same is posted, or (b) facsimile, shall be deemed to have been served upon confirmation of successful transmission, or (c) recognised courier service, shall be deemed to have been served when the letter containing the same is delivered to the courier service and in proving such service it shall be sufficient to provide that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier, or (d) electronic means as provided herein shall be deemed to have been served and delivered on the day on which it is successfully transmitted or at such later time as may be prescribed by any applicable laws or regulations.
Giving notice to a deceased or bankrupt Member
39.9
Any notice or document delivered or sent to any Member in accordance with the terms of these Articles shall notwithstanding that such Member be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Member as sole or Joint Holder, unless his name shall at the time of the service of the notice or document, have been removed from the Register of Members as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the Share.
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Saving provisions
39.10
A Member present, either in person or by proxy, at any general meeting or at any meeting of the Members holding any class of Shares shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.
39.11
Every person who becomes entitled to a Share shall be bound by any notice in respect of that Share which, before his name is entered in the register of members, has been duly given to a person from which he derives his title.
39.12
None of the preceding notice provisions shall derogate from the Articles about the delivery of written resolutions of Directors and written resolutions of Members.
40
Authentication of Electronic Records
Application of Articles
40.1
Without limitation to any other provision of these Articles, any notice, written resolution or other document under these Articles that is sent by Electronic means by a Member, or by the Secretary, or by a Director or other Officer of the Company, shall be deemed to be authentic if either Article 40.2 or Article 40.4 applies.
Authentication of documents sent by Members by Electronic means
40.2
An Electronic Record of a notice, written resolution or other document sent by Electronic means by or on behalf of one or more Members shall be deemed to be authentic if the following conditions are satisfied:
(a)
the Member or each Member, as the case may be, signed the original document, and for this purpose original document includes several documents in like form signed by one or more of those Members;
(b)
the Electronic Record of the original document was sent by Electronic means by, or at the direction of, that Member to an address specified in accordance with these Articles for the purpose for which it was sent; and
(c)
Article 40.7 does not apply.
40.3
For example, where a sole Member signs a resolution and sends the Electronic Record of the original resolution, or causes it to be sent, by facsimile transmission to the address in these Articles specified for that purpose, the facsimile copy shall be deemed to be the written resolution of that Member unless Article 40.7 applies.
Authentication of document sent by the Secretary or Officers by Electronic means
40.4
An Electronic Record of a notice, written resolution or other document sent by or on behalf of the Secretary or an Officer or Officers of the Company shall be deemed to be authentic if the following conditions are satisfied:
(a)
the Secretary or the Officer or each Officer, as the case may be, signed the original document, and for this purpose original document includes several documents in like form signed by the Secretary or one or more of those Officers;
(b)
the Electronic Record of the original document was sent by Electronic means by, or at the direction of, the Secretary or that Officer to an address specified in accordance with these Articles for the purpose for which it was sent; and
(c)
Article 40.7 does not apply.
This Article applies whether the document is sent by or on behalf of the Secretary or Officer in his own right or as a representative of the Company.
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40.5
For example, where a sole Director signs a resolution and scans the resolution, or causes it to be scanned, as a PDF version which is attached to an email sent to the address in these Articles specified for that purpose, the PDF version shall be deemed to be the written resolution of that Director unless Article 40.7 applies.
Manner of signing
40.6
For the purposes of these Articles about the authentication of Electronic Records, a document will be taken to be signed if it is signed manually or in any other manner permitted by these Articles.
Saving provision
40.7
A notice, written resolution or other document under these Articles will not be deemed to be authentic if the recipient, acting reasonably:
(a)
believes that the signature of the signatory has been altered after the signatory had signed the original document;
(b)
believes that the original document, or the Electronic Record of it, was altered, without the approval of the signatory, after the signatory signed the original document; or
(c)
otherwise doubts the authenticity of the Electronic Record of the document;
and the recipient promptly gives notice to the sender setting the grounds of its objection. If the recipient invokes this Article, the sender may seek to establish the authenticity of the Electronic Record in any way the sender thinks fit.
41
Information
41.1
No Member, as such, shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or other confidential or proprietary information related to the conduct of the business of the Company and which in the opinion of the Directors would not be in the interests of the members of the Company to communicate to the public.
41.2
The Directors shall be entitled (but not required, except as provided by law) to release or disclose any information in their possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register of Members and transfer books of the Company.
42
Indemnity
Indemnity
42.1
To the fullest extent permitted by law, the Company shall indemnify every Director and Officer of the Company or any predecessor to the Company (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former Officer of the Company or any predecessor to the Company, and the successors and assigns of each of the foregoing, and may indemnify any person (other than current and former Directors and Officers) (any such Director or Officer, an Indemnified Person ), 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 in connection with the Company other than such liability (if any) that they may incur by reason of their own actual fraud or wilful default. No Indemnified Person shall 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 or wilful default of such Indemnified Person. No person shall be found to have committed actual
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fraud or wilful default under this Article unless or until a court of competent jurisdiction shall have made a finding to that effect. Each Member agrees to waive any claim or right of action he or she might have, whether individually or by or in the right of the Company, against any Indemnified Person on account of any action taken by such Indemnified Person, or the failure of such Indemnified Person to take any action in the performance of his duties with or for the Company; provided that such waiver shall not extend to any matter in respect of any actual fraud or wilful default which may attach to such Indemnified Person.
42.2
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 returned to the Company (without interest) by the Indemnified Person.
42.3
The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other Officer of the Company 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.
42.4
Neither any amendment nor repeal of these Articles set forth under this heading of Indemnity (the Indemnification Articles ), nor the adoption of any provision of these Articles or Memorandum of Association inconsistent with the Indemnification Articles, shall eliminate or reduce the effect of the Indemnification Articles, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for these Indemnification Articles, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
43
Financial Year
Unless the Directors otherwise prescribe, the financial year of the Company shall begin on January 1 in each year and shall end on December 31 in such year.
44
Winding up
Distribution of assets in specie
44.1
If the Company is wound up, the liquidator or the Directors, as the case may be, shall, subject to these Articles and any other sanction required by the Law, apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:
(a)
if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the number of Shares held by them; or
(b)
if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the number of Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company.
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44.2
If the Company is wound up, the liquidator or the Directors, as the case may be, subject to the rights attaching to any Shares and with the sanction of a Special Resolution of the Company and any other sanction required by the Law, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator or the Directors, as the case may be, may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.
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Dated the [         ] day of  [         ] 2019.
Signed for and on behalf of Onex Partners IV LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP LP, its general partner
By: Onex Partners Manager LP, its agent
By: Onex Partners Manager GP ULC, its general partner
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
Print name
Signed for and on behalf of Onex Partners IV GP LP of 190 Elgin Avenue,
George Town, KY1-9005, Cayman Islands
By: Onex Partners IV GP Limited, its general partner
   
Signature of authorised signatory
   
Signature of authorised signatory
   
Print name
   
Print name
Witness to above signatures
   
Signature
[Address]
   
   
Print name
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PROSPECTUS FOR UP TO 69,200,000 ORDINARY SHARES
AND 34,712,174 ORDINARY SHARES UNDERLYING WARRANTS
OF
CLARIVATE ANALYTICS PLC
Until            , 2019, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20.   Indemnification of Directors and Officers
The Jersey Companies Law does not contain any provision permitting Jersey companies to limit the liabilities of directors for breach of fiduciary duty.
However, a Jersey company may exempt from liability, and indemnify directors and officers for, liabilities incurred in defending any proceedings (whether civil or criminal) in which judgment is given in the person’s favor or the person is acquitted; which are discontinued other than for some benefit conferred by the person or on the person’s behalf or some detriment suffered by the person; which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), the person was substantially successful on the merits in the person’s resistance to the proceedings; any liability incurred other than to the company if the person acted in good faith with a view to the best interests of the company; any liability incurred in connection with an application made under Article 212 of the Jersey Companies Law in which relief is granted to the person by the court; or any liability against which the company normally maintains insurance for persons other than directors.
To the fullest extent permitted by law, the articles of association provide that the directors and officers of Clarivate shall be indemnified from and against all liability which they incur in execution of their duty in their respective offices, except liability incurred by reason of such director’s or officer’s actual fraud or willful default.
Item 21.   Exhibits and Financial Statement Schedules
Exhibit No.
Description
Included
Form
Filing Date
 2.1 Agreement and Plan of Merger, dated as of January 14, 2019, by and among Churchill Capital Corp, Clarivate Analytics Plc, Camelot Holdings (Jersey) Limited, CCC Merger Sub, Inc. and Camelot Merger Sub (Jersey) Limited
 2.2 Amendment No. 1 to the Agreement and Plan of Merger, dated February 26, 2019
 3.1 Form of Amended and Restated Memorandum and Articles of Association of Clarivate Analytics Plc
 3.2 Amended and Restated Certificate of Incorporation of Churchill Capital Corp
 3.3 Bylaws of Churchill Capital Corp
 4.1 Specimen Unit Certificate of Churchill Capital Corp
 4.2 Specimen Common Stock Certificate of Churchill Capital Corp
 4.3 Specimen Warrant Certificate of Churchill Capital Corp
 4.4 Specimen Ordinary Share Certificate of Clarivate Analytics Plc
To be filed by Amendment
 4.5 Warrant Agreement between Continental Stock Transfer & Trust Company and Churchill Capital Corp
By Reference
Churchill
8-K
September 12, 2018
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Exhibit No.
Description
Included
Form
Filing Date
 4.6 Indenture dated as of October 3, 2016 among Camelot Finance S.A., as Issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee governing the 7.875% Notes due 2024
 5.1 Opinion of Ogier
To be filed by Amendment
10.1 Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and Churchill Capital Corp
10.2 Administrative Services Agreement between Churchill Capital Corp and an affiliate of Churchill Sponsor LLC
10.3 Form of Warrants Subscription Agreement
10.4 Form of Director and Officer Indemnification Agreements
To be filed by
Amendment
10.5 Sponsor Agreement
10.6 A&R Shareholders Agreement
10.7 Form of Amended and Restated Registration Rights Agreement
10.8 Form of Tax Receivable Agreement
10.9 Credit Agreement dated as of October 3, 2016 among Camelot UK Holdco Limited, as Holdings, Camelot UK Bidco Limited, as UK Holdco, Camelot Finance LP, as the US Tower Borrower, Camelot Cayman LP, as the FHC Tower Borrower, the US Company Borrowers specified therein, Camelot Finance S.A., as the Lux Company Borrower, certain Restricted Subsidiaries designated thereunder as Revolver Co-Borrowers, the several Lenders from time to time party thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent
10.10 First Amendment to the Credit Agreement
10.11
10.12 Director Acknowledgement Letter (Stead)
10.13 Director Acknowledgement Letter (von Blucher)
10.14 Director Acknowledgement Letter (Klein)
10.15 Clarivate Analytics Plc 2019 Incentive Award Plan
To be filed by Amendment
21.1 Subsidiaries of the Registrant
To be filed by Amendment
23.1 Consent of PricewaterhouseCoopers LLP (with respect to Camelot Holdings (Jersey) Limited financial statements)
23.2 Consent of PricewaterhouseCoopers LLP (with respect to Clarivate Analytics Plc financial statement)
23.3 Consent of Marcum LLP (with respect to Churchill financial statements)
23.4 Consent of Ogier
To be filed by Amendment
24.1 Power of Attorney
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Exhibit No.
Description
Included
Form
Filing Date
99.1 Consent of Jay Nadler (Director nominee)
99.2 Consent of Jerre Stead (Director nominee)
99.3 Consent of Anthony Munk (Director nominee)
99.4 Consent of Balakrishnan S. Iyer (Director nominee)
99.5 Consent of Charles E. Moran (Director nominee)
99.6 Consent of Charles J. Neral (Director nominee)
99.7 Consent of Karen G. Mills (Director nominee)
99.8 Consent of Matthew Scattarella (Director nominee)
99.9 Consent of Martin Broughton (Director nominee)
99.10 Consent of Michael Klein (Director nominee)
99.11 Consent of Nicholas Macksey (Director nominee)
99.12 Consent of Sheryl von Blucher (Director nominee)
99.13 Consent of Amir Motamedi (Director nominee)
Item 22.   Undertakings
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 of 1933;
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.
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 of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
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)
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.
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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), 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.
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 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 of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by 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.
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 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:

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

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;

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

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in London, United Kingdom, on the 27 th day of February, 2019.
CLARIVATE ANALYTICS PLC
By:
/s/ Jay Nadler
Name: Jay Nadler
Title: Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Jay Nadler, Christine Archbold, Richard Hanks and Stephen Hartman, each acting alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign this Registration Statement on Form F-4, or other appropriate form, and all amendments thereto, including post-effective amendments, of Clarivate Analytics Plc, and to file the same, with all exhibits thereto, and other document in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Name
Title
Date
By:
/s/ Jay Nadler
Jay Nadler
Chief Executive Officer (Principal Executive Officer)
February 27, 2019
By:
/s/ Christine Archbold
Christine Archbold
Chief Accounting Officer (Principal Accounting Officer)
February 27, 2019
By:
/s/ Richard Hanks
Richard Hanks
Chief Financial Officer (Principal Financial Officer)
February 27, 2019
By:
/s/ Konstantin Gilis
Konstantin Gilis
Director
February 27, 2019
By:
/s/ Paul Edwards
Paul Edwards
Director
February 27, 2019
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AUTHORIZED REPRESENTATIVE
Pursuant to the requirement of the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Clarivate Analytics Plc, has signed this registration statement in the City of New York, State of New York, on the 27th day of February, 2019.
VISTRA USA (IES), LLC
By:
/s/ Waldo Mercado
Name: Waldo Mercado
Title: Manager, International Operations
II-6

 

Exhibit 4.6

 

EXECUTION VERSION

 

CAMELOT FINANCE S.A.

as Issuer

 

and the Guarantors from time to time party hereto

 

7.875% Senior Notes due 2024

 

 

 

INDENTURE

 

Dated as of October 3, 2016

 

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
ARTICLE 1
 
DEFINITIONS AND RULES OF CONSTRUCTION
     
SECTION 1.01. Definitions 1
SECTION 1.02. Other Definitions. 39
SECTION 1.03. Measuring Compliance 40
SECTION 1.04. Rules of Construction 42
     
ARTICLE 2
 
THE SECURITIES
     
SECTION 2.01. Amount of Securities; Issuable in Series 43
SECTION 2.02. Form and Dating 44
SECTION 2.03. Execution and Authentication 44
SECTION 2.04. Registrar and Paying Agent 45
SECTION 2.05. Paying Agent to Hold Money 46
SECTION 2.06. Holder Lists 46
SECTION 2.07. Transfer and Exchange 46
SECTION 2.08. Replacement Securities 47
SECTION 2.09. Outstanding Securities 47
SECTION 2.10. Temporary Securities 48
SECTION 2.11. Cancellation 48
SECTION 2.12. Defaulted Interest 48
SECTION 2.13. CUSIP Numbers and ISINs 48
SECTION 2.14. Calculation of Specified Percentage of Securities 49
SECTION 2.15. Deposit of Moneys 49
SECTION 2.16. Additional Amounts. 49
     
ARTICLE 3
 
REDEMPTION
     
SECTION 3.01. Optional Redemption 51
SECTION 3.02. Applicability of Article 52
SECTION 3.03. Notices to Trustee 52
SECTION 3.04. Selection of Securities to Be Redeemed 52
SECTION 3.05. Notice of Optional Redemption 52
SECTION 3.06. Effect of Notice of Redemption 53
SECTION 3.07. Deposit of Redemption Price 53
SECTION 3.08. Securities Redeemed in Part 54
SECTION 3.09. Offer to Purchase by Application of Excess Proceeds 54
SECTION 3.10. Optional Redemption for Tax Reasons 55

 

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ARTICLE 4
 
COVENANTS
     
SECTION 4.01. Payment of Securities 56
SECTION 4.02. Reports and Other Information 57
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock 60
SECTION 4.04. Limitation on Restricted Payments 66
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries 73
SECTION 4.06. Asset Sales 76
SECTION 4.07. Transactions with Affiliates 79
SECTION 4.08. Change of Control 82
SECTION 4.09. Compliance Certificate 84
SECTION 4.10. Future Guarantors 84
SECTION 4.11. Liens 84
SECTION 4.12. Maintenance of Office or Agency 85
SECTION 4.13. Suspension of Covenants 85
SECTION 4.14. Amendments to the Acquisition Agreement 86
SECTION 4.15. Limitation on Issuer Activities. 86
     
ARTICLE 5
 
SUCCESSOR COMPANY
     
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets 87
     
ARTICLE 6
 
DEFAULTS AND REMEDIES
     
SECTION 6.01. Events of Default 90
SECTION 6.02. Acceleration 92
SECTION 6.03. Other Remedies 92
SECTION 6.04. Waiver of Past Defaults 93
SECTION 6.05. Control by Majority 93
SECTION 6.06. Limitation on Suits 93
SECTION 6.07. Rights of the Holders to Receive Payment 94
SECTION 6.08. Collection Suit by Trustee 94
SECTION 6.09. Trustee May File Proofs of Claim 94
SECTION 6.10. Priorities 94
SECTION 6.11. Undertaking for Costs 95
SECTION 6.12. Waiver of Stay or Extension Laws 95
SECTION 6.13. Restoration of Rights and Remedies. 95
SECTION 6.14. Rights and Remedies Cumulative. 95
SECTION 6.15. Delay or Omission Not Waiver. 95

 

- iii

 

 

ARTICLE 7
 
TRUSTEE
     
SECTION 7.01. Duties of Trustee 96
SECTION 7.02. Rights of Trustee 97
SECTION 7.03. Individual Rights of Trustee 99
SECTION 7.04. Trustee’s Disclaimer 99
SECTION 7.05. Notice of Defaults 99
SECTION 7.06. Compensation and Indemnity 100
SECTION 7.07. Replacement of Trustee. 100
SECTION 7.08. Successor Trustee by Merger. 101
SECTION 7.09. Eligibility; Disqualification. 101
SECTION 7.10. Resignation of Agents 102
SECTION 7.11. Preferential Collection of Claims Against Issuer 102
     
ARTICLE 8
 
DISCHARGE OF INDENTURE; DEFEASANCE
     
SECTION 8.01. Discharge of Liability on Securities; Defeasance 102
SECTION 8.02. Conditions to Defeasance 103
SECTION 8.03. Application of Trust Money 104
SECTION 8.04. Repayment to Issuer 104
SECTION 8.05. Indemnity for U.S. Government Obligations 105
SECTION 8.06. Reinstatement 105
     
ARTICLE 9
 
AMENDMENT, SUPPLEMENT AND WAIVER
     
SECTION 9.01. Without Consent of the Holders 105
SECTION 9.02. With Consent of the Holders 107
SECTION 9.03. [Reserved] 108
SECTION 9.04. Revocation and Effect of Consents and Waivers 108
SECTION 9.05. Notation on or Exchange of Securities 108
SECTION 9.06. Trustee to Sign Amendments 108
SECTION 9.07. Additional Voting Terms 109
     
ARTICLE 10
 
[Reserved]
 
ARTICLE 11
 
GUARANTEES
     
SECTION 11.01. Guarantees 109

 

- iv

 

 

SECTION 11.02. Limitation on Guarantor Liability 111
SECTION 11.03. No Waiver 113
SECTION 11.04. Modification 114
SECTION 11.05. Execution of Supplemental Indenture for Future Guarantors 114
SECTION 11.06. Non-Impairment 114
     
ARTICLE 12
 
MISCELLANEOUS
     
SECTION 12.01. [Reserved] 114
SECTION 12.02. Notices 114
SECTION 12.03. Communication by the Holders with Other Holders 115
SECTION 12.04. Certificate and Opinion as to Conditions Precedent 115
SECTION 12.05. Statements Required in Certificate or Opinion 116
SECTION 12.06. When Securities Disregarded 116
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar 116
SECTION 12.08. Legal Holidays 116
SECTION 12.09. Governing Law 116
SECTION 12.10. No Personal Liability of Directors, Officers, Employees and Stockholders 117
SECTION 12.11. No Adverse Interpretation of Other Agreements 117
SECTION 12.12. Successors 117
SECTION 12.13. Multiple Originals 117
SECTION 12.14. Table of Contents; Headings 118
SECTION 12.15. Indenture Controls 118
SECTION 12.16. Severability 118
SECTION 12.17. Waiver of Jury Trial 118
SECTION 12.18. U.S.A. Patriot Act 118
SECTION 12.19. Force Majeure 118

 

Appendix A Provisions Relating to Original Securities and Additional Securities
     
EXHIBIT INDEX
     
Exhibit A Form of Security
Exhibit B Form of Transferee Letter of Representation
Exhibit C Form of Supplemental Indenture

  

- v

 

 

INDENTURE dated as of October 3, 2016 among Camelot Finance S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg, having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B 208514 (the “ Issuer ”), the Guarantors party hereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the “ Trustee ”).

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined herein) of (a) $500,000,000 aggregate principal amount of the Issuer’s 7.875% Senior Notes due October 15, 2024 issued on the date hereof (the “ Original Securities ”) and (b) any Additional Securities that may be issued after the date hereof in the form of Exhibit A (all such securities in clauses (a) and (b) being referred to collectively as the “ Securities ”). Subject to the conditions and compliance with the covenants set forth herein, the Issuer may issue an unlimited aggregate principal amount of Additional Securities.

 

ARTICLE 1

 

DEFINITIONS AND RULES OF CONSTRUCTION

 

SECTION 1.01.          Definitions .

 

Acquired Indebtedness ” means, with respect to any specified Person:

 

(1)         Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person whether or not such Indebtedness is Incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of such specified Person, and

 

(2)         Indebtedness secured by a Lien encumbering any asset acquired by such specified Person;

 

provided that any Indebtedness of such Person that is extinguished, redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transaction pursuant to which such other Person becomes a Subsidiary of the specified Person will not be Acquired Indebtedness.

 

Acquisition ” means the Acquisition as defined in the Acquisition Agreement.

 

Acquisition Agreement ” means that certain stock and asset purchase agreement, including all exhibits and schedules thereto, dated as of July 10, 2016, by and among Thomson Reuters Global Resources, Thomson Reuters U.S. LLC, Thomson Reuters Corporation and UK Holdco, and all side letters and other agreements related thereto, in each case, as amended on September 14, 2016.

 

Additional Securities ” means Securities issued from time to time under this Indenture subsequent to the Closing Date.

 

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

 

 

 

Agents ” means the Paying Agent, Registrar, Transfer Agent and Authenticating Agent.

 

Appendix ” means Appendix A attached hereto.

 

Applicable Premium ” means, with respect to any Security on any applicable redemption date, the greater of:

 

(1)         1.0% of the then outstanding principal amount of the Security; and

 

(2)         the excess, if any, of:

 

(a)          the present value at such redemption date of (i) the redemption price of the Securities, at October 15, 2019 as set forth in Paragraph 5 of the Security plus (ii) all required interest payments due on such Security through October 15, 2019 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate plus 50 basis points; over

 

(b)          the then outstanding principal amount of the Security.

 

The Issuer shall calculate or cause the calculation of the Applicable Premium, and the Trustee shall have no duty to calculate or verify the calculations of the Applicable Premium.

 

Asset Sale ” means:

 

(1)         the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of UK Holdco or any Restricted Subsidiary (each referred to in this definition as a “ disposition ”) or

 

(2)         the issuance or sale of Equity Interests of any Restricted Subsidiary (other than (i) directors’ qualifying shares or shares or interests required to be held by non-U.S. nationals or other third parties to the extent required by applicable law or (ii) Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued in compliance with Section 4.03), other than to UK Holdco or another Restricted Subsidiary (whether in a single transaction or a series of related transactions), in each case other than:

 

(a)          a sale, exchange, transfer or other disposition of cash, Cash Equivalents or Investment Grade Securities or uneconomical, obsolete, damaged, unnecessary, surplus, unsuitable or worn out equipment or any sale or disposition of property or assets in connection with scheduled turnarounds, maintenance and equipment and facility updates or any disposition of inventory or goods (or other assets) held for sale or no longer used in the ordinary course of business;

 

(b)          the sale, conveyance, transfer or other disposition of all or substantially all of the assets of UK Holdco (on a consolidated basis) in a manner permitted pursuant to Section 5.01 or any sale, conveyance, transfer or other disposition that constitutes a Change of Control;

 

(c)          any Permitted Investment or Restricted Payment that is permitted to be made, and is made, under Section 4.04;

 

  - 2 -  

 

 

(d)          any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary with an aggregate Fair Market Value of less than $15.0 million;

 

(e)          any transfer or disposition of property or assets by a Restricted Subsidiary to UK Holdco or by UK Holdco or a Restricted Subsidiary to a Restricted Subsidiary;

 

(f)          sales of assets received by UK Holdco or any Restricted Subsidiary upon the foreclosure on a Lien;

 

(g)          any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

 

(h)           the unwinding of any Hedging Obligations;

 

(i)           the sale, lease, assignment, license or sublease of inventory, equipment, accounts receivable, notes receivable or other current assets held for sale in the ordinary course of business or the conversion of accounts receivable into a notes receivable;

 

(j)           the lease, assignment or sublease of any real or personal property in the ordinary course of business and dispositions to landlords of improvements made to leased real property pursuant to customary terms of leases entered into in the ordinary course of business;

 

(k)          a sale of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions;

 

(l)           a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

 

(m)         any financing transaction with respect to property built or acquired by UK Holdco or any Restricted Subsidiary, including Sale/Leaseback Transactions permitted by this Indenture;

 

(n)          any exchange of assets for assets (including a combination of assets and Cash Equivalents) related to a Similar Business of comparable or greater market value or usefulness to the business of UK Holdco and its Restricted Subsidiaries as a whole, as determined in good faith by UK Holdco, which in the event of an exchange of assets with a Fair Market Value in excess of (1) $20.0 million shall be evidenced by an Officer’s Certificate, and (2) $30.0 million shall be set forth in a resolution approved in good faith by at least a majority of the Board of Directors of UK Holdco;

 

(o)          the grant in the ordinary course of business of any license or sublicense of patents, trademarks, know-how and any other intellectual property;

 

(p)          any sale or other disposition deemed to occur with creating, granting or perfecting a Lien not otherwise prohibited by this Indenture or the Notes Documents;

 

  - 3 -  

 

 

(q)         the surrender or waiver of contract rights or settlement, release or surrender of a contract, tort or other litigation claim in the ordinary course of business;

 

(r)          foreclosures, condemnations or any similar action on assets;

 

(s)          the sale (without recourse) of receivables (and related assets) pursuant to factoring arrangements entered into in the ordinary course of business;

 

(t)          sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; and

 

(u)          the lapse, abandonment or other disposition of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of UK Holdco are no longer commercially reasonable to maintain or are not material to the conduct of the business of UK Holdco and its Restricted Subsidiaries taken as a whole.

 

Bank Products ” means any facilities or services related to Cash Management Services.

 

Board of Directors ” means as to any Person, the board of directors or managers, sole member, managing member or other governing body of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

 

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in Luxembourg or New York City.

 

Camelot Acquisition Co. ” means Camelot U.S. Acquisition 1 Co., a Delaware corporation.

 

Capital Stock ” means:

 

(1)         in the case of a corporation or a company, corporate stock or share capital;

 

(2)         in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)         in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)         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.

 

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP. For the avoidance of doubt, “Capitalized Lease Obligation” shall not include obligations or liabilities of any Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations would be required to be classified and accounted for as an operating lease under GAAP as existing on the Closing Date.

 

  - 4 -  

 

 

Cash Contribution Amount ” means the aggregate amount of cash contributions made to the capital of the Issuer or any Guarantor described in the definition of “Contribution Indebtedness.”

 

Cash Equivalents ” means:

 

(1)         U.S. Dollars, Canadian Dollars, Pounds Sterling, Euros, the national currency of any member state of the European Union and local currencies held by UK Holdco and its Restricted Subsidiaries from time to time in the ordinary course of business in connection with any business conducted by such Person in such jurisdiction;

 

(2)         securities issued or directly and fully guaranteed or insured by the government of the United States, Canada, any country that is a member of the European Union, Switzerland or the United Kingdom or any agency or instrumentality thereof in each case with maturities not exceeding two years from the date of acquisition;

 

(3)         certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year, and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250 million in the case of U.S. banks and $100.0 million (or the foreign currency equivalent thereof) in the case of non-U.S. banks, and whose long-term debt is rated with an Investment Grade Rating by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

 

(4)         repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)         commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “P-1/A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

 

(6)         readily marketable direct obligations issued by any state or commonwealth of the United States of America, Canada, any country that is a member of the European Union, the United Kingdom or Switzerland or any political subdivision of the foregoing having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

 

(7)         Indebtedness or Preferred Stock issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s in each case with maturities not exceeding two years from the date of acquisition;

 

(8)         investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

 

(9)         instruments equivalent to those referred to in clauses (1) through (7) above denominated in Euro or Pound Sterling or any other non-U.S. currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with (a) any business conducted by any Restricted Subsidiary organized in such jurisdiction or (b) any Investment in the jurisdiction where such Investment is made.

 

  - 5 -  

 

 

Cash Management Services ” means any of the following to the extent not constituting a line of credit (other than an overnight draft facility that is not in default): automated clearing house transactions, treasury and/or cash management services, including, without limitation, treasury, depository, overdraft, credit, purchasing or debit card, non-card e-payables services, electronic funds transfer, treasury management services (including controlled disbursement services, overdraft automatic clearing house fund transfer services, return items and interstate depository network services), other demand deposit or operating account relationships and merchant services.

 

Cayman Co ” means Camelot TowerCo, a Cayman Islands exempted company.

 

Change of Control ” means the occurrence of any of the following events after the Closing Date:

 

(i)          the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of UK Holdco and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

 

(ii)         the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of UK Holdco or any direct or indirect parent of UK Holdco that holds directly or indirectly an amount of Voting Stock of UK Holdco such that UK Holdco is a Subsidiary of such holding company.

 

Notwithstanding the foregoing, no Specified Merger/Transfer Transaction or Specified Parent Guarantor Merger/Transfer Transaction shall constitute a Change of Control.

 

Closing Date ” means October 3, 2016.

 

Closing Date Guarantors ” means UK Holdco and its subsidiaries that are Guarantors on the Closing Date.

 

Code ” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

Consolidated Interest Expense ” means, with respect to UK Holdco and its Restricted Subsidiaries for any period, the sum, without duplication, of:

 

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(1)         consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net payments and receipts (if any) pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (t) any expense resulting from the discounting of any Indebtedness in connection with the application of purchase accounting in connection with the Transactions or any acquisition, (u) penalties and interest relating to Taxes, (v) any “additional interest” or “penalty interest” with respect to any securities, (w) any accretion or accrued interest of discounted liabilities, (x) amortization of deferred financing fees, debt issuance costs, commissions, discounts, fees and expenses, (y) any expensing of bridge, commitment and other financing fees, cost of surety bonds, charges owed with respect to letters of credit, bankers’ acceptances or similar facilities and (z) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Financing); plus

 

(2)         consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

 

(3)         interest income for such period;

 

provided that, for purposes of calculating Consolidated Interest Expense, no effect shall be given to the discount and/or premium resulting from the bifurcation of derivatives under FASB ASC 815 and related interpretations as a result of the terms of the Indebtedness to which such Consolidated Interest Expense relates.

 

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

 

Notwithstanding the foregoing, any additional changes arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred Stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges.

 

Consolidated Net Income ” means, with respect to UK Holdco and its Restricted Subsidiaries for any period, the aggregate of the Net Income of UK Holdco and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided , however , that, without duplication:

 

(1)         any after-Tax effect of infrequent, non-recurring, non-operating or unusual gains, losses, income or expenses (including all fees and expenses relating thereto) (including costs and expenses relating to the Transactions), severance, relocation costs, consolidation and closing costs, integration and facilities opening costs, business optimization costs, transition costs, restructuring costs, signing, retention or completion bonuses or payments and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded;

 

(2)         the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period, whether effected through a cumulative effect adjustment or a retroactive application, in each case in accordance with GAAP, shall be excluded;

 

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(3)         any net after-Tax effect of income or loss from disposed, abandoned or discontinued operations and any net after-Tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded;

 

(4)         any net after-Tax effect of gains or losses (including all fees and expenses relating thereto) attributable to business dispositions or asset dispositions or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by UK Holdco, shall be excluded;

 

(5)         the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting (other than a Guarantor), shall be excluded; provided that the Consolidated Net Income of UK Holdco shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

 

(6)         solely for the purpose of determining the amount available for Restricted Payments under Section 4.04(a)(3)(A), the Net Income for such period of any Restricted Subsidiary (other than the Issuer or any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of UK Holdco will be increased by the amount of dividends or other distributions or other payments actually paid in cash or Cash Equivalents (or to the extent converted into cash or Cash Equivalents) to UK Holdco or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

 

(7)         effects of adjustments (including the effects of such adjustments pushed down to UK Holdco and its Restricted Subsidiaries) in any line item in such Person’s consolidated financial statements (including, but not limited to, any step-ups with respect to re-valuing assets and liabilities) pursuant to GAAP and related authoritative pronouncements resulting from the application in accordance with GAAP of purchase accounting in relation to the Transactions or any investment, acquisition, merger or consolidation (or reorganization or restructuring) that is consummated after the Closing Date or the depreciation, amortization or write-off of any amounts thereof, net of taxes, shall be excluded;

 

(8)         any net after-Tax income (loss) from the early extinguishment of (i) Indebtedness, (ii) Hedging Obligations or (iii) other derivative instruments shall be excluded;

 

(9)         any impairment charge or expense, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets or investments in debt and equity securities or as a result of a change in law or regulations, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded;

 

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(10)        any non-cash compensation charge or expense, including any such charge arising from grants of stock appreciation or similar rights, phantom equity, stock options, restricted stock or other rights, and any cash charges associated with the rollover, acceleration or payout of Equity Interests by management of the Issuer or any of its direct or indirect parent companies in connection with the Transactions, including any expense resulting from the application of Statement of Financial Accounting Standards No. 123R shall be excluded; provided , that any subsequent settlement in cash shall reduce Consolidated Net Income for the period in which such payment occurs;

 

(11)        any fees and expenses or other charges (including any make-whole premium or penalties) Incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, recapitalization, Asset Sale, issuance or repayment of Indebtedness, Equity Offering, refinancing transaction or amendment or modification of any debt instrument (in each case, (i) including any such transactions consummated prior to the Closing Date, (ii) whether or not any such transaction is undertaken but not completed, (iii) whether or not such transaction is permitted by this Indenture and (iv) including any such transaction incurred by any direct or indirect parent of UK Holdco) and any charges or non-recurring merger costs Incurred during such period as a result of any such transaction shall be excluded;

 

(12)        accruals and reserves that are established and not reversed within 12 months after the Closing Date that are so required to be established as a result of the Transactions (or within 12 months after the closing of any acquisition that are so required to be established as a result of such acquisition) in accordance with GAAP shall be excluded;

 

(13)        [reserved];

 

(14)        any charges resulting from the application of Accounting Standards Codification Topic 805 “Business Combinations,” Accounting Standards Codification Topic 350 “Intangibles—Goodwill and Other,” Accounting Standards Codification Topic 360-10-35-15 “Impairment or Disposal of Long-Lived Assets,” Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” or Accounting Standards Codification Topic 820 “Fair Value Measurements and Disclosures” shall be excluded;

 

(15)        non-cash interest expense resulting from the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition” shall be excluded;

 

(16)        any non-cash interest expense and non-cash interest income, in each case to the extent there is no associated cash disbursement or receipt, as the case may be, before, the earlier of the maturity date of the Securities and the date on which all the Securities cease to be outstanding, shall be excluded;

 

(17)        the net after-Tax effect of carve-out related items (including, without limitation, elimination of duplicative costs (including with respect to transaction services agreements) and costs and expenses related to information and technology systems establishment or modification), in each case in connection with the performance of the rights and obligations under the Transition Services Agreement referred to in the Acquisition Agreement, shall be excluded; and

 

(18)        the following items shall be excluded:

 

(a)          any net unrealized gain or loss (after any offset) resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic 815 “Derivatives and Hedging”; and

 

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(b)          any net foreign exchange gains or losses (whether or not realized) resulting from the impact of foreign currency changes on the valuation of assets and liabilities on the consolidated balance sheet of UK Holdco and its Restricted Subsidiaries (in each case, including any net loss or gain resulting from hedge arrangements for currency exchange risk).

 

Solely for purposes of calculating EBITDA, the Net Income of UK Holdco and its Restricted Subsidiaries shall be calculated without deducting the income attributable to the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties.

 

In addition, to the extent not already accounted for in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include (i) the amount of proceeds received during such period from business interruption insurance in respect of insured claims for such period, (ii) the amount of proceeds as to which UK Holdco has determined there is reasonable evidence it will be reimbursed by the insurer in respect of such period from business interruption insurance (with a deduction for any amount so added back to the extent denied by the applicable carrier in writing within 180 days or not so reimbursed within 365 days) and (iii) reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any Permitted Investment or any sale, conveyance, transfer or other disposition of assets permitted under this Indenture.

 

Notwithstanding the foregoing, for the purpose of Section 4.04 only (other than Sections 4.04(a)(3)(E) and(F)), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by UK Holdco and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from UK Holdco and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by UK Holdco or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case, only to the extent such amounts increase the amount of Restricted Payments permitted under Sections 4.04(a)(3)(E) and (F).

 

Consolidated Non-cash Charges ” means, with respect to UK Holdco and its Restricted Subsidiaries for any period, the aggregate depreciation, amortization (including amortization of intangibles, deferred financing fees, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees, the non-cash portion of interest expense resulting from the reduction in the carrying value under purchase accounting of the Issuer’s outstanding Indebtedness and commissions, discounts, yield and other fees and charges but excluding amortization of prepaid cash expenses that were paid in a prior period), non-cash impairment, non-cash compensation, non-cash rent and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided that if any non-cash charges referred to in this definition represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to such extent paid.

 

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Consolidated Senior Secured Debt Ratio ” as of any date of determination means the ratio of (1) (x) Consolidated Total Indebtedness of the Issuer and the Guarantors that is secured by a Lien plus the Reserved Indebtedness Amount minus (y) the aggregate amount of unrestricted Cash Equivalents of UK Holdco and its Restricted Subsidiaries determined on a consolidated basis as reflected on the balance sheet in accordance with GAAP, in each case of clause (x) and (y) as of the most recent fiscal period for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the EBITDA of UK Holdco and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case, with such pro forma adjustments to Consolidated Total Indebtedness, Cash Equivalents and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio” (except that, for purposes of determining the amount of Consolidated Total Indebtedness pursuant to clause (1) of this definition, in the event that the Issuer shall classify Indebtedness Incurred on the date of determination as secured in part pursuant to clause (26) of the definition of “Permitted Liens” and in part pursuant to one or more other clauses of such definition (other than Liens Incurred under clause (26) thereof related to Indebtedness Incurred under clauses (a)(2) and (a)(3) of the definition of “Permitted Debt”) any calculation of Consolidated Total Indebtedness that is secured by a Lien for purposes of clause (1)(x) above on such date (but not in respect of any future calculation following such date) shall not include any such Indebtedness (and shall not give effect to any repayment, repurchase, redemption, defeasance or other acquisition, retirement or discharge of Indebtedness from the proceeds thereof) to the extent secured pursuant to any such other clause of such definition). For purposes of calculating the Consolidated Senior Secured Debt Ratio, the Issuer may elect, at the time of the Incurrence of Indebtedness pursuant to this definition, to either (A) give pro forma effect to the Incurrence of the entire committed amount of such Indebtedness, in which case such committed amount may thereafter be borrowed or reborrowed, in whole or in part, from time to time, without further compliance with the Consolidated Senior Secured Debt Ratio component of any provision hereunder, or (B) give pro forma effect to the Incurrence of the actual amount drawn under such revolving Indebtedness, in which case, the ability to Incur the amounts committed to under such Indebtedness will be subject to the Consolidated Senior Secured Debt Ratio (to the extent being Incurred pursuant to such ratio) at the time of each such Incurrence.

 

Consolidated Total Debt Ratio ” as of any date of determination means the ratio of (1) (x) Consolidated Total Indebtedness of UK Holdco and its Restricted Subsidiaries, plus , for purposes of Section 4.03(b)(i)(3), the Reserved Indebtedness Amount minus (y) the aggregate amount of unrestricted Cash Equivalents of UK Holdco and its Restricted Subsidiaries determined on a consolidated basis as reflected on the balance sheet in accordance with GAAP, in each case of clause (x) and (y) as of the most recent fiscal period for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the EBITDA of UK Holdco and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case, with such pro forma adjustments to Consolidated Total Indebtedness, Cash Equivalents and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.”

 

Consolidated Total Indebtedness ” means, as of any date of determination, the aggregate principal amount of Indebtedness of UK Holdco and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis, to the extent required to be recorded on a balance sheet in accordance with GAAP, consisting of Indebtedness for borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes or similar instruments (and excluding, for the avoidance of doubt, Hedging Obligations).

 

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent:

 

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(1)         to purchase any such primary obligation or any property constituting direct or indirect security therefor,

 

(2)         to advance or supply funds:

 

(a)          for the purchase or payment of any such primary obligation; or

 

(b)          to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

 

(3)         to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

Contribution Indebtedness ” means Indebtedness of the Issuer or any Guarantor in an aggregate principal amount not greater than the aggregate amount of cash contributions (other than the Equity Contribution and Excluded Contributions and any such cash contributions that have been used to make a Restricted Payment) made to the capital of the Issuer or UK Holdco after the Closing Date; provided that:

 

(1)         such Contribution Indebtedness shall be Indebtedness with a Stated Maturity later than the Stated Maturity of the Securities and

 

(2)         such Contribution Indebtedness (a) is Incurred within 210 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officer’s Certificate on the Incurrence date thereof.

 

Credit Agreement ” means (1) that certain credit agreement to be entered into on or about the Closing Date by the Tower Borrowers, as term loan borrowers, and Delaware LP Borrower, as a revolving facility borrower, certain Subsidiaries of UK Holdco, as guarantors and revolving facility co-borrowers, the financial institutions named therein and Credit Suisse AG, Cayman Islands Branch, as administrative agent, prior to or in connection with the Transactions, including any related notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case, as amended, supplemented, modified, extended, replaced, renewed, restated, refunded, restructured, increased or refinanced in whole or in part from time to time, including any replacement, refunding or refinancing facility, agreement, indenture or debt facility that increases the amount borrowable or issuable thereunder or alters the maturity thereof or adds entities as additional borrowers, issuers or guarantors thereunder and whether by the same or any other agent, lender, group of lenders, or otherwise, and (2) whether or not the credit agreement referred to in clause (1) remains outstanding, if designated by the Issuer to be included in the definition of Credit Agreement, one or more additional Debt Facilities.

 

Day 1 Acquisition ” means the Acquisition other than the Day 2 Acquisition.

 

Day 2 Acquisition ” means the acquisition by UK Holdco and/or certain of its direct and indirect subsidiaries of any Day 2 Asset, Day 2 Liability and/or Day 2 Subsidiary.

 

Day 2 Assets ” means the Deferred Assets as defined in the Acquisition Agreement.

 

Day 2 Countries ” means the Deferred Closing Countries as defined in the Acquisition Agreement.

 

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Day 2 Liabilities ” means the Deferred Liabilities as defined in the Acquisition Agreement.

 

Day 2 Subsidiaries ” means the Deferred Subsidiaries as defined in the Acquisition Agreement.

 

Debt Facilities ” means one or more credit facilities, debt facilities, loan agreements, indentures, financing trust deeds, commercial paper facilities, note purchase agreements or other financing arrangements (including, without limitation, any Credit Agreement), in each case with banks, lenders, purchasers, funds, investors, trustees, agents or other representatives of any of the foregoing, providing for revolving credit loans, term loans, capital market financings, receivable financings, capital leases, letters of credit or other borrowings or other extensions of credit, including any related notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, replacements, renewals, restatements, refundings, restructurings, increases or refinancings thereof in whole or in part from time to time, including any replacement, refunding or refinancing facility, agreement or indenture that increases the amount borrowable or issuable thereunder or alters the maturity thereof or adds entities as additional borrowers, issuers or guarantors thereunder or otherwise alters the terms and conditions thereof and whether by the same or any other agent, lender, group of lenders or otherwise.

 

Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

 

Delaware LP Borrower ” means Camelot Finance LP.

 

Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by UK Holdco or any one of the Restricted Subsidiaries of UK Holdco in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

Designated Preferred Stock ” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), that is issued for cash (other than to UK Holdco or any of the Subsidiaries or an employee stock ownership plan or trust established by UK Holdco or any of the Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).

 

Discharge ” means, with respect to any Obligations, the payment in full and discharge of all such Obligations and the termination of any commitments or other obligations to extend additional credit. The term “Discharged” shall have a corresponding meaning.

 

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable, in each case at the option of the holder thereof), or upon the happening of any event:

 

(1)         matures or is mandatorily redeemable (other than as a result of a change of control or asset sale), pursuant to a sinking fund obligation or otherwise,

 

(2)         is convertible or exchangeable for Indebtedness or Disqualified Stock, or

 

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(3)         is redeemable at the option of the holder thereof (other than as a result of a change of control or asset sale), in whole or in part, in each case prior to 91 days after the maturity date of the Securities; provided , however , that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any plan for the benefit of employees of UK Holdco or the Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by UK Holdco or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations; provided, further, however , that any Capital Stock held by any future, current or former employee, director, manager or consultant (or their respective trusts, estates, investment funds, investment vehicles or immediate family members), of UK Holdco, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which UK Holdco or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors of UK Holdco (or the compensation committee thereof), in each case pursuant to any stockholders’ agreement, management equity plan, stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because it may be required to be repurchased by UK Holdco or its Subsidiaries; and provided , further, however , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

EBITDA ” means, with respect to UK Holdco and its Restricted Subsidiaries for any period, the Consolidated Net Income of UK Holdco and its Restricted Subsidiaries for such period:

 

(1)         increased (without duplication) by:

 

(a) provision for Taxes based on income or profits or capital, including, without limitation, state, franchise and similar Taxes and foreign withholding Taxes of such Person paid or accrued during such period deducted (and not added back) in computing Consolidated Net Income and payroll taxes related to stock compensation costs, including (i) an amount equal to the amount of Tax distributions actually made to the holders of Capital Stock of such Person or any direct or indirect parent of such Person in respect of such period in accordance with Section 4.04(b)(xii), which shall be included as though such amounts had been paid as income taxes directly by such Person and (ii) penalties and interest related to such taxes or arising from any Tax examinations; plus

 

(b) consolidated Fixed Charges of such Person for such period (including (x) bank fees and (y) costs of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges), together with items excluded from the definition of “Consolidated Interest Expense” pursuant to clauses (1)(t) through (z) thereof, in each case, to the extent the same was deducted (and not added back) in calculating such Consolidated Net Income; plus

 

(c) Consolidated Non-cash Charges of such Person for such period to the extent such non-cash charges were deducted (and not added back) in computing Consolidated Net Income; plus

 

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(d) any expenses (including without limitation legal and professional expenses) or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the Incurrence of Indebtedness permitted to be Incurred by this Indenture, including a refinancing thereof and any amendment or modification to the terms of any such transaction (in each case, (i) including any such transactions consummated prior to the Closing Date, (ii) whether or not such transaction is undertaken but not completed, (iii) whether or not such transaction is permitted by this Indenture and (iv) including any such transaction incurred by any direct or indirect parent company of the Issuer), including such fees, expenses or charges related to the Transactions, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

 

(e) the amount of any restructuring charges, accruals or reserves and business optimization expense deducted (and not added back) in such period in computing Consolidated Net Income, including any such costs Incurred in connection with acquisitions after the Closing Date (including entry into new market/channels and new service or product offerings) and costs related to the closure, reconfiguration and/or consolidation of facilities and costs to relocate employees, integration and transaction costs, retention charges, severance, contract termination costs, recruiting and signing bonuses and expenses, future lease commitments, systems establishment costs, conversion costs and excess pension charges and consulting fees, expenses attributable to the implementation of costs savings initiatives, costs associated with tax projects/audits and costs consisting of professional consulting or other fees relating to any of the foregoing; plus

 

(f) any other non-cash charges, including any write offs or write downs, reducing Consolidated Net Income for such period ( provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

 

(g) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly Owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

 

(h) the amount of management, monitoring, consulting and advisory fees (including termination fees) and related expenses paid or accrued in such period to the Sponsors to the extent otherwise permitted under Section 4.07, to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(i) the “run rate” cost savings, operating expense reductions, restructuring charges and expenses and synergies that are expected (in good faith) to be realized as a result of actions taken or expected to be taken within 24 months after the date of any acquisition, disposition, divestiture, restructuring or the implementation of a cost savings or other similar initiative, as applicable (calculated on a pro forma basis as though such cost savings, operating expense reductions, restructuring charges and expenses and synergies had been realized on the first day of such period as if such cost savings, operating expense reductions, restructuring charges and expenses and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such actions are expected to be taken within 24 months after the consummation of the acquisition, disposition, restructuring or the implementation of an initiative, as applicable, which is expected to result in cost savings, operating expense reductions, restructuring charges and expenses or synergies, and (B) no cost savings, operating expense reductions, restructuring charges and expenses or synergies shall be added pursuant to this defined term to the extent duplicative of any expenses or charges otherwise added to EBITDA, whether through a pro forma adjustment or otherwise, for such period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”); plus

 

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(j) the “run rate” expected cost savings, operating expense reductions including, without limitation, costs and expenses related to information and technology systems establishment, modernization or modification, restructuring charges and expenses and synergies related to the Transactions projected by UK Holdco in good faith to result from actions with respect to which substantial steps have been, will be, or are expected to be, taken (in the good faith determination of UK Holdco), calculated on a pro forma basis as though such cost savings, operating expense reductions, restructuring charges and expenses and synergies had been realized on the first day of such period as if such cost savings, operating expense reductions, restructuring charges and expenses and synergies were realized during the entirety of such period, net of the amount of actual benefits realized during such period from such actions, and which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”; plus

 

(k) the amount of loss or discount on sale of receivables and related assets to the Receivables Subsidiary in connection with a Receivables Financing, to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(l) any costs or expenses Incurred by UK Holdco or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement or any accelerated vesting of awards in anticipation of the Transactions, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of UK Holdco or net cash proceeds of an issuance of Equity Interest of UK Holdco (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in Section 4.04(a)(3) to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(m) the Tax effect of any items excluded from the calculation of Consolidated Net Income pursuant to clauses (1), (3), (4) and (8) of the definition thereof; plus

 

(n) to the extent not already otherwise included herein, adjustments and add-backs made in calculating “pro forma Adjusted EBITDA” for the pro forma twelve months ended June 30, 2016 included in the Offering Memorandum; plus

 

(o) earn out obligations Incurred in connection with any permitted acquisition or other Investment permitted under this Indenture and paid or accrued during such period; plus

 

(2)         decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period;

 

  - 16 -  

 

 

(3)         increased (by losses) or decreased (by gains) by (without duplication) the application of FASB Interpretation No. 45 (Guarantees).

 

Equity Contribution ” means the cash equity contributions to UK Holdco made, either directly or indirectly, by the Permitted Holders in order to provide the relevant acquisition entities with capital, when taken together with the proceeds of the offering of the Securities and the borrowings under the Credit Agreement, sufficient to consummate the Acquisition.

 

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

Equity Offering ” means any public or private sale after the Closing Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

 

(1)         public offerings with respect to such Person’s common stock registered on Form S-8;

 

(2)         issuance to any Restricted Subsidiary; and

 

(3)         any such public or private sale that constitutes an Excluded Contribution.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

Excluded Contributions ” means the net cash proceeds and Cash Equivalents or Fair Market Value of assets or property received by or contributed to the Issuer or the Guarantors after the Closing Date (other than amounts provided by or contributed to the Issuer or a Guarantor from or by UK Holdco or a Restricted Subsidiary) from:

 

(1)         contributions to its common or preferred equity capital, and

 

(2)         the sale (other than to UK Holdco or a Restricted Subsidiary or management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Refunding Capital Stock, Disqualified Stock and Designated Preferred Stock) of the Issuer or any direct or indirect parent,

 

in each case, designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an Officer of UK Holdco on or about the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, the proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).

 

Excluded Subsidiary ” means any Subsidiary of UK Holdco that is:

 

(1)         a non-Wholly Owned Subsidiary as of the Closing Date;

 

(2)         a joint venture;

 

(3)         a captive insurance company;

 

(4)         a not-for-profit Subsidiary;

 

  - 17 -  

 

 

(5)         a special purpose securitization entity; and

 

(6)         a Subsidiary incorporated in China or India.

 

Fair Market Value ” means, with respect to any Investment, asset, property or transaction, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction (as determined in good faith by UK Holdco).

 

FHC Tower Borrower ” means Camelot Cayman LP.

 

Financial Definitions ” means the definitions of Consolidated Interest Expense, Consolidated Net Income, Consolidated Senior Secured Debt Ratio, Consolidated Total Debt Ratio, Consolidated Total Indebtedness, EBITDA, Fixed Charge Coverage Ratio, Fixed Charges, Net Income and Total Assets, and any defined term or section reference included in such definitions.

 

Fixed Charge Coverage Ratio ” means, with respect to UK Holdco and its Restricted Subsidiaries for any period, the ratio of EBITDA of UK Holdco and its Restricted Subsidiaries for such period to the Fixed Charges of UK Holdco and its Restricted Subsidiaries for such period. In the event that UK Holdco or any of its Restricted Subsidiaries Incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than in the case of revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Fixed Charge Coverage Ratio Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

 

For purposes of calculating the Fixed Charge Coverage Ratio, Investments (including any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary), acquisitions, dispositions, mergers (including the Transactions), consolidations and disposed or discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and operational changes, that UK Holdco or any of its Restricted Subsidiaries has both determined to make and made after the Closing Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date (each, for purposes of this definition, a “ pro forma event ”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers (including the Transactions), consolidations, discontinued operations and operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became UK Holdco or a Restricted Subsidiary or was merged with or into UK Holdco or any Restricted Subsidiary since the beginning of such period shall have made or effected any Investment, acquisition, disposition, merger, consolidation or discontinued operation, in each case with respect to an operating unit of a business, or operational change that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, discontinued operation, or operational change had occurred at the beginning of the applicable four-quarter period.

 

  - 18 -  

 

 

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of UK Holdco to the extent identifiable and supportable. Any such pro forma calculation may include, without duplication, (1) adjustments appropriate to reflect cost savings, operating expense reductions, restructuring charges and expenses and synergies reasonably expected to result from the applicable event to the extent set forth in the definition of “EBITDA” and (2) all adjustments of the nature set forth under “Unaudited Pro Forma Combined Financial Information” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to the reference period.

 

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of UK Holdco to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as UK Holdco may designate.

 

Fixed Charges ” means, with respect to any Person for any period, the sum of:

 

(1)         Consolidated Interest Expense of such Person for such period, and

 

(2)         all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries:

 

provided , however , that, notwithstanding the foregoing, any charges arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred Stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges.

 

Fixed GAAP Date ” means the Closing Date; provided that at any time after the Closing Date, the Issuer may by written notice to the Trustee elect to change the Fixed GAAP Date, and upon such notice, the Fixed GAAP Date shall be, at the election of the Issuer, either the first day of the fiscal quarter in which such notice is delivered or the first day of fiscal quarter beginning after delivery of such notice, and for all periods thereafter.

 

Fixed GAAP Terms ” means (a) the definitions of the terms “Capitalized Lease Obligation,” “Consolidated Interest Expense,” “Consolidated Net Income,” “Consolidated Senior Secured Debt Ratio,” “Consolidated Total Debt Ratio,” “Consolidated Total Indebtedness,” “EBITDA” and “Indebtedness,” (b) all defined terms in this Indenture to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions, and (c) any other term or provision of this Indenture or the Securities that, at the Issuer’s election, may be specified by the Issuer by written notice to the Trustee from time to time.

 

  - 19 -  

 

 

Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory or the District of Columbia or any direct or indirect Subsidiary of such Restricted Subsidiary.

 

GAAP ” means generally accepted accounting principles in the United States of America that are in effect on the Fixed GAAP Date (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Indenture); provided , that at any date after the Closing Date the Issuer may make an irrevocable election to establish that GAAP shall mean GAAP as in effect on a date that is on or prior to the date of such election. At any time after the date of this Indenture, the Issuer may elect to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Indenture); provided that any calculation or determination in this Indenture that requires the application of GAAP for periods that include fiscal quarters ended prior to the Issuer’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.

 

guarantee ” means, as to any Person, a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness of another Person.

 

Guarantee ” means a guarantee of the Securities pursuant to this Indenture.

 

Guarantor ” means any Person that Incurs a Guarantee; provided that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor.

 

Guaranty and Security Principles ” means the guaranty and security principles appended to the Credit Agreement, as of the Closing Date, as applied mutatis mutandis with respect to the Securities in good faith by UK Holdco.

 

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

 

(1)         currency exchange, interest rate or commodity Swap Agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

 

(2)         other agreements or arrangements designed to manage or protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

 

Holder ” means the Person in whose name a Security is registered on the Registrar’s books and reflected in the register held by the Issuer at its registered office.

 

IFRS ” means International Financial Reporting Standards (formerly International Accounting Standards) as issued by the International Accounting Standards Board and its predecessor as in effect from time to time.

 

Incur ” means, with respect to any Indebtedness, issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

 

  - 20 -  

 

 

Indebtedness ” means, with respect to any Person:

 

(1)         the principal and premium (if any) of any Indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property, asset or business, except (i) any such balance that constitutes a trade payable, accrued expense or similar obligation to a trade creditor and (ii) any acquisition earnout obligations, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, other than Hedging Obligations that are Incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that Indebtedness of any direct or indirect parent of UK Holdco appearing upon the balance sheet of UK Holdco solely by reason of push-down accounting under GAAP shall be excluded;

 

(2)         to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations described in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

 

(3)         to the extent not otherwise included, obligations described in clause (1) of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

 

provided that (a) Contingent Obligations Incurred in the ordinary course of business, (b) obligations under or in respect of Receivables Financings, (c) Obligations associated with other post-employment benefits and pension plans, (d) any operating leases as such an instrument would be determined in accordance with GAAP on the date of this Indenture, (e) in connection with the purchase by UK Holdco or its Restricted Subsidiaries of any business, post-closing payment adjustments to which the seller may be entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing until 30 days after any such obligation becomes contractually due and payable, (f) deferred or prepaid revenues, (g) any Capital Stock (other than Disqualified Stock), (h) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller and (i) premiums payable to, and advance commissions or claims payments from, insurance companies shall not constitute Indebtedness.

 

Indenture ” means this Indenture as amended or supplemented from time to time.

 

Independent Financial Advisor ” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing that is, in the good faith determination of the Issuer or its direct or indirect parent, qualified to perform the task for which it has been engaged.

 

Initial Purchasers ” means the several initial purchasers listed on Schedule I to the Purchase Agreement.

 

  - 21 -  

 

 

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

 

Investment Grade Securities ” means:

 

(1)         securities issued or directly and fully guaranteed or insured by the U.S., Canadian, any country that is a member of the European Union, the United Kingdom, Japan or Switzerland government or any agency or instrumentality thereof (other than Cash Equivalents),

 

(2)         securities that have an Investment Grade Rating,

 

(3)         investments in any fund that invests at least 95% of its assets in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and

 

(4)         corresponding instruments in countries other than the United States customarily utilized for high quality investments.

 

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances or extensions of credit to customers and vendors, commission, travel and similar advances to officers, directors, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

 

(1)         “Investments” shall include the portion (proportionate to UK Holdco’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of UK Holdco at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, UK Holdco shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

 

(a)          UK Holdco’s “Investment” in such Subsidiary at the time of such redesignation, less

 

(b)          the portion (proportionate to UK Holdco’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

 

(2)         any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by UK Holdco.

 

  - 22 -  

 

 

For the avoidance of doubt, a guarantee by UK Holdco or a Restricted Subsidiary of the obligations of another Person shall not be deemed to be an Investment by UK Holdco or such Restricted Subsidiary in such Person to the extent that such obligations of such Person are in favor of UK Holdco or any Restricted Subsidiary, and in no event shall a guarantee of an operating lease or other business contract of UK Holdco or any Restricted Subsidiary be deemed an Investment.

 

Lien ” means, with respect to any asset, any mortgage, lien, pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.

 

Management Agreement ” means one or more management or consulting services agreements, dated on or about the Closing Date between UK Holdco or any direct or indirect parent company or any Restricted Subsidiary and the Sponsors and any other beneficial owner in the equity in the Issuer or any direct or indirect parent company of the Issuer as of the Closing Date, or a successor agreement between the Issuer or any of its Affiliates and such parties, as may be amended, supplemented or otherwise modified from time to time; provided that such amendments, supplements or modifications are not materially adverse to the Holders as determined in good faith by UK Holdco.

 

Management Investor ” means any Person who is a director, officer or otherwise a member of management of UK Holdco, any of the Restricted Subsidiaries of UK Holdco or any of UK Holdco’s direct or indirect parent companies on the Closing Date immediately after giving effect to the Transactions.

 

Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

Net Cash Proceeds ” means the aggregate cash proceeds and Fair Market Value of any other Cash Equivalents received by UK Holdco or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash or other Cash Equivalents received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, Taxes paid or payable as a result thereof, including any payments to any direct or indirect parent in respect thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by UK Holdco or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by UK Holdco or any of its Restricted Subsidiaries after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

 

  - 23 -  

 

 

Net Income ” means, with respect to any Person, the net income (loss) attributable to such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

 

Notes Documents ” means this Indenture, the Securities and any supplemental indentures to this Indenture, including for the purpose of providing Guarantees by additional Guarantors.

 

Obligations ” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness.

 

Offering Memorandum ” means the final offering memorandum relating to the offering of the Original Securities dated September 15, 2016.

 

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, President, any Executive Vice President, Senior Vice President, Vice President or Assistant Vice President, the Controller, the Treasurer, the Assistant Treasurer, the Secretary or any duly authorized manager or director of UK Holdco or any other individual designated as an “Officer” for purposes of this Indenture by the Board of Directors of UK Holdco.

 

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by any one Officer of UK Holdco, who must be the principal executive officer, the principal financial officer, the treasurer, the controller, the general counsel, the principal accounting officer or any duly authorized manager or director of UK Holdco that meets the requirements set forth in this Indenture.

 

Opinion of Counsel ” means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements set forth in this Indenture. The counsel may be an employee of or counsel to UK Holdco or any Affiliate of UK Holdco.

 

Paying Agent ” means an office or agency maintained by UK Holdco pursuant to the terms of this Indenture, where Securities may be presented for payment.

 

Permitted Asset Swap ” means the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between UK Holdco or any of its Restricted Subsidiaries and another Person; provided , that any cash or Cash Equivalents received must be applied in accordance with Section 4.06.

 

Permitted Holders ” means (i) the Sponsors, (ii) the Management Investors, (iii) any Person that has no material assets other than the Capital Stock of UK Holdco and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of UK Holdco, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any Permitted Holder specified in clause (i) above, holds more than 50% of the total voting power of the Voting Stock thereof, (iv) any other beneficial owner in the equity in UK Holdco or any direct or indirect parent company of UK Holdco as of the Closing Date and (v) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any Permitted Holder specified in clauses (i) or (iv) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of UK Holdco or of a Permitted Holder specified in clause (iii) above (a “ Permitted Holder Group ”), so long as no Person or other “group” (other than a Permitted Holder specified in clauses (i) and (iii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group, together with its Affiliates, whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter constitute an additional Permitted Holder.

 

  - 24 -  

 

 

Permitted Investments ” means:

 

(1)         any Investment in UK Holdco (including the Securities) or any Restricted Subsidiary;

 

(2)         any Investment in Cash Equivalents or Investment Grade Securities;

 

(3)         (x) any Investment by UK Holdco or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, UK Holdco or a Restricted Subsidiary and (y) any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

 

(4)         any Investment in securities or other assets, including earnouts, not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;

 

(5)         any Investment (x) existing on the Closing Date (including Investments deemed to be made in any Person related to any Day 2 Country), (y) made pursuant to binding commitments in effect on the Closing Date and (z) that replaces, refinances, refunds, renews or extends any Investment described under either of the immediately preceding clauses (x) or (y); provided that any such Investment is in an amount that does not exceed the amount replaced, refinanced, refunded, renewed or extended except to the extent required by the terms of such Investment on the Closing Date;

 

(6)         loans and advances to, and guarantees of Indebtedness of, employees of UK Holdco (or any of its direct or indirect parent companies) or a Restricted Subsidiary not in excess of the greater of (x) $20.0 million and (y) 0.50% of Total Assets (at the time such Investment is made) outstanding at any one time, in the aggregate;

 

(7)         any Investment acquired by UK Holdco or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by UK Holdco or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, (b) in good faith settlement of delinquent obligations of, and other disputes with Persons who are not Affiliates or (c) as a result of a foreclosure by UK Holdco or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(8)         Hedging Obligations permitted under Section 4.03(b)(ix);

 

  - 25 -  

 

 

(9)         additional Investments by UK Holdco or any of its Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) that are at the time outstanding, not to exceed the greater of (x) $110.0 million and (y) 2.75% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding; provided , however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

 

(10)        loans and advances to (or guarantees of Indebtedness of) future, present or former officers, directors, employees and consultants for business related travel expenses (including entertainment expense), moving and relocation expenses, Tax advances, payroll advances and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such Person’s purchase or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent company thereof under compensation plans approved by the Board of Directors of UK Holdco (or any direct or indirect parent company thereof) in good faith;

 

(11)        Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.04(a)(3);

 

(12)        any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.07(b) (except transactions described in clauses (ii), (v), (ix)(B), (xxiii) and (xxiv) of such Section);

 

(13)        Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(14)        guarantees issued in accordance with Sections 4.03 and 4.10;

 

(15)        [reserved];

 

(16)        Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment (including, without limitation, prepayments to suppliers in the ordinary course of business) or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

 

(17)        any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided , however , that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest;

 

(18)        Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 4.06;

 

  - 26 -  

 

 

(19)        (x) Investments in joint ventures of UK Holdco or any of its Restricted Subsidiaries existing on the Closing Date, (y) additional Investments in joint ventures in an aggregate amount not to exceed the greater of (I) $110.0 million and (II) 2.75% of Total Assets at any one time outstanding (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value) and (z) additional Investments in Similar Businesses in an aggregate amount not to exceed the greater of (I) $100.0 million and (II) 2.5% of Total Assets at any one time outstanding (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (19) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be a Restricted Subsidiary;

 

(20)        Investments of a Restricted Subsidiary acquired after the Closing Date or of an entity merged into or consolidated with a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

(21)        advances, loans, rebates and extensions of credit (including the creation of receivables) to suppliers, customers and vendors, and performance guarantees, in each case in the ordinary course of business; and

 

(22)        the acquisition of assets or Capital Stock solely in exchange for the issuance of common equity securities of UK Holdco or a Restricted Subsidiary.

 

Permitted Liens ” means, with respect to any Person:

 

(1)         pledges or deposits by such Person in connection with workmen’s compensation, employment or unemployment insurance and other types of social security legislation, employee source deductions, goods and services Taxes, sales Taxes, municipal Taxes, corporate Taxes and pension fund obligations, or good faith deposits, prepayments or cash pledges to secure bids, tenders, contracts (other than for the payment of Indebtedness) or leases, subleases, licenses, sublicenses or similar agreements to which such Person is a party, performance and return of money bonds and other similar obligations Incurred in the ordinary course of business, or deposits to secure public or statutory obligations of such Person or deposits of cash or government bonds to secure surety, stay, customs or appeal bonds or statutory bonds to which such Person is a party, or deposits as security for contested Taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

(2)         Liens imposed by law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s, construction contractors’ and mechanics’ and other like Liens, in each case for sums not overdue for a period of more than 30 days (other than with respect to Subsidiaries formed in Germany) or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are being maintained in accordance with GAAP;

 

(3)         Liens for Taxes, assessments or other governmental charges (i) not overdue for more than 60 days or (ii) which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are being maintained on the books of such Person in accordance with GAAP (or, in the case of any Foreign Subsidiary, the accounting principles applicable in the relevant jurisdiction) or that are immaterial to UK Holdco and its Restricted Subsidiaries taken as a whole;

 

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(4)         Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements, or letters of credit or bankers’ acceptances issued, and completion guarantees provided for, in each case pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

(5)         survey exceptions, encumbrances, leases, subleases, encroachments, protrusions, easements or reservations of, or rights of others for, sublicenses, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which, in each case, do not in the aggregate materially impair their use in the operation of the business of such Person taken as a whole;

 

(6)         Liens Incurred to secure Obligations in respect of Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(iv); provided that such Lien extends only to the assets and/or Capital Stock, the acquisition, lease, construction, repair, replacement or improvement of which is financed thereby and any income or profits thereof; provided, further, that individual financings provided by a lender may be cross collateralized to other financings provided by such lender or its Affiliates;

 

(7)         Liens existing on the Closing Date;

 

(8)         Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by UK Holdco or any Restricted Subsidiary (other than the proceeds or products of such assets, property or shares of stock or improvements thereon);

 

(9)         Liens on assets or on property at the time UK Holdco or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger or consolidation with or into UK Holdco or any Restricted Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens may not extend to any other assets or property owned by UK Holdco or any Restricted Subsidiary (other than the proceeds or products of such assets or property or shares of stock or improvements thereon);

 

(10)        Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to UK Holdco or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03;

 

(11)        Liens securing Hedging Obligations and Bank Products;

 

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(12)        Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(13)        leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of UK Holdco or any of its Restricted Subsidiaries;

 

(14)       Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases or consignments entered into by UK Holdco and its Restricted Subsidiaries in the ordinary course of business;

 

(15)        Liens in favor of UK Holdco or any Restricted Subsidiary;

 

(16)        Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

 

(17)        pledges and deposits made in the ordinary course of business to secure liability to insurance carriers, insurance companies and brokers;

 

(18)        Liens on the Equity Interests and Indebtedness of Unrestricted Subsidiaries and joint ventures that are not Restricted Subsidiaries;

 

(19)        grants of software and other technology licenses in the ordinary course of business;

 

(20)        judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(21)        Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(22)        Liens Incurred to secure Cash Management Services (and other “Bank Products”), owed to a lender under the Credit Agreement in the ordinary course of business;

 

(23)        Liens on equipment of UK Holdco or any Restricted Subsidiary granted in the ordinary course of business to UK Holdco’s or such Restricted Subsidiary’s client at which such equipment is located;

 

(24)        Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (11), (15) and (26); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien ( plus proceeds or products of such property or improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11), (15) and (26) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay accrued and unpaid interest and any fees and expenses, including any premium and defeasance costs, related to such refinancing, refunding, extension, renewal or replacement;

 

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(25)        other Liens securing obligations which obligations do not exceed the greater of (x) $200.0 million and (y) 5.0% of Total Assets at any one time outstanding;

 

(26)        Liens securing Indebtedness (x) permitted to be Incurred pursuant to Section 4.03(b)(i)(1) and (y) in an aggregate principal amount not to exceed the maximum amount of Indebtedness such that the Consolidated Senior Secured Debt Ratio (at the time of Incurrence of such Indebtedness after giving pro forma effect thereto in a manner consistent with the calculation of the Fixed Charge Coverage Ratio) would not be greater than 4.90 to 1.00;

 

(27)        Liens on receivables and related assets including proceeds thereof being sold in factoring arrangements entered into in the ordinary course of business;

 

(28)        Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of UK Holdco or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations Incurred in the ordinary course of business of UK Holdco and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of UK Holdco or any of its Restricted Subsidiaries in the ordinary course of business;

 

(29)        Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts Incurred in the ordinary course of business and not for speculative purposes;

 

(30)        Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 4.03; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement;

 

(31)        restrictions on dispositions of assets to be disposed of pursuant to merger agreements, stock or asset purchase agreements and similar agreements;

 

(32)        customary options, put and call arrangements, rights of first refusal and similar rights relating to Investments in joint ventures, partnerships and similar investment vehicles;

 

(33)        any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of UK Holdco or any Restricted Subsidiary;

 

(34)        Liens (i) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business or (ii) on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

 

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(35)        Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code (or similar filings in other applicable jurisdictions) on items in the course of collection; (ii) attaching to a commodity trading account in the ordinary course of business; and (iii) in favor of a banking or other financial institution arising as a matter of law or under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and which are within the general parameters customary in the banking industry (including, without limitation, any Lien arising by entering into standard banking arrangements ( AGB-Banken oder AGB-Sparkassen ) in Germany);

 

(36)        (i) Liens solely on any cash earnest money deposits made in connection with any letter of intent or purchase agreement in connection with an Investment permitted under this Indenture and (ii) Liens on advances of cash or Cash Equivalents in favor of the seller of any property to be acquired in a Permitted Investment to be applied against the purchase price for such Investment;

 

(37)        customary Liens on deposits required in connection with the purchase of property, equipment and inventory, in each case Incurred in the ordinary course of business;

 

(38)        Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge, repayment or redemption of Indebtedness; provided that such defeasance, discharge or redemption is permitted under this Indenture;

 

(39)        Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets;

 

(40)        Liens given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of UK Holdco or a Restricted Subsidiary in the ordinary course of business; provided that such Liens do not materially interfere with the operations of UK Holdco and its Restricted Subsidiaries, taken as a whole;

 

(41)        Liens arising out of or deemed to exist in connection with any financing transaction of the type described in clause (m) of the definition of “Asset Sale”;

 

(42)        Liens securing the Securities and the Guarantees; and

 

(43)        (i) pledges, deposits or Liens arising as a matter of law in the ordinary course of business in connection with workers’ compensation, payroll Taxes, unemployment insurance and other social security legislation and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to UK Holdco or any Restricted Subsidiary(including, without limitation, any Liens Incurred pursuant to Section 8a of the German Old Age Employees Part Time Act ( Altersteilzeitgesetz ) or Section 7e of the Fourth Book of the German Social Code ( Sozialgesetzbuch IV )).

 

Person ” means any natural person, corporation, limited partnership, general partnership, limited liability company, limited liability partnership, joint venture, association, joint-stock company, trust, bank trust company, land trust, business trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity whether legal or not.

 

Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or redemptions upon liquidation, dissolution or winding up.

 

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Proceeds Bonds ” means the quoted Eurobonds issued pursuant to the loans made to UK Holdco of (i) the proceeds from the issuance of the Securities, the principal amount of which shall be equal to the aggregate principal amount of the Securities issued on the Closing Date and (ii) the proceeds from the loan from Cayman Co comprising the proceeds of term loans under the Credit Agreement borrowed on the Closing Date, the principal amount of which shall be equal to the aggregate principal amount of such loan from Cayman Co.

 

Purchase Money Note ” means a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from UK Holdco or any Subsidiary of UK Holdco to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity.

 

Qualified Receivables Financing ” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

 

(1)         the Board of Directors of UK Holdco shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to UK Holdco and the Receivables Subsidiary,

 

(2)         all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by UK Holdco), and

 

(3)         the financing terms, covenants, termination events and other provisions thereof shall be market terms at the time the receivables financing is first introduced (as determined in good faith by UK Holdco and it being understood that such terms, covenants, termination events and other provisions may subsequently be modified so long as such modifications are on market terms at the time of any such modification) and may include Standard Securitization Undertakings.

 

The grant of a security interest in any accounts receivable of UK Holdco or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure any Indebtedness shall not be deemed a Qualified Receivables Financing.

 

Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Securities for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” as defined for purposes of Section 3(a)(62) of the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

 

Receivables Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

 

Receivables Financing ” means any transaction or series of transactions that may be entered into by UK Holdco or any Subsidiary of UK Holdco pursuant to which UK Holdco or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by UK Holdco or any of its Subsidiaries) and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of UK Holdco or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by UK Holdco or any such Subsidiary in connection with such accounts receivable.

 

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Receivables Repurchase Obligation ” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

 

Receivables Subsidiary ” means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with UK Holdco in which UK Holdco or any Subsidiary of UK Holdco makes an Investment and to which UK Holdco or any Subsidiary of UK Holdco transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of UK Holdco and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of UK Holdco (as provided below) as a Receivables Subsidiary and:

 

(a)          no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by UK Holdco or any other Subsidiary of UK Holdco (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates UK Holdco or any other Subsidiary of UK Holdco in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of UK Holdco or any other Subsidiary of UK Holdco, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings,

 

(b)          with which neither UK Holdco nor any other Subsidiary of UK Holdco has any material contract, agreement, arrangement or understanding other than on terms which UK Holdco reasonably believe to be no less favorable to UK Holdco or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of UK Holdco, and

 

(c)          to which neither UK Holdco nor any other Subsidiary of UK Holdco has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

Any such designation by the Board of Directors of UK Holdco shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of UK Holdco giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.

 

Related Business Assets ” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by UK Holdco or a Restricted Subsidiary in exchange for assets transferred by UK Holdco or a Restricted Subsidiary will not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

 

Restricted Investment ” means an Investment other than a Permitted Investment.

 

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Restricted Subsidiary ” means, at any time any direct or indirect Subsidiary of UK Holdco (including the Issuer) that is not then an Unrestricted Subsidiary; provided , however , that upon an Unrestricted Subsidiary’s ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

 

Sale/Leaseback Transaction ” means any arrangement with any Person or Persons, whereby in contemporaneous or substantially contemporaneous transactions UK Holdco or any Restricted Subsidiary thereof sells substantially all of its right, title and interest in any property and, in connection therewith, UK Holdco or a Restricted Subsidiary thereof acquires, leases or licenses back the right to use all or a material portion of such property.

 

S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor to the rating agency business thereof.

 

SEC ” means the U.S. Securities and Exchange Commission.

 

Secured Indebtedness ” means Indebtedness that is secured by a Lien.

 

Securities Act ” means the Securities Act of 1933, as amended.

 

Senior Indebtedness ” means with respect to any Person

 

(1)         all Indebtedness of such Person, whether outstanding on the Closing Date or thereafter Incurred including, without limitation, Indebtedness Incurred by any Guarantor under the Credit Agreement described in clause (1) of the definition thereof; and

 

(2)         all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above unless, in the case of clauses (1) and (2), the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness or other Obligations are subordinated in right of payment to the Securities or the Guarantee, of such Person; provided that Senior Indebtedness shall not include:

 

(A)         any obligation of such Person to UK Holdco or any Subsidiary or to any joint venture in which UK Holdco or any Restricted Subsidiary has an interest;

 

(B)         any liability for federal, state, local or other Taxes owed or owing by such Person;

 

(C)         any accounts payable or other liability to trade creditors in the ordinary course of business (including guarantees thereof as instruments evidencing such liabilities);

 

(D)         any Indebtedness or other Obligation of such Person that is subordinate or junior in right of payment with respect to any other Indebtedness or other Obligation of such Person; or

 

(E)         that portion of the Indebtedness that at the time of Incurrence is Incurred in violation of this Indenture.

 

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Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” within the meaning of Rule 1-02 under the Securities Act as such regulation is in effect on the Closing Date.

 

Similar Business ” means any business, service or other activity engaged in by UK Holdco, any Restricted Subsidiaries of UK Holdco, or any direct or indirect parent of UK Holdco on the Closing Date and any business, service or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which UK Holdco and its Restricted Subsidiaries are engaged on the Closing Date.

 

Sponsors ” means (i) Onex Corporation, Onex Partners IV LP, Onex Partners Manager LP and/or one or more other investment funds advised, managed or controlled by Onex Corporation; and (ii) Baring Private Equity Asia GP VI, L.P. and the investment fund managed and controlled by it, and, in each case (whether individually or as a group), their Affiliates and any investment funds that have granted to the foregoing control in respect of their investment in UK Holdco, any direct or indirect parent company of UK Holdco and/or any of the Restricted Subsidiaries of UK Holdco, but, in any event, excluding any of their respective portfolio companies.

 

Standard Securitization Undertakings ” means representations, warranties, covenants, indemnities and guarantees of performance entered into by UK Holdco or any Subsidiary of UK Holdco which UK Holdco has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

 

Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

 

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms contractually subordinated in right of payment to the Securities, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms contractually subordinated in right of payment to its Guarantee. For purposes of this Indenture, no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or a Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor arrangements giving one or more of such holders priority over the other holders in the collateral held by them.

 

Subsidiary ” means, with respect to any Person (1) any corporation, partnership, limited liability company, unlimited liability company, association, joint venture or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity and (3) any Person that is consolidated in the consolidated financial statements of the specified Person in accordance with GAAP; provided , however , that, other than with respect to the calculation of any financial metric (including, but not limited to, the Financial Definitions), no Day 2 Subsidiary shall constitute a Subsidiary until such Day 2 Subsidiary is acquired.

 

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Subsidiary Guarantor ” means a Guarantor that is a Subsidiary of UK Holdco.

 

Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided , that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of UK Holdco or any of the Subsidiaries shall be a Swap Agreement.

 

Tax ” means any tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and any other additions thereto, and, for the avoidance of doubt, including any withholding or deduction for or on account of Tax). “Taxes” and “Taxation” shall be construed to have corresponding meanings.

 

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb), as amended.

 

Total Assets ” means the total consolidated assets of UK Holdco and its Restricted Subsidiaries, as shown on the most recent consolidated balance sheet of UK Holdco and its Restricted Subsidiaries (giving pro forma effect to any acquisitions or dispositions of assets or properties that have been made by UK Holdco or any of its Restricted Subsidiaries subsequent to the date of such balance sheet, including through mergers or consolidations).

 

Tower Borrowers ” means Delaware LP Borrower and the FHC Tower Borrower or any successors thereto.

 

Tower Structure Transactions ” means (i) the transactions set forth under the heading “—Related Party Transactions—The Financing Transactions—Tower Transactions” in the Offering Memorandum, (ii) any amendments thereto from time to time or (iii) any future transactions that are similar to the transactions set forth under such heading providing for a loan between UK Holdco and/or a Restricted Subsidiary and an entity directly or indirectly controlled by Onex Corporation in an aggregate principal amount that is substantially equal to and at an interest rate that is substantially similar to a related Debt Facility under which UK Holdco and/or a Restricted Subsidiary is a joint and several obligor or guarantor and that UK Holdco and/or its Restricted Subsidiaries are permitted to Incur under this Indenture; provided , in the case of the transactions described in (ii) and (iii) that such transactions are not materially disadvantageous to the Holders, when taken as a whole, as compared to such transactions as in effect on the Closing Date, solely as a result of the fact that UK Holdco or the Restricted Subsidiary, as applicable, received the proceeds of the relevant Debt Facility indirectly pursuant to such transactions rather than directly from the banks, lenders, purchasers or other investors in the relevant Debt Facility.

 

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Transactions ” means all the transactions as described in the Offering Memorandum under “The Transactions,” including the transactions contemplated by the Acquisition Agreement, the Acquisition, the Equity Contribution, the borrowings under the Credit Agreement, the issuance of the Securities, the Day 2 Acquisition and the repayment or redemption of certain indebtedness and the payment of any related fees and expenses.

 

Treasury Rate ” means , as of the applicable redemption date, the yield to maturity as of the earlier of (a) the date of the redemption notice or (b) the date on which such notes are defeased or satisfied and discharged or redeemed, of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date or the date of such defeasance or satisfaction and discharge, as applicable, to October 15, 2019; provided , however , that if the period from the date of such notice, defeasance or satisfaction and discharge, as applicable, to October 15, 2019 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

Trust Officer ” means, when used with respect to the Trustee, any officer of the Trustee within the corporate trust department (or any successor unit or department) of the Trustee assigned to the corporate trust office of the Trustee and responsible for administering this Indenture, and also means, with respect to a particular corporate trust matter relating to this Indenture, any other officer to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

 

Trustee ” means the party named as such in the Preamble to this Indenture until a successor replaces it and, thereafter, means the successor.

 

UK Holdco ” means to Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales and the direct parent of the Issuer.

 

Unrestricted Subsidiary ” means:

 

(1)         any direct or indirect Subsidiary of UK Holdco (other than the Issuer) that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of UK Holdco in the manner provided below; and

 

(2)         any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of UK Holdco may designate any direct or indirect Subsidiary of UK Holdco (including any existing Subsidiary and any newly acquired or newly formed direct or indirect Subsidiary of UK Holdco) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, UK Holdco or any other Subsidiary of UK Holdco that is not a Subsidiary of the Subsidiary to be so designated; provided , however , that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of UK Holdco or any of its Restricted Subsidiaries; provided , further , however , that either:

 

(a)          the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

 

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(b)          if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.

 

The Board of Directors of UK Holdco may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

 

(x)          (1) UK Holdco could Incur $1.00 of additional Indebtedness as Ratio Debt or (2) the Fixed Charge Coverage Ratio for UK Holdco and its Restricted Subsidiaries would be greater than or equal to such ratio for UK Holdco and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

 

(y)          no Event of Default shall have occurred and be continuing.

 

Any such designation by the Board of Directors of UK Holdco shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of UK Holdco or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

 

U.S. Government Obligations ” means securities that are:

 

(1)         direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

 

(2)         obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

 

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt;

 

provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.

 

US LLC ” means Camelot Finance LLC.

 

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

Weighted Average Life to Maturity ” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the number of years (and/or portion thereof) obtained by dividing (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of such Indebtedness or redemption or similar payment, in respect of such Disqualified Stock or Preferred Stock, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

 

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Wholly Owned Restricted Subsidiary ” means any Wholly Owned Subsidiary that is a Restricted Subsidiary.

 

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares or interests required to be held by foreign nationals or other third parties to the extent required by applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

 

SECTION 1.02.          Other Definitions

 

Term   Defined in Section
Acceptable Agreement   4.06(b)
Additional Amounts   2.15(b)
Affiliate Transaction   4.07(a)
Agent Members   Appendix A
Applicable Law   12.18
Asset Sale Offer   4.06(b)
Authenticating Agent   2.03
Authentication Order   2.03
Bankruptcy Law   6.01
Change in Tax Law   3.10(a)(ii)
Change of Control Offer   4.08(b)
Change of Control Payment   4.08(a)
Clearstream   Appendix A
covenant defeasance option   8.01
Covenant Suspension Event   4.13(a)
Custodian   6.01
Definitive Security   Appendix A
Depository   Appendix A
Disposition   1.01
Euroclear   Appendix A
Event of Default   6.01
Excess Proceeds   4.06(b)
Global Securities   Appendix A
Global Securities Legend   Appendix A
Guaranteed Obligations   11.01(a)
IAI   Appendix A
Increased Amount   4.11
legal defeasance option   8.01
Luxembourg Guarantor   11.02(b)(i)(1)
Maximum Fixed Repurchase Price   1.04(h)(ii)
Notice of Default   6.01
Offer Amount   3.09(b)
Offer Period   3.09(b)
Original Securities   Preamble
Other Guarantor   11.02(b)(iv)
Paying Agent   2.04(a)
Permitted Debt   4.03(b)
primary obligations   1.01

 

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primary obligor   1.01
protected purchaser   2.08
Purchase Agreement   Appendix A
Purchase Date   3.09(b)
QIB   Appendix A
Ratio Debt   4.03(a)
Refinancing Indebtedness   4.03(b)(xiii)
Refunding Capital Stock   4.04(b)(ii)(A)
Registrar   2.04(a)
Regulation S   Appendix A
Regulation S Global Securities   Appendix A
Regulation S Securities   Appendix A
Related Judgment   12.09(b)
Related Proceedings   12.09(a)
Replacement Assets   4.06(b)(iv)
Reserved Indebtedness Amount   4.03(f)
Restricted Payments   4.04(a)
Restricted Securities Legend   Appendix A
Retained Declined Proceeds   4.06(b)
Retired Capital Stock   4.04(b)(ii)(A)
Reversion Date   4.13(b)
Rule 144A   Appendix A
Rule 144A Global Securities   Appendix A
Rule 144A Securities   Appendix A
Rule 501   Appendix A
Securities   Preamble
Securities Custodian   Appendix A
Specified Courts   12.09(a)
Specified Merger/Transfer Transaction   5.01(b)
Specified Parent Guarantor Merger/Transfer Transaction   5.01(a)
Successor Company   5.01(b)(i)
Successor Guarantor   5.01(c)
Successor Parent Guarantor   5.01(a)(i)
Suspended Covenants   4.13(a)
Suspension Period   4.13(c)
Tax Jurisdiction   2.15(b)
Tax Redemption Date   3.10(a)
Transaction Agreement Date   1.03(a)
Transfer Restricted Definitive Securities   Appendix A
Transfer Restricted Global Securities   Appendix A
Unrestricted Definitive Security   Appendix A
Unrestricted Global Security   Appendix A

 

SECTION 1.03.          Measuring Compliance .

 

(a)          With respect to any (x) Investment or acquisition, in each case, for which UK Holdco or any Subsidiary of UK Holdco may not terminate its obligations (or may not do so without incurring significant expense) due to a lack of financing for such Investment or acquisition (whether by merger, consolidation or other business combination or the acquisition of Capital Stock or otherwise) as applicable and (y) repayment, repurchase or refinancing of Indebtedness with respect to which an irrevocable notice of repayment (or similar irrevocable notice), which may be conditional, has been delivered, in each case, for purposes of determining:

 

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(i)          whether any Indebtedness (including Acquired Indebtedness) that is being Incurred in connection with such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness is permitted to be Incurred in compliance with Section 4.03;

 

(ii)         whether any Lien being Incurred in connection with such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness or to secure any such Indebtedness is permitted to be Incurred in accordance with Section 4.11 or the definition of “Permitted Liens”;

 

(iii)        whether any other transaction undertaken or proposed to be undertaken in connection with such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness complies with this Indenture or the Securities; and

 

(iv)        any calculation of the ratios, including Fixed Charge Coverage Ratio, Consolidated Total Debt Ratio, Consolidated Senior Secured Debt Ratio, Consolidated Net Income, EBITDA and/or Total Assets and, whether a Default or Event of Default exists in connection with the foregoing,

 

at the option of UK Holdco, using the date that the definitive agreement for such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness is entered into or irrevocable notice, which may be conditional, of such repayment, repurchase or refinancing of Indebtedness is given to the holders of such Indebtedness (the “ Transaction Agreement Date ”) may be used as the applicable date of determination, as the case may be, in each case with such pro forma adjustments as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.”

 

(b)          For the avoidance of doubt, if UK Holdco elects to use the Transaction Agreement Date as the applicable date of determination in accordance with the foregoing, (a) any fluctuation or change in the Fixed Charge Coverage Ratio, Consolidated Total Debt Ratio, Consolidated Senior Secured Debt Ratio, Consolidated Net Income, EBITDA and/or Total Assets of UK Holdco from the Transaction Agreement Date to the date of consummation of such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness, will not be taken into account for purposes of determining whether any Indebtedness or Lien that is being Incurred in connection with such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness, or in connection with compliance by UK Holdco or any of the Restricted Subsidiaries of UK Holdco with any other provision of this Indenture or Securities or any other transaction undertaken in connection with such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness, is permitted to be Incurred and (b) until such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness is consummated or such definitive agreements are terminated, such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness and all transactions proposed to be undertaken in connection therewith (including the Incurrence of Indebtedness and Liens) will be given pro forma effect when determining compliance of other transactions (including the Incurrence of Indebtedness and Liens unrelated to such Investment, acquisition or repayment, repurchase or refinancing of Indebtedness) that are consummated after the Transaction Agreement Date and on or prior to the date of such consummation or termination.

 

(c)          The compliance with any requirement relating to the absence of a Default or Event of Default may be determined as of the Transaction Agreement Date and not as of any later date as would otherwise be required under this Indenture.

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(d)          For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in cash by such Person with respect thereto.

 

(e)          For the avoidance of doubt, (x) no Day 2 Subsidiary shall be required to comply with the provisions described under Articles 4 and 5 until such Day 2 Subsidiary is acquired and (y) for the purposes of any calculation of any financial metric (including the Financial Definitions), (i) unless such Day 2 Subsidiary is designated as an Unrestricted Subsidiary pursuant to the terms of this Indenture, each Day 2 Subsidiary shall constitute a “Restricted Subsidiary” and (ii) the results of operations and obligations attributable to Day 2 Assets and Day 2 Liabilities shall be included in such calculation.

 

SECTION 1.04.          Rules of Construction . Unless the context otherwise requires, or except as otherwise provided herein:

 

(a)          a term has the meaning assigned to it;

 

(b)          an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)          “ or ” is not exclusive;

 

(d)          “ including ” means including without limitation;

 

(e)          “ herein ,” “ hereof ” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

 

(f)          words in the singular include the plural and words in the plural include the singular;

 

(g)          the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of UK Holdco dated such date prepared in accordance with GAAP;

 

(h)          (i) the principal amount of any Preferred Stock shall be (1) the maximum liquidation value of such Preferred Stock or (2) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater and (ii) the “ Maximum Fixed Repurchase Price ” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by UK Holdco;

 

(j)          all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;

 

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(k)          “ $ ” and “ U.S. Dollars ” each refer to United States Dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts;

 

(l)          for any periods or dates which the Issuer, UK Holdco or any direct or indirect parent thereof does not have historical financial statements available, such Person shall be entitled to use and rely on the financial statements of its predecessor or successor (as the case may be); and

 

(m)        the phrase “in writing” as used herein shall be deemed to include .pdfs, e-mails and other electronic means of transmission, unless otherwise indicated.

 

ARTICLE 2

 

THE SECURITIES

 

SECTION 2.01.          Amount of Securities; Issuable in Series . The aggregate principal amount of Original Securities which may be authenticated and delivered under this Indenture on the Closing Date is $500,000,000. The Securities may be issued in one or more series. All Securities of any one series shall be substantially identical except as to denomination.

 

The Issuer may from time to time after the Closing Date issue Additional Securities under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Securities is at such time permitted by Section 4.03 and (ii) such Additional Securities are issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Securities issued after the Closing Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Sections 2.07, 2.08, 2.09, 2.10, 3.08, 3.09(e), 4.08(c) or the Appendix ), there shall be (a) established in or pursuant to a resolution of the Board of Directors of the Issuer and (b)(i) set forth or determined in the manner provided in an Officer’s Certificate or (ii) established in one or more supplemental indentures hereto, prior to the issuance of such Additional Securities:

 

(1)         whether such Additional Securities shall be issued as part of a new or existing series of Securities and the title of such Additional Securities (which shall distinguish the Additional Securities of the series from Securities of any other series);

 

(2)         the aggregate principal amount of such Additional Securities which may be authenticated and delivered under this Indenture;

 

(3)         the issue price and issuance date of such Additional Securities, including the date from which interest on such Additional Securities shall accrue; and

 

(4)         if applicable, that such Additional Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective depositaries for such Global Securities, the form of any legend or legends which shall be borne by such Global Securities in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of the Appendix in which any such Global Security may be exchanged in whole or in part for Additional Securities registered, or any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Security or a nominee thereof.

 

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If any of the terms of any Additional Securities are established by action taken pursuant to a resolution of the Board of Directors of the Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate or the supplemental indenture hereto setting forth the terms of the Additional Securities.

 

Additionally, the Trustee shall receive an Officer’s Certificate in accordance with Section 12.04, and the Trustee shall receive an Opinion of Counsel which shall state:

 

(1)         that the form of such Additional Securities has been established by a supplemental indenture or by or pursuant to a resolution of the Board of Directors in conformity with the provisions of this Indenture;

 

(2)         that the terms of such Additional Securities have been established in conformity with the other provisions of this Indenture;

 

(3)         that such Additional Securities, when authenticated and delivered by the Trustee or its Authenticating Agent and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Issuer, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; and

 

(4)         that all covenants and conditions precedent under this Indenture with respect to the issuance, authentication and delivery of such Additional Securities have been complied with.

 

SECTION 2.02.          Form and Dating . Provisions relating to the Securities are set forth in the Appendix , which is hereby incorporated in and expressly made a part of this Indenture. The Original Securities and the Trustee’s certificate of authentication, and any Additional Securities (if issued as Transfer Restricted Definitive Securities) and the Trustee’s certificate of authentication, shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer or any Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Security shall be dated the date of its authentication. The Securities shall be issuable only in fully registered form without coupons and only in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof.

 

SECTION 2.03.          Execution and Authentication . The Trustee or its Authenticating Agent shall authenticate and make available for delivery upon a written order of the Issuer signed by one or more officers, directors or authorized signatories of the Issuer (an “ Authentication Order ”) (a) Original Securities for original issue on the date hereof of $500,000,000 in aggregate principal amount of 7.875% Senior Notes due 2024 and (b) subject to the terms of this Indenture, Additional Securities in an aggregate principal amount to be determined at the time of issuance and specified therein. Such Authentication Order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated. Notwithstanding anything to the contrary in this Indenture or the Appendix , any issuance of Additional Securities after the Closing Date shall be in a minimum principal amount of $2,000 and any integral multiples of $1,000 in excess thereof whether such Additional Securities are of the same or a different series than the Original Securities. Prior to the authentication of the Original Securities, the Trustee shall receive an Officer’s Certificate in accordance with Section 12.04.

 

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One or more officers, directors or authorized signatories of the Issuer shall sign the Securities for the Issuer by manual or facsimile signature.

 

If an officer, director or authorized signatory whose signature is on a Security no longer holds that office at the time the Trustee or its Authenticating Agent authenticates the Security, the Security shall be valid nevertheless.

 

A Security shall not be valid until an authorized signatory of the Trustee or its Authenticating Agent manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

 

The Trustee may appoint one or more authenticating agents (each an “ Authenticating Agent ”) reasonably acceptable to the Issuer to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

SECTION 2.04.          Registrar and Paying Agent .

 

(a)          The Issuer shall maintain (i) an office or agency where Securities may be presented for registration of transfer or for exchange (the “ Registrar ”) and (ii) an office or agency in the United States where Securities may be presented for payment (the “ Paying Agent ”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrars. The term “Paying Agent” includes the Paying Agent and any additional paying agents. The Issuer initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Securities and (ii) the Securities Custodian with respect to the Global Securities.

 

Upon written request from the Issuer or each time the register of Holders is amended, the Registrar shall provide the Issuer with a copy of the register of Holders to enable it to maintain a register of the Securities at its registered office in accordance with the Luxembourg law of August 10, 1915 on commercial companies, as amended. In the event of any discrepancies between the register of the Securities held by the registrar and the register of the Securities held by the Issuer at its registered office, the register of the Securities held by the registrar shall prevail, but solely for Luxembourg law purposes, the register held by the Issuer shall prevail.

 

(b)          The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee in writing of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.06. The Issuer or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

(c)          The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) written notification to the Trustee that the Trustee shall serve, to the extent it determines that it is able, as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.

 

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SECTION 2.05.          Paying Agent to Hold Money in Trust. On or prior to 10:00 a.m. (New York City time) on each due date of the principal of and interest on any Security, the Issuer shall deposit with the Paying Agent (or if the Issuer or a domestically organized Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders and the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Securities, and shall notify the Trustee in writing of any default by the Issuer in making any such payment. If the Issuer or a domestically organized Wholly Owned Subsidiary of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it for the benefit of the Persons entitled thereto. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. During the continuance of a Default under this Indenture, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee will serve as Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee. For the avoidance of doubt, a Paying Agent and the Trustee shall be held harmless and have no liability with respect to payments and disbursements to be made by a Paying Agent and the Trustee until they have confirmed receipt of funds sufficient to make the relevant payment. No money held by an Agent needs to be segregated except as is required by law.

 

SECTION 2.06.          Holder Lists . The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

 

SECTION 2.07.          Transfer and Exchange . The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer and in compliance with the Appendix . When a Security is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Securities are presented to the Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and upon receipt of an Authentication Order the Trustee or its Authenticating Agent shall authenticate Securities at the Registrar’s request. The Issuer may require a Holder to pay a sum sufficient to pay all Taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or of any Securities for a period of 15 days prior to the sending of a notice of redemption or of any Securities to be redeemed or tendered and not withdrawn in connection with a Change of Control Offer or an Asset Sale Offer.

 

Prior to the due presentation for registration of transfer of any Security, the Issuer, the Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Issuer, any Guarantor, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary.

 

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Any Holder of a beneficial interest in a Global Security shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry.

 

All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture, the Appendix or under applicable law with respect to any transfer of any interest in any Security other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture and the Appendix.

 

Neither the Trustee nor any of its agents shall have any responsibility or liability for any actions taken or not taken by the depositary with which the Global Security is registered.

 

SECTION 2.08.          Replacement Securities . If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate (upon receipt of an Authentication Order) a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “ protected purchaser ”) and (c) satisfies any other reasonable requirements of the Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment of (i) the Trustee to protect the Trustee or (ii) the Issuer, to protect the Issuer, the Trustee, a Paying Agent and the Registrar, from any loss that any of them may suffer if a Security is replaced. The Issuer and the Trustee may charge the Holder for the Issuer’s or Trustee’s expenses in replacing a Security (including, without limitation, attorneys’ fees and disbursements in replacing such Security). In the event any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Issuer in its discretion may pay such Security instead of issuing a new Security in replacement thereof.

 

Every replacement Security is an additional obligation of the Issuer.

 

The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities.

 

SECTION 2.09.          Outstanding Securities . Securities outstanding at any time are all Securities authenticated by the Trustee or its Authenticating Agent except for those canceled by it, those delivered to it for cancellation, those paid or replaced pursuant to Section 2.08 and those described in this Section 2.09 as not outstanding. Subject to Section 12.06, a Security does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Security.

 

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If a Security is replaced pursuant to Section 2.08 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Security is held by a protected purchaser. A mutilated Security ceases to be outstanding upon surrender of such Security and replacement thereof pursuant to Section 2.08.

 

If a Paying Agent holds, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

SECTION 2.10.          Temporary Securities . In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Issuer may prepare and the Trustee upon receipt of an Authentication Order shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Issuer considers appropriate for temporary Securities. Without unreasonable delay, the Issuer shall prepare and upon receipt of an Authentication Order the Trustee shall authenticate Definitive Securities and make them available for delivery in exchange for temporary Securities upon surrender of such temporary Securities at the office or agency of the Issuer, without charge to the Holder. Until such exchange, temporary Securities shall be entitled to the same rights, benefits and privileges as Definitive Securities.

 

SECTION 2.11.          Cancellation . The Issuer at any time may deliver Securities to the Registrar for cancellation. The Trustee and the Paying Agent shall forward to the Registrar any Securities surrendered to them for registration of transfer, exchange or payment. The Registrar and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Securities in accordance with its customary procedures. The Issuer may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Registrar for cancellation. The Trustee shall not authenticate Securities in place of canceled Securities other than pursuant to the terms of this Indenture.

 

SECTION 2.12.          Defaulted Interest . If the Issuer defaults in a payment of interest on the Securities, the Issuer shall pay the defaulted interest then borne by the Securities ( plus interest on such defaulted interest to the extent lawful), in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date and shall promptly mail or cause to be mailed to each affected Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

 

SECTION 2.13.          CUSIP Numbers and ISINs . The Issuer in issuing the Securities may use CUSIP numbers and ISINs (if then generally in use) and, if so, the Trustee shall use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Securities or as contained in any notice of a redemption, that reliance may be placed only on the other identification numbers printed on the Securities and that any such redemption shall not be affected by any defect in or omission of such numbers; provided , further , that if any Additional Securities are not fungible with the Original Securities for U.S. federal income tax purposes, such Additional Securities will have a separate CUSIP number and ISINs. The Issuer shall promptly advise the Trustee in writing of any change in the CUSIP numbers and ISINs.

 

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SECTION 2.14.          Calculation of Specified Percentage of Securities . With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Securities, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Securities, the Holders of which have so consented by (b) the aggregate principal amount, as of such date of determination, of the Securities then outstanding, in each case, as determined in accordance with Section 2.09 and Section 12.06 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

 

SECTION 2.15.          Deposit of Moneys . Subject to actual receipt of such funds as provided by Section 2.05 by the designated Paying Agent, such Paying Agent shall remit such payment in a timely manner to the Holders on such day or date, as the case may be, to the Persons and in the manner set forth in Paragraph 2 of the Securities; provided, however, that no Paying Agent shall be obliged to make a payment until it has received funds sufficient to make such payment. The Issuer shall promptly notify the Trustee and the respective Paying Agent of its failure to so act.

 

SECTION 2.16.          Additional Amounts .

 

(a)          All payments made under or with respect to the Securities or any Guarantee shall be made free and clear of and without withholding or deduction for, or on account of, any present or future Taxes unless the withholding or deduction of such Taxes is then required by law.

 

(b)          If any deduction or withholding for, or on account of, any Taxes imposed or levied by or on behalf of (1) any jurisdiction in which the Issuer or any Guarantor, is then incorporated, organized, engaged in business or resident for tax purposes, or any political subdivision or governmental authority thereof or therein having power to tax or (2) any jurisdiction from or through which payment is made by or on behalf of the Issuer or any Guarantor (including, without limitation, the jurisdiction of any Paying Agent for the Securities) or any political subdivision or governmental authority thereof or therein (each, a “ Tax Jurisdiction ”), shall at any time be required to be made from any payments made by or on behalf of the Issuer under or with respect to the Securities or by or on behalf of the Guarantors under or with respect to any Guarantee, including, without limitation, payments of principal, redemption price, purchase price, interest or premium, the Issuer or the relevant Guarantor, as applicable, shall pay such additional amounts (the “ Additional Amounts ”) as may be necessary in order that the net amounts received in respect of such payments by each Holder after such withholding or deduction (including any withholding or deduction from such Additional Amounts) shall equal the respective amounts that would have been received in respect of such payments in the absence of such withholding or deduction; provided, however, that no Additional Amounts shall be payable with respect to:

 

(i) any Taxes that would not have been imposed but for the existence of any present or former connection between the Holder of the relevant Securities (or between a fiduciary, settlor, beneficiary, partner, member or shareholder of, or possessor of power over, the relevant Holder, if the relevant Holder is an estate, trust, nominee, partnership, limited liability company or corporation) or the beneficial owner of the relevant Securities and the relevant Tax Jurisdiction (including, without limitation, being or having been a citizen, resident or national thereof or being or having been incorporated therein, present or engaged in a trade or business or maintaining a permanent establishment therein), other than any connection arising solely from the acquisition, ownership or holding of any Security or the enforcement or receipt of payment under or in respect of any Security or any Guarantee;

 

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(ii) any Taxes imposed or withheld as a result of the failure of a Holder or beneficial owner of the relevant Securities to comply with any written request, made to that Holder or beneficial owner in writing at least 15 days before any such withholding or deduction would be payable, by the Issuer or any of the Guarantors to provide timely or accurate information or evidence concerning the nationality, residence or identity of such Holder or beneficial owner or to make any valid or timely declaration or similar claim or satisfy any certification information or other reporting requirements, which is required or imposed by a statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to exemption from, or reduction in the rate of deduction or withholding of, such Taxes, but, in each case, only to the extent that the Holder or beneficial owner is legally eligible to provide such declaration, certification or other information;

 

(iii) any Taxes, to the extent such Taxes are imposed or withheld as a result of the presentation of any Security for payment (where presentation is required) more than 30 days after the relevant payment is first made available for payment to the Holder or beneficial owner (except to the extent that the Holder or beneficial owner would have been entitled to Additional Amounts on account of such Taxes had the Security been presented on the last day of such 30 day period);

 

(iv) any estate, inheritance, gift, sale, transfer, excise, personal property or similar Tax;

 

(v) any Tax which is payable otherwise than by deduction or withholding from a payment made under or with respect to the Securities or any Guarantee;

 

(vi) any Tax imposed on or with respect to any payment if such Holder is a fiduciary, partnership, limited liability company or other person other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership, limited liability company or the beneficial owner of the payment would not have been entitled to Additional Amounts with respect to such payment had the beneficiary, settlor, member or beneficial owner been the Holder of such Security;

 

(vii) any Taxes that are required to be withheld or deducted pursuant to the Luxembourg law of December 23, 2005;

 

(viii) any Taxes that are required to be withheld or deducted pursuant to the agreement between the European Community and the Swiss Confederation entered into force on July 1, 2005, as amended from time to time, or pursuant to the agreements on final withholding Taxes between Switzerland with the United Kingdom and Switzerland and Austria entered into force on January 1, 2013, as amended from time to time;

 

(ix) any Taxes that are imposed or withheld in connection with the presentation of any Security for payment by or on behalf of a Holder or beneficial owner of such Securities who would have been able to avoid such Taxes by presenting the relevant Security to, or accepting payment from, another paying agent in another member state of the European Union;

 

(x) any Taxes that are imposed or withheld pursuant to Sections 1471 through 1474 of the Code (as of the Closing Date, or any amended or successor versions of such sections), any regulations promulgated thereunder, any official interpretations thereof, any fiscal or regulatory legislation, rules or official practices adopted pursuant to an intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing sections of the Code or any agreements entered into pursuant to Section 1471(b)(1) of the Code; or

 

(xi) any combination of items (i) through (x) above.

 

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(c)          In addition to the foregoing, the Issuer and the Guarantors shall pay (and indemnify the Holder for) any present or future stamp, issue, registration, court or documentary Taxes, or any other excise or property Taxes, charges or similar levies imposed by a Tax Jurisdiction on the execution, issuance, delivery, registration or enforcement of any of the Securities, this Indenture or any Guarantee (other than on or in connection with a transfer of the Securities other than (i) a transfer of the Securities to the Issuer or the depositary or (ii) the initial sale by the Initial Purchasers) or any other document or instrument referred to therein or the receipt of any payment with respect thereto (limited, solely in the case of Taxes attributable to the receipt of any payment with respect thereto, to any such Taxes imposed in a relevant Tax Jurisdiction that are not excluded under clauses (i) through (iv) and (vi) through (x) or any combination thereof).

 

(d)          If the Issuer or any Guarantor, as the case may be, becomes aware that it will be obligated to pay Additional Amounts with respect to any payment under or with respect to the Securities or any Guarantee, the Issuer or the relevant Guarantor, as the case may be, shall deliver to the Trustee on a date at least 15 days prior to the date of payment (unless the obligation to pay Additional Amounts arises after the 45th day prior to that payment date, in which case the Issuer or the relevant Guarantor shall notify the Trustee promptly thereafter) an Officer’s Certificate stating the fact that Additional Amounts will be payable and the amount estimated to be so payable. The Officer’s Certificate must also set forth any other information reasonably necessary to enable the Paying Agent to pay Additional Amounts on the relevant payment date. The Trustee shall be entitled to rely solely on such Officer’s Certificate as conclusive proof that such payments are necessary.

 

(e)          The Issuer or the relevant Guarantor shall make all withholdings and deductions required by law to be made by them and shall remit the full amount deducted or withheld to the relevant Tax authority in accordance with applicable law. The Issuer or the relevant Guarantor shall furnish to the Trustee, within a reasonable time after the date that the payment of any Taxes so deducted or withheld is made, certified copies of Tax receipts evidencing payment by the Issuer or a Guarantor, as the case may be, or if, notwithstanding such entity’s efforts to obtain receipts, receipts are not obtained, other evidence of payments by such entity reasonably satisfactory to the Trustee. Such copies or such other evidence of payment shall be made available to the Holders upon reasonable written request.

 

(f)          Whenever in this Indenture there is mentioned the payment of amounts based on the principal amount, interest of any other amount payable under, or with respect to, any of the Securities or any Guarantee, such mention shall be deemed to include, without duplication, the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

 

(g)          The preceding provisions of this Section 2.16 shall survive any termination, defeasance or discharge of this Indenture, any transfer by a Holder or beneficial owner of its Securities, and shall apply, mutatis mutandis , to any jurisdiction in which any successor Person to the Issuer or any Guarantor is then incorporated, organized, engaged in business or resident for tax purposes or any jurisdiction from or through which payment is made by or on behalf of such person on the Securities (or any Guarantee) and any political subdivision or governmental authority thereof or therein.

 

ARTICLE 3

 

REDEMPTION

 

SECTION 3.01.          Optional Redemption . The Securities may be redeemed, in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the Form of Security set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest to, but not including, the redemption date.

 

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SECTION 3.02.          Applicability of Article . Redemption of Securities at the election of the Issuer or otherwise, as permitted or required by any provision of this Indenture (including the optional redemption provisions of Paragraph 5 of the Securities), shall be made in accordance with such provision and this Article 3.

 

SECTION 3.03.          Notices to Trustee . If the Issuer elects to redeem Securities pursuant to the optional redemption provisions of Paragraph 5 of the Securities, it shall notify the Trustee and the Paying Agent in writing of (i) the particular part of Paragraph 5 of the Securities pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Securities to be redeemed and (iv) the redemption price. The Issuer shall give notice to the Trustee and the Paying Agent provided for in this Section 3.03 at least 10 days but not more than 60 days before a redemption date if the redemption is pursuant to Paragraph 5 of the Securities. Any such notice may be canceled at any time prior to notice of such redemption being sent to any Holder and shall thereby be void and of no effect.

 

SECTION 3.04.          Selection of Securities to Be Redeemed . In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in accordance with the procedures of the Depository; provided , that no such selection shall result in a Holder of Securities with a principal amount of Securities less than the minimum denomination for the Securities. The Securities to be redeemed shall be selected from outstanding Securities not previously called for redemption. Securities and portions of them selected shall be in minimum amounts of $2,000 or a whole multiple of $1,000 in excess thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption.

 

SECTION 3.05.          Notice of Optional Redemption .

 

(a)          At least 10 days but not more than 60 days before a redemption date pursuant to Paragraph 5 of the Securities, the Issuer shall send or cause to be sent, electronically or by first-class mail, a notice of redemption to each Holder (with a copy to the Trustee and Paying Agent) whose Securities are to be redeemed to such Holder’s registered address or otherwise in accordance with the procedures of the Depository; provided that redemption notices may be provided more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction or discharge of this Indenture or defeasance of the Securities pursuant to this Indenture.

 

Any such notice shall identify the Securities to be redeemed and shall state:

 

(i)          the redemption date;

 

(ii)         the redemption price and the amount of accrued interest to the redemption date;

 

(iii)        the name and address of a Paying Agent;

 

(iv)        that Securities called for redemption must be surrendered to a Paying Agent to collect the redemption price, plus accrued interest;

 

(v)         if fewer than all the outstanding Securities are to be redeemed, the certificate numbers (if applicable) and principal amounts of the particular Securities to be redeemed, the aggregate principal amount of the Securities to be redeemed and the aggregate principal amount of the Securities to be outstanding after such partial redemption;

 

(vi)        that, unless the Issuer defaults in making such redemption payment or any Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

 

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(vii)       the CUSIP number and ISIN, if any, printed on the Securities being redeemed; and

 

(viii)      that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN if any, listed in such notice or printed on the Securities.

 

In connection with any such redemption of Securities (including with funds in an aggregate amount not exceeding the net cash proceeds of an Equity Offering), any such redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent, including the completion of any related Equity Offering. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, the redemption date may be delayed until such time (including more than 60 days after the date the notice of redemption was sent) as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed. In addition, the Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.

 

(b)          At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided , however , that the Issuer has delivered to the Trustee, at least 5 Business Days (unless a shorter period is acceptable to the Trustee) prior to the date the redemption notice is sent to Holders, an Officer’s Certificate requesting that the Trustee give such notice. In such event, the Issuer shall provide the Trustee in writing with the information required by this Section 3.05.

 

SECTION 3.06.          Effect of Notice of Redemption . Once notice of redemption is provided in accordance with Section 3.05, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice (except to the extent such redemption is conditional as set forth in Section 3.05). Upon surrender to any Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided , however , that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Securities registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

 

SECTION 3.07.          Deposit of Redemption Price . Prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if UK Holdco or a Wholly Owned Subsidiary of UK Holdco is a Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities or portions thereof to be redeemed on that date other than Securities or portions of Securities called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Securities or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Securities to be redeemed, unless a Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture. For the avoidance of doubt, a Paying Agent and the Trustee shall be held harmless and have no liability with respect to payments and disbursements to be made by a Paying Agent and the Trustee until they have confirmed receipt of funds sufficient to make the relevant payment.

 

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SECTION 3.08.          Securities Redeemed in Part . In the case of Definitive Securities, upon surrender of a Security that is redeemed in part, the Issuer shall execute and upon receipt of an Authentication Order the Trustee or the Authenticating Agent shall authenticate for the Holder (at the Issuer’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.

 

SECTION 3.09.          Offer to Purchase by Application of Excess Proceeds .

 

(a)          In the event that, pursuant to Section 4.06 hereof, UK Holdco is required to commence an Asset Sale Offer, it will follow the procedures specified below.

 

(b)          The Asset Sale Offer shall be made to all Holders with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), UK Holdco will apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Securities and, if applicable, other tendered Senior Indebtedness as provided in Section 4.06 or, if less than the Offer Amount has been tendered, all Securities and, if applicable, other Senior Indebtedness tendered in response to the Asset Sale Offer. Payment for any Securities so purchased will be made in the same manner as interest payments are made.

 

(c)          If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Asset Sale Offer.

 

(d)          Upon the commencement of an Asset Sale Offer, UK Holdco shall send, or cause to be sent, electronically or by first-class mail, or as otherwise provided in accordance with the procedures of the Depository, a written notice to the Trustee, the Paying Agent and each of the Holders. The notice will contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:

 

(i)          that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.06 hereof and the length of time the Asset Sale Offer will remain open;

 

(ii)         the Offer Amount, the purchase price and the Purchase Date;

 

(iii)        that Securities not tendered or accepted for payment will continue to accrue interest;

 

(iv)        that, unless UK Holdco defaults in making such payment, Securities accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;

 

(v)         that Holders electing to have Securities purchased pursuant to an Asset Sale Offer may elect to have Securities purchased in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof;

 

(vi)        that Holders electing to have Securities purchased pursuant to any Asset Sale Offer will be required to surrender the Securities, with the form entitled “Option of Holder to Elect Purchase” attached to the Securities completed, or transfer by book-entry transfer, to UK Holdco, a depository, if appointed by UK Holdco, or a paying agent at the address specified in the notice at least three days before the Purchase Date;

 

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(vii)       that Holders will be entitled to withdraw their election if UK Holdco, the Depository or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Securities the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Securities purchased;

 

(viii)      that, if the aggregate principal amount of Securities and, if applicable, other tendered Senior Indebtedness surrendered by Holders thereof exceeds the Offer Amount, UK Holdco will select the Securities and, if applicable, other tendered Senior Indebtedness as provided in Section 4.06; and

 

(ix)         that Holders whose Securities were purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered (or transferred by book-entry transfer).

 

(e)          On or before the Purchase Date, UK Holdco, to the extent lawful, will accept for payment, on a pro rata basis to the extent necessary (subject to maintenance of authorized denominations), the Offer Amount of Securities or portions thereof and, if applicable, other Senior Indebtedness tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Securities and, if applicable, other Senior Indebtedness tendered, and will deliver or cause to be delivered to the Trustee the Securities properly accepted together with an Officer’s Certificate stating that such Securities or portions thereof were accepted for payment by UK Holdco in accordance with the terms of this Section 3.09. UK Holdco, the Depository or the Paying Agent, as the case may be, will, not later than three Business Days after UK Holdco accepts the Offer Amount, mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by UK Holdco for purchase, and UK Holdco will promptly issue a new Security, and the Trustee or Authenticating Agent, upon receipt of an Authentication Order, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered; provided that such Security shall be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Securities not so accepted shall be promptly mailed or delivered by UK Holdco to the Holder thereof. UK Holdco will publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

 

(f)          Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made in accordance with the provisions of Sections 3.03 through 3.08 hereof and references therein to “redeem,” “redemption” and similar words shall be deemed to refer to “purchase,” “repurchase” and similar words, as applicable.

 

SECTION 3.10.         Optional Redemption for Tax Reasons.

 

(a)          The Issuer may redeem the Securities, in whole but not in part, at its discretion at any time upon giving not less than 10 nor more than 60 days’ prior notice to the Holders (with a copy to the Trustee and the Paying Agent) (which notice shall be irrevocable and given in accordance with the procedures described in Section 3.05), at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to, but not including, the date fixed by the Issuer for redemption (a “ Tax Redemption Date ”) and all Additional Amounts (if any) then due and that will become due on the Tax Redemption Date as a result of the redemption or otherwise (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date that is prior to the Tax Redemption Date and Additional Amounts (if any) in respect thereof), if on the next date on which any amount would be payable in respect of the Securities or any Guarantee, the Issuer or any Guarantor is or would be required to pay Additional Amounts (but, in the case of the relevant Guarantor, only if such amount payable cannot be paid by the Issuer or another Guarantor who can pay such amount without the obligation to pay Additional Amounts), and the Issuer or the relevant Guarantor cannot avoid any such payment obligation by taking reasonable measures available to it, including the appointment of a different Paying Agent (provided that changing the jurisdiction of the Issuer or Guarantor is not a reasonable measure for purposes of this section), as a result of:

 

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(i)          any change in, or amendment to, the laws or treaties (or any regulations, protocols or rulings promulgated thereunder) of a Tax Jurisdiction affecting Taxation which change or amendment is announced and becomes effective on or after the date of the Offering Memorandum (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the date of the Offering Memorandum, the date on which such Tax Jurisdiction became a Tax Jurisdiction under this Indenture); or

 

(ii)         any change in, or amendment to, the existing official position or the introduction of an official position regarding the application, administration or interpretation of such laws, treaties, regulations, protocols or rulings (including a holding, judgment or order by a court of competent jurisdiction or a change in published practice), which change, amendment, application or interpretation is announced and becomes effective on or after the date of the Offering Memorandum (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the date of the Offering Memorandum, the date on which such Tax Jurisdiction became a Tax Jurisdiction under this Indenture) (each of the foregoing clauses (i) and (ii), a “ Change in Tax Law ”).

 

(b)          The Issuer will not give any such notice of redemption earlier than 60 days prior to the earliest date on which the Issuer or the relevant Guarantor would be obligated to make such payment or withholding if a payment in respect of the Securities or Guarantees were then due, and unless at the time such notice is given, the obligation to pay Additional Amounts remains in effect.

 

(c)          Prior to the publication or, where relevant, sending of any notice of redemption of the Securities pursuant to the foregoing, the Issuer will deliver to the Trustee an Opinion of Counsel to the effect that there has been such a Change in Tax Law which would entitle the Issuer to redeem the Securities hereunder. In addition, before the Issuer publishes or sends notice of redemption of the Securities as described above, it will deliver to the Trustee an Officer’s Certificate to the effect that the obligation to pay Additional Amounts cannot be avoided by the Issuer or the relevant Guarantor taking reasonable measures available to it.

 

(d)          The Trustee will accept such Officer’s Certificate and Opinion of Counsel as conclusive evidence of the existence and satisfaction of the conditions precedent as described above, in which event it will be conclusive and binding on the Holders.

 

ARTICLE 4

 

COVENANTS

 

SECTION 4.01.          Payment of Securities . The Issuer shall promptly pay the principal of and interest, on the Securities on the dates and in the manner provided in the Securities and in this Indenture. An installment of principal or interest shall be considered paid on the date due if by 10:00 a.m., New York City time on such date the Trustee or any Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or any Paying Agent, as the case may be, are not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

 

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The Issuer shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate borne by the Securities to the extent lawful.

 

SECTION 4.02.          Reports and Other Information .

 

(a)          The Issuer shall have UK Holdco’s annual consolidated financial statements audited by UK Holdco’s independent registered public accountants and its interim consolidated financial statements reviewed in accordance with Statement on Auditing Standards No. 100 issued by the American Institute of Certified Public Accountants (or any similar replacement standard). In addition, so long as any Securities are outstanding, the Issuer shall furnish to the Trustee and may (i) furnish to the Holders, (ii) post on its confidential password-protected website or (iii) post on Intralinks or any comparable confidential password-protected online data system:

 

(1)         an annual report and quarterly report including solely the following information: (a) annual financial statements with respect to an annual report and quarterly financial statements with respect to a quarterly report (including a balance sheet, statement of operations and statement of cash flows) prepared in accordance with GAAP, (b) a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” containing information customarily included in such section when included in a Form 10-K or Form 10-Q, as applicable, filed with the SEC (but only to the extent similar information is included in the Offering Memorandum), (c) disclosure relating to the percentage of consolidated assets, revenues and EBITDA that UK Holdco’s Subsidiaries that do not provide Guarantees accounted for as of and for the period then ended (but only to the extent the EBITDA of such non-Guarantor Subsidiaries exceeds 5% of the EBITDA of UK Holdco and its Restricted Subsidiaries on a consolidated basis), (d) a presentation of EBITDA of UK Holdco and its Restricted Subsidiaries for the trailing twelve month period substantially consistent with the presentation of “pro forma Adjusted EBITDA” in the Offering Memorandum and derived from such financial statements, and (e) with respect to the annual report only, a report on the annual financial statements by UK Holdco’s independent registered public accounting firm; and

 

(2)         the information that would be required to be contained in filings with the SEC on Form 8-K by the Issuer or UK Holdco if the Issuer or UK Holdco were required to file such reports for any of the following events: (a) significant acquisitions or dispositions, (b) the bankruptcy of UK Holdco, the Issuer or a Significant Subsidiary, (c) the acceleration of any Indebtedness of UK Holdco or any Restricted Subsidiary having a principal amount in excess of $75.0 million, (d) a change in certifying independent auditor with respect to UK Holdco or any indirect parent whose financial statements are provided as permitted by this Indenture, (e) the appointment or departure of the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Chief Operating Officer or President (or persons fulfilling similar duties) of UK Holdco or the Issuer, (f) resignation of a director of UK Holdco or the Issuer on disagreeable terms, (g) change in fiscal year, (h) non-reliance on previously issued financial statements, (i) change of control transactions, (j) entry into material agreements, (k) entry into material financial obligations and (l) historical financial statements of an acquired business (relating to transactions required to be reported pursuant to Item 2.01 of Form 8-K to the extent and in the form available to the Issuer (as determined by the Issuer in good faith) if the Issuer or UK Holdco were a domestic reporting company under the Exchange Act); provided , however , that no such current report will be required to be furnished (i) with respect to any significant acquisition or change of control transactions, in each case, related to or in connection with the Transactions (including acquisitions of the Day 2 Assets, Day 2 Liabilities and Day 2 Subsidiaries) or (ii) if UK Holdco determines in its good faith judgment that such event is not material to Holders or the business, assets, operations, financial positions or prospects of UK Holdco and its Restricted Subsidiaries, taken as a whole; provided , further , however , that no such current report will be required to include a summary of the terms of any employment or compensatory arrangement, agreement, plan or understanding between UK Holdco (or any of its Subsidiaries) and any director or officer;

 

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In connection therewith and for the avoidance of doubt, all such reports (A) shall not be required to comply with Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K promulgated by the SEC, or Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein), (B) shall not be required to contain the separate financial information for Guarantors contemplated by Rule 3-05, Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X promulgated by the SEC (other than information with respect to Guarantors to be provided under Section 4.02(a)(1)), (C) shall not be required to comply with Items 402, 405, 406, 407 and 601 of Regulation S-K promulgated by the SEC, (D) shall not be required to contain any exhibit (including any financial statements that would be required to be filed as an exhibit), (E) shall not be required to comply with rules or regulations promulgated by the SEC concerning Extensible Business Reporting Language (XBRL) and (F) shall not be required to comply with the requirements of Regulation S-X to the extent such requirements were not complied with in the Offering Memorandum.

 

(b)          All such annual reports shall be furnished within 90 days after the end of the fiscal year (or such longer period as may be permitted by the SEC if the Issuer or UK Holdco were then subject to SEC reporting requirements as a non-accelerated domestic filer) to which they relate ( provided that the annual report for the year ended December 31, 2016 shall be furnished within 120 days of the end of such fiscal year), and all such quarterly reports shall be furnished within 45 days after the end of the fiscal quarter (or such longer period as may be permitted by the SEC if the Issuer were then subject to SEC reporting requirements as a non-accelerated domestic filer) to which they relate ( provided that the quarterly report for the quarters ended September 30, 2016, March 31, 2017 and June 30, 2017 shall be furnished within 75 days of the end of such fiscal quarters). All such current reports shall be furnished within 10 Business Days after the occurrence of each event that would be required to be reported in such current report.

 

(c)          The Issuer shall furnish to the Trustee and make available such information and such reports (as well as the details regarding the conference call described below) to any (i) Holder, (ii) beneficial owner of the Securities, (iii) bona fide prospective investor in the Securities, (iv) bona fide securities analyst or (v) bona fide market maker in the Securities, in each case, by confidentially posting such information on its website or on Intralinks or any comparable password-protected online data system and making readily available any password or other login information to any such recipient. The Trustee shall have no responsibility whatsoever to determine if such posting has occurred. The Issuer shall hold a quarterly conference call for the Holders and securities analysts to discuss such financial information for the previous quarter no later than ten Business Days after distribution of such financial information. The Issuer may require an acknowledgement from any such recipient that (i) it will keep all information confidential, (ii) it will not use such information in violation of applicable securities laws and (iii) it will not use the information to compete with the Issuer and is not a person principally engaged in a Similar Business or that derives a significant portion of its revenues from a Similar Business in connection with access to its financial information or conference calls and may withhold access from any person who does not satisfy such conditions in its good faith judgment. While the Issuer or any direct or indirect parent of the Issuer is in registration with respect to an initial public offering, the Issuer or any direct or indirect parent of the Issuer shall not be required to disclose any information or take any actions which, in the view of the Issuer, would violate the securities laws or the SEC’s gun jumping rules.

 

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(d)          Notwithstanding the foregoing, in the event that the Issuer or any direct or indirect parent of the Issuer becomes a public reporting company and files the forms of reports required pursuant to Section 4.02(a), then the Issuer shall satisfy the delivery requirements under this Section 4.02 upon the filing of such reports with the SEC or other securities commission or stock exchange. The Trustee shall have no responsibility to determine whether such filing has occurred; provided that if a direct or indirect parent of the Issuer files such reports with the SEC, such direct or indirect parent of the Issuer provides the consolidating information set forth in the second sentence of Section 4.02(g).

 

(e)          The Issuer shall also furnish to Holders, securities analysts and prospective investors upon request the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act, so long as the Securities are not freely transferable under the Securities Act.

 

(f)          If UK Holdco has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of UK Holdco, then the annual and quarterly information required by Section 4.02(a)(1) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operation of UK Holdco and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries of UK Holdco.

 

(g)          This Indenture shall permit the Issuer to satisfy its obligations in this Section 4.02 with respect to financial information relating to UK Holdco by furnishing financial information relating to a direct or indirect parent of UK Holdco consistent with this Section 4.02. Such reports need not include financial statements required by Rules 3-10 or 3-16 of Regulation S-X; provided that if the direct or indirect parent has more than de minimis operations separate and apart from its ownership in UK Holdco, then the financial statements of the direct or indirect parent will be required to provide consolidating information, which need not be audited, that explains in reasonable detail the differences between the information relating to such parent and its subsidiaries, on the one hand, and the information relating to UK Holdco and its Restricted Subsidiaries on a standalone basis, on the other hand.

 

(h)          Notwithstanding anything herein to the contrary, the Issuer shall not be deemed to have failed to comply with any of its obligations hereunder for purposes of Section 6.01(c) until 120 days after the date any report hereunder is due (without giving effect, however, to the extensions with respect to annual and quarterly reports for periods in 2016 and 2017 addressed in the first sentence of Section 4.02(b)). Notwithstanding anything herein to the contrary, any failure to comply with this Section 4.02 shall be automatically cured when the Issuer or any direct or indirect parent of the Issuer, as the case may be, makes available all required reports to the Holders.

 

(i)          Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

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SECTION 4.03.          Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

 

(a)          (i) UK Holdco shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) UK Holdco shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided , however , that UK Holdco and any of its Restricted Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of UK Holdco’s Restricted Subsidiaries may issue shares of Preferred Stock, in each case, if the Fixed Charge Coverage Ratio of UK Holdco and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (“ Ratio Debt ”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred, at the beginning of such four-quarter period; provided , further , however , that the amount of Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors of the Securities shall not exceed the greater of (x) 2.0% of Total Assets of UK Holdco and its Restricted Subsidiaries and (y) $75.0 million at any one time outstanding pursuant to this Section 4.03(a).

 

(b)          The limitations set forth in Section 4.03(a) shall not apply to (collectively, “ Permitted Debt ”):

 

(i)          the Incurrence by UK Holdco or its Restricted Subsidiaries of Indebtedness under any Credit Agreement (and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof)) in an aggregate principal amount not to exceed the sum of:

 

(1) (A) $1,550.0 million, plus (B) $175.0 million plus (C) an amount equal to the greater of (x) $300.0 million and (y) 100.0% of EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, calculated on a pro forma basis (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio), in each case, at any one time outstanding, plus either

 

(2) the maximum amount of secured Indebtedness such that after giving pro forma effect to such Incurrence (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio) the Consolidated Senior Secured Debt Ratio of UK Holdco does not exceed 4.90 to 1.00 (with any Indebtedness Incurred under Section 4.03(b)(i)(1)(C) hereof on the date of determination of the Consolidated Senior Secured Debt Ratio not being included in the calculation of Consolidated Senior Secured Debt Ratio under this Section 4.03(b)(i)(2) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date), or

 

(3) the maximum amount of unsecured Indebtedness such that after giving pro forma effect to such Incurrence (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio) the Consolidated Total Debt Ratio of UK Holdco does not exceed 6.75 to 1.00 (with any Indebtedness Incurred under Section 4.03(b)(i)(1)(C) hereof on the date of determination of the Consolidated Total Debt Ratio not being included in the calculation of Consolidated Total Debt Ratio under this Section 4.03(b)(i)(3) hereof on such date but not, for the avoidance of doubt excluded from any such calculation made on any such subsequent date);

 

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provided, further , that (A) any Indebtedness Incurred and outstanding pursuant to Sections 4.03(b)(i)(1) and (2) shall be deemed to be Secured Indebtedness, whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio for this Section 4.03(b)(i)(2) and (B) any Indebtedness Incurred pursuant to this Section 4.03(b)(i) may be refinanced at any time if such refinancing does not exceed the greater of (I) the aggregate principal amount of Indebtedness permitted to be Incurred pursuant to this Section 4.03(b)(i) on the date of such refinancing and (II) the aggregate principal amount of the Indebtedness being refinanced at such time (together with an amount necessary to pay accrued and unpaid interest and any fees and expenses, including any premium and defeasance costs, associated with such refinancing) and, in the case of a refinancing of Indebtedness under the Credit Agreement outstanding on the Closing Date, such Indebtedness shall be treated for all purposes as Incurred pursuant to this Section 4.03(b)(i);

 

(ii)         the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Original Securities and the Guarantees thereof (and any exchange notes and Guarantees thereof);

 

(iii)        Indebtedness existing on the Closing Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));

 

(iv)        Indebtedness (including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by UK Holdco or any of its Restricted Subsidiaries, Disqualified Stock issued by UK Holdco or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of UK Holdco to finance all or any part of the acquisition, purchase, lease, construction, design, installation, repair, replacement or improvement of property (real or personal), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or its Restricted Subsidiaries or in a Similar Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this Section 4.03(b)(iv), not to exceed the greater of (x) 2.0% of Total Assets of UK Holdco and its Restricted Subsidiaries at the time of Incurrence and (y) $75.0 million, at any one time outstanding minus amounts Incurred and outstanding under Section 4.03(b)(xiii) in respect of Indebtedness originally Incurred under this Section 4.03(b)(iv);

 

(v)         Indebtedness (x) in respect of any bankers’ acceptance, bank guarantees, discounted bill of exchange or the discounting or factoring of receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however , that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing;

 

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(vi)        Indebtedness arising from agreements of UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets or a Subsidiary of UK Holdco in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

 

(vii)       shares of Preferred Stock of a Restricted Subsidiary issued to UK Holdco or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;

 

(viii)      Indebtedness or Disqualified Stock of (a) a Restricted Subsidiary to UK Holdco or (b) UK Holdco or any Restricted Subsidiary to any Restricted Subsidiary; provided that if the Issuer or a Guarantor Incurs such Indebtedness or issues such Disqualified Stock to a Restricted Subsidiary that is not the Issuer or a Guarantor such Indebtedness or Disqualified Stock, as applicable, is subordinated in right of payment to the Securities or the Guarantee of such Guarantor, as the case may be; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness or Disqualified Stock, as applicable, ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock, as applicable, (except to UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock, as applicable;

 

(ix)         Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes) or in connection with the Transactions: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;

 

(x)          obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by UK Holdco or any of its Restricted Subsidiaries;

 

(xi)         Indebtedness, Disqualified Stock or Preferred Stock in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this Section 4.03(b)(xi), does not exceed the greater of (x) 3.25% of Total Assets of UK Holdco and its Restricted Subsidiaries and (y) $125.0 million at any one time outstanding (minus amounts Incurred and outstanding under Section 4.03(b)(xiii) in respect of Indebtedness originally Incurred under this Section 4.03(b)(xi));

 

(xii)        any guarantee by UK Holdco or any of its Restricted Subsidiaries of Indebtedness or other obligations of UK Holdco or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by UK Holdco or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;

 

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(xiii)       the Incurrence by UK Holdco or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance, replace or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under Section 4.03(a) and Sections 4.03(b)(ii), (iii), (iv), (xi), (xiii), (xvi), (xix), (xxiv) and (xxvii) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest and fees and expenses, including any premium and defeasance costs, in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

 

(1)         has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the shorter of (i) the Indebtedness being refunded, refinanced, replaced or defeased or (ii) the Securities;

 

(2)         has a Stated Maturity which is no earlier than the earlier of the Stated Maturity of (i) the Indebtedness being refunded, refinanced, replaced or defeased or (ii) the Securities;

 

(3)         to the extent such Refinancing Indebtedness refinances (x) Subordinated Indebtedness, such Refinancing Indebtedness is Subordinated Indebtedness or (y) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;

 

(4)         is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus (y) the amount necessary to pay accrued and unpaid interest and fees, underwriting discounts and expenses, including any premium and defeasance costs Incurred in connection with such refinancing; and

 

(5)         shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco; (y) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or (z) Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

 

(xiv)      Indebtedness arising from (i) Bank Products and (ii) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that in the case of subclause (ii) of this Section 4.03(b)(xiv) such Indebtedness is extinguished within ten Business Days of its Incurrence;

 

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(xv)       Indebtedness of UK Holdco or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

 

(xvi)      Contribution Indebtedness;

 

(xvii)     Indebtedness of UK Holdco or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements;

 

(xviii)    Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to UK Holdco or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

 

(xix)       (1) Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or any of its Restricted Subsidiaries Incurred to finance an acquisition or (2) Acquired Indebtedness of UK Holdco or any of its Restricted Subsidiaries; provided that, in either case, after giving effect to the transactions that result in the Incurrence or issuance thereof, on a pro forma basis, either (a) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (b) the Fixed Charge Coverage Ratio of UK Holdco and its Restricted Subsidiaries would not be less than immediately prior to such transactions;

 

(xx)        Indebtedness Incurred by UK Holdco or any Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities;

 

(xxi)       guarantees (a) Incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under this Indenture;

 

(xxii)      Indebtedness issued by UK Holdco or any of its Restricted Subsidiaries to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent permitted by Section 4.04(b)(iv);

 

(xxiii)     Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions Incurred in the ordinary course of business of UK Holdco and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of UK Holdco and its Restricted Subsidiaries;

 

(xxiv)    Indebtedness Incurred by non-Guarantor Restricted Subsidiaries and joint ventures in an amount not to exceed the greater of (x) $125.0 million and (y) 3.25% of Total Assets at any one time outstanding, minus amounts Incurred and outstanding under Section 4.03(b)(xiii) in respect of Indebtedness originally Incurred under this Section 4.03(b)(xxiv);

 

(xxv)     customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;

 

(xxvi)    Indebtedness Incurred pursuant to sale leaseback transactions;

 

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(xxvii)   Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or a Restricted Subsidiary Incurred to finance or assumed in connection with an acquisition of any assets (including Capital Stock), business or Person in an aggregate principal amount or liquidation preference that does not exceed $30.0 million, at any one time outstanding (minus amounts Incurred and outstanding under Section 4.03(b)(xiii) in respect of Indebtedness originally Incurred under this Section 4.03(b)(xxvii));

 

(xxviii)   Indebtedness Incurred pursuant to any Tower Structure Transactions and any other transactions relating to the implementation of such structure; and

 

(xxix)     Cash Management Services Incurred not for speculative purposes.

 

(c)          For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt or is entitled to be Incurred as Ratio Debt, the Issuer shall, in its sole discretion, at the time of Incurrence, divide and/or classify, or at any later time re-divide and/or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03. With respect to Sections 4.03(b)(iv), (xi), (xxiv) and (xxvii), if at any time that the Issuer would be entitled to have Incurred any then outstanding item of Indebtedness as Ratio Debt, such item of Indebtedness shall be automatically reclassified into an item of Indebtedness Incurred as Ratio Debt. Notwithstanding the foregoing, (x) all term loan Indebtedness under the Credit Agreement outstanding on the Closing Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i)(1)(A) and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness and (y) all Indebtedness under the Credit Agreement in respect of revolving commitments available on the Closing Date shall be deemed to be Incurred pursuant to Section 4.03(b)(i)(1)(B) and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness. The Issuer will also be entitled to divide, classify or reclassify an item of Indebtedness in more than one of the types of permitted Indebtedness described in Sections 4.03(a) and (b) without giving pro forma effect to the Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) Incurred pursuant to Section 4.03(b) when calculating the amount of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) that may be Incurred pursuant to Section 4.03(a).

 

(d)          For purposes of determining compliance with this Section 4.03, with respect to Indebtedness Incurred under a Debt Facility, reborrowings of amounts previously repaid pursuant to “cash sweep” provisions or any similar provisions under a Debt Facility that provide that Indebtedness is deemed to be repaid daily (or otherwise periodically) shall only be deemed for purposes of this Section 4.03 to have been Incurred on the date such Indebtedness was first Incurred and not on the date of any subsequent reborrowing thereof. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. For the avoidance of doubt, the outstanding principal amount of any particular Indebtedness shall be counted only once, Indebtedness incurred pursuant to Section 4.03(b)(xxviii) shall not be included in calculating the amount of Indebtedness of the Issuer and its Restricted Subsidiaries outstanding at any time, and guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.

 

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(e)          For purposes of determining compliance with any U.S. Dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. Dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a currency other than U.S. Dollars, and such refinancing would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

 

(f)          In the event that, pursuant to Sections 4.03(b)(i)(2) and 4.03(b)(i)(3), UK Holdco or its Restricted Subsidiaries enters into or increases commitments under a revolving credit facility, the Consolidated Senior Secured Debt Ratio and the Consolidated Total Debt Ratio, as applicable, of UK Holdco, will, at UK Holdco’s option, as elected on the date such revolving credit commitments are entered into or increased, either (a) be determined on the date such revolving credit commitments are entered into or increased, in which case the Consolidated Senior Secured Debt Ratio and Consolidated Total Debt Ratio, as applicable, for purposes of such Sections 4.03(b)(i)(2) and 4.03(b)(i)(3) and clause (26)(y) of the definition of “Permitted Liens”, as applicable, shall be calculated (whether on such date or thereafter (but only with respect to such portion of commitments that have not been permanently reduced)) assuming that the full amount thereof has been borrowed as of such date, and, if the Consolidated Senior Secured Debt Ratio test or Consolidated Total Debt Ratio test, as applicable, is satisfied with respect thereto on such date, any future borrowing or reborrowing thereunder (and the issuance and creation of letters of credit and bankers’ acceptances thereunder) will be permitted under such Sections 4.03(b)(i)(2) and 4.03(b)(i)(3) and such clause (26)(y) irrespective of the Consolidated Senior Secured Debt Ratio or Consolidated Total Debt Ratio, as applicable, at the time of any borrowing or reborrowing (or issuance or creation of letters of credit or bankers’ acceptances thereunder) (the committed amount permitted to be borrowed or reborrowed (and the issuance and creation of letters of credit and bankers’ acceptances) on a date pursuant to the operation of this clause (a) shall be the “ Reserved Indebtedness Amount ”) or (b) be determined on the date such amount is borrowed pursuant to any such facility or increased commitment.

 

SECTION 4.04.          Limitation on Restricted Payments .

 

(a)         UK Holdco shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)          declare or pay any dividend or make any distribution on account of UK Holdco’s or any of its Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger or consolidation involving UK Holdco (other than dividends, payments or distributions (A) payable solely in Equity Interests (other than Disqualified Stock) of UK Holdco or to UK Holdco and its Restricted Subsidiaries or (B) by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, UK Holdco or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

 

(ii)         purchase or otherwise acquire or retire for value any Equity Interests of UK Holdco or any direct or indirect parent of UK Holdco;

 

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(iii)        make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clause (viii) of Section 4.03(b)); or

 

(iv)        make any Restricted Investment;

 

(all such payments and other actions set forth in clauses (i) through (iv) above, other than any of the exceptions thereto, being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

 

(1)         no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(2)         immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness as Ratio Debt; and

 

(3)         such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by UK Holdco and its Restricted Subsidiaries after the Closing Date (including Restricted Payments permitted by Section 4.04(b)(1), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum of, without duplication,

 

(A)         50% of the Consolidated Net Income of UK Holdco for the period (taken as one accounting period) from October 1, 2016 to the end of UK Holdco’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

 

(B)         100% of the aggregate net proceeds, including cash and the Fair Market Value of assets other than cash, received by UK Holdco after the Closing Date from the issue or sale of Equity Interests of UK Holdco or any direct or indirect parent of UK Holdco (excluding (without duplication) the Equity Contribution, Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amount, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary or an employee stock ownership plan or trust established by UK Holdco or any of its Subsidiaries), plus

 

(C)         100% of the aggregate amount of contributions to the capital of UK Holdco received in cash and the Fair Market Value of property other than cash after the Closing Date (other than the Equity Contribution, Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock and Disqualified Stock and the Cash Contribution Amount), plus

 

(D)         the principal amount of any Indebtedness, or the liquidation preference or Maximum Fixed Repurchase Price, as the case may be, of any Disqualified Stock, of UK Holdco or any Restricted Subsidiary thereof issued after the Closing Date (other than Indebtedness or Disqualified Stock issued to UK Holdco or another Restricted Subsidiary) that has been converted into or exchanged for Equity Interests in UK Holdco or any direct or indirect parent of UK Holdco (other than Disqualified Stock), plus

 

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(E)         100% of the aggregate amount received by UK Holdco or any Restricted Subsidiary in cash and the Fair Market Value of property other than cash received by UK Holdco or any Restricted Subsidiary from:

 

(I)         the sale or other disposition (other than to UK Holdco or a Restricted Subsidiary) of Restricted Investments made by UK Holdco and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from UK Holdco and its Restricted Subsidiaries by any Person (other than UK Holdco or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to Section 4.04(b)(vii) or 4.04(b)(x)),

 

(II)        the sale (other than to UK Holdco or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or

 

(III)       any distribution or dividend from an Unrestricted Subsidiary (to the extent such distribution or dividend is not already included in the calculation of Consolidated Net Income), plus

 

(F)         in the event any Unrestricted Subsidiary of UK Holdco has been redesignated as a Restricted Subsidiary or has been merged or consolidated with or into, or transfers or conveys its assets to, or is liquidated into, UK Holdco or a Restricted Subsidiary, in each case after the Closing Date, the Fair Market Value of the Investment of UK Holdco in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to Section 4.04(b)(vii) or 4.04(b)(x) or constituted a Permitted Investment), plus

 

(G)         $40.0 million, plus

 

(H)         the aggregate amount of Retained Declined Proceeds since the Closing Date (to the extent Holders were provided notice in connection with the Asset Sale Offer related thereto that any Excess Proceeds not accepted by the Holders shall constitute Retained Declined Proceeds and such Retained Declined Proceeds will increase the amount available for Restricted Payments under Section 4.04(a)(3) to the extent not otherwise applied in accordance with Section 4.04(b)(xvi)).

 

(b)          The provisions of Section 4.04(a) shall not prohibit:

 

(i)          the payment of any dividend or distribution or consummation of any redemption within 60 days after the date of declaration thereof or the giving of a redemption notice related thereto, if at the date of declaration or notice such payment would have complied with the provisions of this Indenture;

 

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(ii)         (A) the redemption, repurchase, defeasance, exchange, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) of UK Holdco or any direct or indirect parent of UK Holdco or any Restricted Subsidiary or Subordinated Indebtedness of UK Holdco or any Restricted Subsidiary, in exchange for, or out of the proceeds of a sale (other than to UK Holdco or a Restricted Subsidiary) of, Equity Interests of UK Holdco or any direct or indirect parent of UK Holdco to the extent contributed to the Issuer or UK Holdco or contributions to the equity capital of the Issuer or UK Holdco (other than any Disqualified Stock or any Equity Interests sold to UK Holdco or any Subsidiary of UK Holdco or to an employee stock ownership plan or any trust established by UK Holdco or any of its Subsidiaries) (collectively, including any such contributions, “ Refunding Capital Stock ”); (B) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under Section 4.04(b)(vi), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, defease, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of UK Holdco) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement and (C) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the sale (other than to UK Holdco or a Restricted Subsidiary) (made within 90 days of such redemption, repurchase, defeasance, exchange, retirement or other acquisition) (other than to a Subsidiary of UK Holdco or to an employee stock ownership plan or any trust established by UK Holdco or any of its Subsidiaries) of Refunding Capital Stock;

 

(iii)        the redemption, repurchase, defeasance, exchange or other acquisition or retirement of Subordinated Indebtedness of UK Holdco or any Restricted Subsidiary (x) constituting Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction or (y) made by exchange for, or out of the proceeds of the sale (made within 90 days of such redemption, repurchase, defeasance, exchange, or other acquisition) of, new Indebtedness of UK Holdco or a Restricted Subsidiary that is Incurred in accordance with Section 4.03 so long as:

 

(A)         the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value ( plus accrued and unpaid interest and fees, underwriting discounts and expenses, including any premium and defeasance costs, required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, exchanged, acquired or retired plus any fees and expenses Incurred in connection therewith, including reasonable tender premiums);

 

(B)         such Indebtedness is subordinated to the Securities or the related Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, exchanged, acquired or retired;

 

(C)         such Indebtedness has a final scheduled maturity date no earlier than the final scheduled maturity date of the earlier of (i) the Subordinated Indebtedness being so redeemed, repurchased, defeased, exchanged, acquired or retired or (ii) the Securities; and

 

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(D)         such Indebtedness has a Weighted Average Life to Maturity that is not less than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired;

 

(iv)        the purchase, retirement, redemption or other acquisition (or dividends to the Issuer or any other direct or indirect parent of the Issuer to finance any such purchase, retirement, redemption or other acquisition) for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of UK Holdco or their estates or the beneficiaries of such estates pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other similar agreement or arrangement; provided , however , that the aggregate amounts paid under this clause (iv) do not exceed $20.0 million in any calendar year, which shall increase to $30.0 million subsequent to the consummation of an underwritten public Equity Offering by the Issuer or any direct or indirect parent (with unused amounts in any calendar year being carried over to the next two succeeding calendar years); provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:

 

(A)         the cash proceeds received by UK Holdco or any of its Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer or UK Holdco) to members of management, directors or consultants of UK Holdco and its Restricted Subsidiaries or any other direct or indirect parent of the Issuer that occurs after the Closing Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(a)(3)); plus

 

(B)         the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer or UK Holdco) or any other Restricted Subsidiary after the Closing Date;

 

( provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year); in addition, cancellation of Indebtedness owing to UK Holdco or any of its Restricted Subsidiaries from any current, former or future officer, director or employee (or any permitted transferees thereof) of UK Holdco or any of its Restricted Subsidiaries (or any direct or indirect parent company thereof), in connection with a repurchase of Equity Interests of the Issuer or UK Holdco from such Persons will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provisions under this Indenture;

 

(v)         the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of UK Holdco or any of its Restricted Subsidiaries and any Preferred Stock of any Restricted Subsidiaries issued or Incurred in accordance with Section 4.03;

 

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(vi)        (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Closing Date, (B) the declaration and payment of dividends to any direct or indirect parent of UK Holdco, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of UK Holdco issued after the Closing Date and (C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to Section 4.04(b)(ii); provided , however , that (I) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Fixed Charge Coverage Ratio of UK Holdco and its Restricted Subsidiaries would have been at least 2.00 to 1.00 and (II) the aggregate amount of dividends declared and paid pursuant to this clause (vi) does not exceed the net cash proceeds actually received by the Issuer or UK Holdco from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Closing Date;

 

(vii)       Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of (x) $35.0 million and (y) 1.0% of Total Assets (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding;

 

(viii)      the payment of dividends on UK Holdco’s common stock (or the payment of dividends to any direct or indirect parent of UK Holdco to fund the payment by any direct or indirect parent of UK Holdco of dividends on such entity’s common stock) of up to 6.0% per annum of the net proceeds received by UK Holdco from any public offering of common stock or contributed to UK Holdco or any other direct or indirect parent of UK Holdco from any public offering of common stock;

 

(ix)         Restricted Payments in an amount equal to the amount of Excluded Contributions made;

 

(x)          other Restricted Payments in an aggregate amount not to exceed the greater of (x) $100.0 million and (y) 2.5% of Total Assets;

 

(xi)         the distribution, as a dividend or otherwise, of shares of Capital Stock of, or other securities of, or Indebtedness owed to UK Holdco or a Restricted Subsidiary by, Unrestricted Subsidiaries;

 

(xii)        any payments pursuant to a Tax sharing agreement between UK Holdco and any other Person or a Restricted Subsidiary and any other Person with which UK Holdco or any Restricted Subsidiary files a consolidated Tax return or with which UK Holdco or any Restricted Subsidiary is part of a group for Tax purposes or any Tax advantageous group contribution made pursuant to applicable legislation; provided , however , that any such Tax sharing or arrangement and payment does not permit or require payments in excess of the amounts of Tax that would be payable by UK Holdco or the Restricted Subsidiaries on a stand-alone basis;

 

(xiii)       the payment of dividends, other distributions or other amounts to, or the making of loans to any direct or indirect parent of UK Holdco, in the amount required for such entity to:

 

(A)         pay amounts equal to the amounts required for any direct or indirect parent of UK Holdco to pay fees and expenses (including franchise or similar Taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of UK Holdco or any direct or indirect parent of UK Holdco, if applicable, and general corporate operating and overhead expenses of any direct or indirect parent of UK Holdco, if applicable, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of UK Holdco, if applicable, and its Subsidiaries;

 

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(B)         pay, if applicable, amounts equal to amounts required for any direct or indirect parent of UK Holdco, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to UK Holdco or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, UK Holdco or any of its Restricted Subsidiaries Incurred in accordance with Section 4.03;

 

(C)         pay fees and expenses Incurred by any direct or indirect parent, other than to Affiliates of UK Holdco, related to any equity or debt offering of such parent; and

 

(D)         make payments to the Sponsors (a) pursuant to the Management Agreement or any amendment thereto (so long as such amendment is not less advantageous to the Holders, when taken as a whole, in any material respect than the Management Agreement) or (b) for any other financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, in each case to the extent permitted under Section 4.07(b)(xii) and (xiii);

 

(xiv)      (i) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants and (ii) in connection with the withholding of a portion of the Equity Interests granted or awarded to a director or an employee to pay for the Taxes payable by such director or employee upon such grant or award;

 

(xv)       purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

 

(xvi)      the payment, purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco and its Restricted Subsidiaries pursuant to provisions similar to those described under Section 4.06 and Section 4.08; provided that, prior to such payment, purchase, redemption, defeasance or other acquisition or retirement for value, the Issuer (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Securities as a result of such Change of Control or Asset Sale, as the case may be, and has repurchased all such Securities validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer, as the case may be;

 

(xvii)     any joint venture that is not a Restricted Subsidiary may make Restricted Payments required or permitted to be made pursuant to the terms of the joint venture arrangements to holders of its Equity Interests;

 

(xviii)    any Restricted Payments made in connection with the consummation of the Transactions (including (i) any such payments made in connection with obligations set forth in the Acquisition Agreement and any transaction services agreement related thereto, in each case to effectuate the Day 2 Acquisition and (ii) dividends or distributions to any direct or indirect parent of UK Holdco to fund such payment);

 

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(xix)       the payment of cash in lieu of the issuance of fractional shares of Equity Interests upon exercise or conversion of securities exercisable or convertible into Equity Interests of UK Holdco;

 

(xx)        payments or distributions, in the nature of satisfaction of dissenters’ rights, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all the property and assets of UK Holdco and its Subsidiaries;

 

(xxi)       the redemption, repurchase, defeasance, exchange or other acquisition or retirement of Subordinated Indebtedness of UK Holdco or any Restricted Subsidiary or any direct or indirect parent of the Issuer in an aggregate amount not to exceed $25.0 million; and

 

(xxii)      other Restricted Payments, so long as the Consolidated Total Debt Ratio of UK Holdco and its Restricted Subsidiaries on a consolidated basis is no greater than 5.25 to 1.00, determined on a pro forma basis for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such Restricted Payment;

 

provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under Section 4.04(b)(x) and 4.04(b)(xxii), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

 

(c)          UK Holdco shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by UK Holdco and its Restricted Subsidiaries (except to the extent repaid prior to the time of designation) in the Subsidiary so designated shall be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

(d)          For purposes of this Section 4.04, if any Investment or Restricted Payment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Issuer may divide and classify such Investment or Restricted Payment in any manner that complies with this Section 4.04 and may later divide and reclassify any such Investment or Restricted Payment so long as the Investment or Restricted Payment (as so divided and/or reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.

 

(e)          For the avoidance of doubt, no payment, dividend or distribution on account of loans made pursuant to the Tower Structure Transactions shall be a Restricted Payment.

 

SECTION 4.05.          Dividend and Other Payment Restrictions Affecting Subsidiaries . UK Holdco shall not, and shall not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause to become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:

 

(a)          (i) pay dividends or make any other distributions to UK Holdco or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to UK Holdco or any of its Restricted Subsidiaries;

 

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(b)          make loans or advances to UK Holdco or any of its Restricted Subsidiaries; or

 

(c)          sell, lease or transfer any of its properties or assets to UK Holdco or any of its Restricted Subsidiaries;

 

except in each case for such encumbrances or restrictions existing under or by reason of:

 

(1)         contractual encumbrances or restrictions in effect or entered into or existing on the Closing Date, including pursuant to the Credit Agreement, Hedging Obligations, the other documents relating to the Transactions and the Tower Structure Transactions;

 

(2)         this Indenture, the Securities, any Additional Securities permitted to be Incurred under this Indenture and in each case any exchange notes and guarantees thereof;

 

(3)         applicable law or any applicable rule, regulation or order;

 

(4)         any agreement or other instrument of a Person acquired by UK Holdco or any Restricted Subsidiary which was in existence at the time of such acquisition or at the time it merges with or into UK Holdco or any Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person and its Subsidiaries, other than the Person, or the property or assets of the Person and its Subsidiaries, so acquired or the property or assets so assumed;

 

(5)         contracts or agreements for the sale of assets, including customary restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary;

 

(6)         Indebtedness secured by a Lien that is otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.11 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

 

(7)         restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(8)         customary provisions in joint venture, operating or other similar agreements, asset sale agreements and stock sale agreements in connection with the entering into of such transaction;

 

(9)         purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired;

 

(10)        customary provisions contained in leases, licenses, contracts and other similar agreements entered into in the ordinary course of business (including leases or licenses of intellectual property) that impose restrictions of the type described in clause (c) above on the property subject to such lease, license, contract or agreement;

 

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(11)        any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , however , that such restrictions apply only to such Receivables Subsidiary;

 

(12)        other Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or any Restricted Subsidiary that is Incurred subsequent to the Closing Date pursuant to Section 4.03; provided that either (a) such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuer’s ability to make anticipated principal or interest payment on the Securities (as determined by the Issuer in good faith) or (b) such encumbrances and restrictions are not materially more restrictive, taken as a whole, than those contained in this Indenture (with respect to other indentures) or the Credit Agreement outstanding on the Closing Date (with respect to other credit agreements);

 

(13)        any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment;

 

(14)        arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of UK Holdco or any Restricted Subsidiary thereof in any manner material to UK Holdco or any Restricted Subsidiary thereof;

 

(15)        existing under, by reason of or with respect to Refinancing Indebtedness; provided that the encumbrances and restrictions contained in the agreements governing that Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(16)        restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which UK Holdco or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of UK Holdco or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of UK Holdco or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary; and

 

(17)        any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (16) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, not materially more restrictive as a whole with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to UK Holdco or a Restricted Subsidiary to other Indebtedness Incurred by UK Holdco or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

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SECTION 4.06.          Asset Sales .

 

(a)          UK Holdco shall not, and shall not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless:

 

(1)         UK Holdco or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Issuer) of the Equity Interests issued or assets sold or otherwise disposed of; and

 

(2)         except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by UK Holdco or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided, however, that in the case of Asset Sales involving the disposition of non-core assets (as determined by the Issuer in its good faith judgment; provided the value of such non-core assets does not exceed 50% of the consideration payable in connection with such acquisition) acquired as part of any acquisition after the Closing Date, only 50% of the consideration therefor must be in the form of Cash Equivalents; provided, further, that the amount of:

 

(i)          any liabilities (as shown on UK Holdco’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto or, if Incurred, increased or decreased subsequent to the date of such balance sheet, such liabilities that would have been reflected in UK Holdco’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such Incurrence, increase or decrease had taken place on the date of such balance sheet, as reasonably determined in good faith by the Issuer) of UK Holdco or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Securities) that are assumed by the transferee (or a third party on behalf of the transferee) of any such assets or Equity Interests pursuant to an agreement that releases or indemnifies UK Holdco or such Restricted Subsidiary (or a third party on behalf of the transferee), as the case may be, from further liability;

 

(ii)         any notes or other obligations or other securities or assets received by UK Holdco or such Restricted Subsidiary from such transferee that are converted by UK Holdco or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received);

 

(iii)        any Designated Non-cash Consideration received by UK Holdco or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of (x) $75.0 million and (y) 2.0% of Total Assets, at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value);

 

(iv)        Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the extent that UK Holdco and each other Restricted Subsidiary are released from any Guarantee of such Indebtedness in connection with such Asset Sale; and

 

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(v)         consideration consisting of Indebtedness of the Issuer or any Guarantor received from Persons who are not UK Holdco or a Restricted Subsidiary, shall each be deemed to be Cash Equivalents for the purposes of this Section 4.06.

 

(b)          Within 450 days after UK Holdco’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, UK Holdco or such Restricted Subsidiary may apply the Net Cash Proceeds from such Asset Sale, at its option:

 

(i)          to repay Secured Indebtedness of the Issuer or any Guarantor (and, if the Secured Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto),

 

(ii)         to repay Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the relevant Guarantee (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto) ( provided that if the Issuer or any Guarantor shall so reduce such Indebtedness, the Issuer or such Guarantor will equally and ratably reduce Obligations under the Securities (A) through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof), (B) by redeeming Securities if the Securities are then redeemable as provided under Article 3 or (C) by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the principal amount of the Securities),

 

(iii)        to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case used or useful in a Similar Business,

 

(iv)        to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), properties or assets that replace the properties and assets that are the subject of such Asset Sale (“ Replacement Assets ”),

 

(v)         to repay Indebtedness of a Restricted Subsidiary that is not a Guarantor (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), other than Indebtedness owed to UK Holdco or another Restricted Subsidiary, or

 

(vi)        any combination of the foregoing;

 

provided that UK Holdco and its Restricted Subsidiaries shall be deemed to have complied with Sections 4.06(b)(iii) and (iv) if and to the extent that, within 450 days after the Asset Sale that generated the Net Cash Proceeds, the Issuer or UK Holdco has entered into and not abandoned or rejected a binding agreement to acquire the assets or Capital Stock of a Similar Business, make an Investment in Replacement Assets or make a capital expenditure in compliance with the provision described in Sections 4.06(b)(iii) and (iv) (an “ Acceptable Agreement ”) with the good faith expectation that such acquisition, purchase or capital expenditure will be completed within 180 days after the end of such 450-day period; provided , further , that if any Acceptable Agreement is later cancelled or terminated for any reason after the end of such 450-day period and before such Net Cash Proceeds are applied, then such Net Cash Proceeds shall constitute Excess Proceeds.

 

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Notwithstanding the foregoing, to the extent that (x) a distribution of any or all of the Net Cash Proceeds of any Asset Sales by a Subsidiary to UK Holdco (and payment of such amounts by UK Holdco to the Issuer) is prohibited or delayed by applicable local law (including financial assistance and corporate benefit restrictions and fiduciary and statutory duties of the relevant directors) or (y) a distribution of any or all of the Net Cash Proceeds of any Asset Sales by a Subsidiary to UK Holdco (and payment of such amounts by UK Holdco to the Issuer) could result in material adverse Tax consequences, as determined by UK Holdco in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this Section 4.06; provided that within 450 days of the receipt of such Net Cash Proceeds, the Issuer shall use commercially reasonable efforts to permit repatriation of the proceeds that would otherwise be subject to this Section 4.06 without violating local law or incurring material adverse Tax consequences, and, if such proceeds may be repatriated, within such 450 day period, such proceeds shall be required to be applied in compliance with this Section 4.06.

 

Pending the final application of any such Net Cash Proceeds, UK Holdco or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds in Cash Equivalents or Investment Grade Securities. Any Net Cash Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the two preceding paragraphs (it being understood that any portion of such Net Cash Proceeds used to make an offer to purchase Securities, as described in Section 4.06(b)(ii), shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Issuer shall make an offer to all Holders of Securities, and if required by the terms of any Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the relevant Guarantee, to the holders of such Indebtedness (an “ Asset Sale Offer ”) to purchase the maximum principal amount of Securities and such Indebtedness that is at least $2,000 and integral multiples of $1,000 in excess thereof with respect to the Securities that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the relevant Guarantee was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any, to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $50.0 million by mailing or electronically sending the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Issuer may satisfy the foregoing obligations with respect to any Net Cash Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Cash Proceeds prior to the expiration of the relevant 450 days (or such longer period provided above) or with respect to Excess Proceeds of $50.0 million or less. To the extent that the aggregate amount of Securities and such Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the relevant Guarantee tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds (any such amount, “ Retained Declined Proceeds ”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Securities or the Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the relevant Guarantee surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select or cause to be selected the Securities and the trustee or agent for such other Indebtedness shall select such other Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Securities or such Indebtedness tendered (subject to adjustment so that no Securities in an unauthorized denomination shall remain outstanding after such purchase). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

 

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(c)          The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Securities pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

 

SECTION 4.07.          Transactions with Affiliates .

 

(a)          UK Holdco shall not, and shall not permit any Restricted Subsidiaries of UK Holdco to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of UK Holdco (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $25.0 million, unless:

 

(i)          such Affiliate Transaction is on terms that are not materially less favorable to UK Holdco or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by UK Holdco or such Restricted Subsidiary with an unrelated Person; and

 

(ii)         with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30.0 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer or any other direct or indirect parent of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate provided to the Trustee certifying that such Affiliate Transaction complies with clause (i) above.

 

(b)          The provisions of Section 4.07(a) shall not apply to the following:

 

(i)          (A) transactions between or among UK Holdco and/or any of the Restricted Subsidiaries of UK Holdco (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and (B) any merger or consolidation of UK Holdco or any direct parent company of UK Holdco; provided that such parent company shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of UK Holdco and such merger or consolidation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

 

(ii)         (x) Restricted Payments permitted by Section 4.04 (including any payments that are exceptions to the definition of Restricted Payments set forth in Sections 4.04(a)(i) through (iv)) and (y) Permitted Investments;

 

(iii)        transactions pursuant to compensatory, benefit and incentive plans and agreements with officers, directors, managers or employees of UK Holdco (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries approved by a majority of the Board of Directors of UK Holdco in good faith;

 

(iv)        the payment of reasonable and customary fees and reimbursements paid to, and indemnity and similar arrangements provided on behalf of, former, current or future officers, directors, managers, employees or consultants of UK Holdco or any Restricted Subsidiary or any direct or indirect parent of UK Holdco;

 

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(v)         transactions in which UK Holdco or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to UK Holdco or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 4.07(a)(i);

 

(vi)        payments, loans or advances to employees or consultants or guarantees in respect thereof (or cancellation of loans, advances or guarantees) for bona fide business purposes in the ordinary course of business;

 

(vii)       any agreement, instrument or arrangement as in effect as of the Closing Date or any transaction contemplated thereby, or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders in any material respect when taken as a whole as compared to the applicable agreement as in effect on the Closing Date as reasonably determined by the Issuer in good faith);

 

(viii)      the existence of, or the performance by UK Holdco or any of its Restricted Subsidiaries of its obligations under the terms of any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date, and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided , however , that the existence of, or the performance by UK Holdco or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Closing Date shall only be permitted by this clause (viii) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the Holders in any material respect when taken as a whole as compared to the original transaction, agreement or arrangement as in effect on the Closing Date;

 

(ix)         (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to UK Holdco and its Restricted Subsidiaries in the reasonable determination of UK Holdco, and are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business;

 

(x)          any transaction effected as part of a Qualified Receivables Financing;

 

(xi)         the sale or issuance of Equity Interests (other than Disqualified Stock) of the Issuer or UK Holdco;

 

(xii)        the payment of annual management, consulting, monitoring and advisory fees to the Sponsors pursuant to the Management Agreement in an aggregate amount in any fiscal year not to exceed the greater of (x) $3.0 million and (y) 1.0% of EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such payment is made, plus all reasonable out-of-pocket expenses Incurred by the Sponsors or any of their Affiliates in connection with the performance of management, consulting, monitoring, advisory or other services with respect to UK Holdco and its Restricted Subsidiaries, plus any applicable termination fee paid pursuant to such Management Agreement;

 

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(xiii)       payments by UK Holdco or any of its Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to agreements with the Sponsors as in effect on the Closing Date or (y) approved by a majority of the Board of Directors of UK Holdco or any direct or indirect parent of UK Holdco in good faith;

 

(xiv)      any contribution to the capital of UK Holdco or any Restricted Subsidiary;

 

(xv)       transactions permitted by, and complying with, the provisions of Section 5.01;

 

(xvi)      [reserved];

 

(xvii)     pledges of Equity Interests of Unrestricted Subsidiaries;

 

(xviii)    any employment agreements, option plans and other similar arrangements entered into by UK Holdco or any of its Restricted Subsidiaries with employees or consultants in the ordinary course of business;

 

(xix)       the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of UK Holdco or any direct or indirect parent of UK Holdco or of a Restricted Subsidiary, as appropriate, in good faith;

 

(xx)        the entering into of any tax sharing agreement or arrangement and any payments permitted by Section 4.04(b)(xii) or with respect to franchise or similar Taxes, by Section 4.04(b)(xiii);

 

(xxi)       transactions to effect the Transactions and the Tower Structure Transactions and the payment of all fees and expenses related to the Transactions and the Tower Structure Transactions;

 

(xxii)      any employment, consulting, service or termination agreement, or customary indemnification arrangements, entered into by UK Holdco or any of its Restricted Subsidiaries with current, former or future officers and employees of UK Holdco or any of its respective Restricted Subsidiaries and the payment of compensation to officers and employees of UK Holdco or any of its respective Restricted Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), in each case in the ordinary course of business;

 

(xxiii)     transactions with a Person that is an Affiliate of UK Holdco solely because UK Holdco, directly or indirectly, owns Equity Interests in, or controls, such Person entered into in the ordinary course of business;

 

(xxiv)    transactions with Affiliates solely in their capacity as holders of Indebtedness, Equity Interests of UK Holdco or any of its Subsidiaries, so long as such transaction is with all holders of such class (and there are such non-Affiliate holders) and such Affiliates are treated no more favorably than all other holders of such class generally;

 

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(xxv)     any agreement that provides customary registration rights to the equity holders of UK Holdco or any direct or indirect parent of UK Holdco and the performance of such agreements;

 

(xxvi)    payments to and from and transactions with any joint venture in the ordinary course of business; provided such joint venture is not controlled by an Affiliate (other than a Restricted Subsidiary) of UK Holdco;

 

(xxvii)   transactions between UK Holdco or any of its Restricted Subsidiaries and any Person that is an Affiliate thereof solely due to the fact that a director of such Person is also a director of the Issuer or any direct or indirect parent of the Issuer; provided , however , that such director abstains from voting as a director of the Issuer or such direct or indirect parent of the Issuer, as the case may be, on any matter involving such other Person; and

 

(xxviii)    transactions with any Day 2 Subsidiary and with any entity that owns Day 2 Assets or Day 2 Liabilities (as such transaction relates to such Day 2 Assets or Day 2 Liabilities), in each case until such time as such Day 2 Subsidiary, Day 2 Asset or Day 2 Liability is acquired by UK Holdco or one of its Restricted Subsidiaries.

 

SECTION 4.08.          Change of Control .

 

(a)          Upon the occurrence of a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof (the “ Change of Control Payment ”), plus accrued and unpaid interest, if any, to, but not including, the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in this Section 4.08; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Securities pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Securities of such Holder in accordance with Article 3 of this Indenture.

 

(b)          Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Securities in accordance with Article 3 of this Indenture, the Issuer shall send electronically, mail by first-class mail or otherwise provide in accordance with the procedures of the Depository, a notice (a “ Change of Control Offer ”) to each Holder with a copy to the Trustee describing:

 

(i)          that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of the Holders of record on a record date to receive interest on the relevant interest payment date);

 

(ii)         the transaction or transactions constitute a Change of Control;

 

(iii)        the repurchase date (which shall be no earlier than 10 days nor later than 60 days from the date such notice is sent, except if delivered in advance of the occurrence of such Change of Control in accordance with this Section 4.08); and

 

(iv)        the instructions determined by the Issuer that a Holder must follow in order to have its Securities purchased.

 

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(c)          Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. The Holders shall be entitled to withdraw their election if the Trustee or the Issuer receive not later than two Business Days prior to the purchase date a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased. Holders whose Securities are purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered.

 

(d)          On the purchase date, all Securities purchased by the Issuer under this Section 4.08 shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest to the Holders entitled thereto.

 

(e)          Notwithstanding the foregoing provisions of this Section 4.08, the Issuer shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in Section 4.08(b) applicable to a Change of Control Offer made by the Issuer and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer. In addition, for the avoidance of doubt, the Issuer will not be required to make a Change of Control Offer if the Issuer has previously issued a notice of a full redemption pursuant to the provisions set forth under Article 3 of this Indenture.

 

(f)          At the time the Issuer delivers Securities to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officer’s Certificate stating that such Securities are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.08. A Security shall be deemed to have been accepted for purchase at the time the Trustee or the Paying Agent, directly or through an agent, mails or delivers payment therefor to the surrendering Holder.

 

(g)          Prior to any Change of Control Offer, the Issuer shall deliver to the Trustee an Officer’s Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with.

 

(h)          The Issuer shall comply, to the extent applicable, with the requirements of Rule 14(e)-1 of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.08. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 by virtue of such compliance.

 

(i)          Notwithstanding the foregoing provisions, a Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, with a purchase date to occur upon, or within a specified period of time not to exceed 15 days after, the consummation of such Change of Control.

 

(j)          If Holders of not less than 90% in aggregate principal amount of the outstanding Securities validly tender and do not withdraw such Securities in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described in Section 4.08(e), purchases all of the Securities validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon not less than 10 days nor more than 60 days’ prior notice; provided that such notice is given not more than 30 days following such purchase pursuant to the Change of Control Offer described in this Section 4.08, to redeem all Securities that remain outstanding following such purchase at a redemption price in cash equal to the applicable Change of Control Payment plus , to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, to, but excluding, the date of redemption.

 

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SECTION 4.09.          Compliance Certificate . UK Holdco shall deliver to the Trustee within 120 days after the end of each fiscal year of UK Holdco an Officer’s Certificate, the signer of which shall be the principal executive officer, principal accounting officer, principal financial officer or duly authorized manager or director of UK Holdco, stating that in the course of the performance by the signer of his or her duties as an officer, manager or director of UK Holdco he or she would normally have knowledge of any Default and whether or not the signer knows of any Default that occurred during such period. If he or she does, the certificate shall describe the Default, its status and what action UK Holdco or the Issuer, as applicable, is taking or proposes to take with respect thereto.

 

SECTION 4.10.          Future Guarantors . Subject to the Guaranty and Security Principles, if, after the Closing Date, any Restricted Subsidiary (including any newly formed, newly acquired or newly redesignated Restricted Subsidiary, but excluding any Excluded Subsidiary) that is not then a Guarantor guarantees or Incurs any Indebtedness under the Credit Agreement, then UK Holdco shall cause such Restricted Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary shall become a Guarantor under this Indenture within 20 Business Days of the date that such guarantee has been granted pursuant to the Credit Agreement.

 

SECTION 4.11.          Liens . UK Holdco shall not, and shall not permit the Issuer or any of the other Guarantors to, directly or indirectly, create or Incur any Lien (other than Permitted Liens) that secures obligations under any Indebtedness on any asset or property of the Issuer or any Guarantor, unless:

 

(1)         in the case of Liens securing Subordinated Indebtedness, the Securities or the applicable Guarantee of a Guarantor, as the case may be, are secured by a Lien on such property or assets that is senior in priority to such Liens; and

 

(2)         in all other cases, the Securities or the applicable Guarantee of a Guarantor, as the case may be, are equally and ratably secured.

 

Notwithstanding the foregoing, any Lien securing the Securities granted pursuant to this Section 4.11 shall be automatically and unconditionally released and discharged upon (a) the release by the holders of the Indebtedness described above of their Lien on the property or assets of the Issuer or any Guarantor (including any deemed release upon payment in full of all obligations under such Indebtedness (except upon foreclosure or default of such Indebtedness)), (b) any sale, exchange or transfer to any Person other than the Issuer or any Guarantor of the property or assets secured by such Lien, or of all of the Capital Stock held by the Issuer or any Guarantor in, or all or substantially all the assets of, any Guarantor creating such Lien in each case in accordance with the terms of this Indenture, (c) payment in full of the principal of, and accrued and unpaid interest, if any, on the Securities, or (d) a defeasance or discharge of the Securities in accordance with the procedures described in Article 8.

 

For purposes of determining compliance with this Section 4.11, (x) a Lien need not be Incurred solely by reference to one category of Permitted Liens but may be Incurred under any combination of such categories (including in part under one such category and in part under any other such category) and (y) in the event that a Lien (or any portion thereof) meets the criteria of one or more of such categories of Permitted Liens, the Issuer shall, in its sole discretion, divide, classify or may subsequently reclassify at any time such Lien (or any portion thereof) in any manner that complies with this Section 4.11 and the definition of “Permitted Liens.”

 

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With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “ Increased Amount ” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, accretion of original issue discount or liquidation preference, any fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection therewith and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness.

 

SECTION 4.12.          Maintenance of Office or Agency .

 

(a)          The Issuer shall maintain, in the United States, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Securities may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Securities and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the corporate trust office of the Trustee as set forth in Section 12.02.

 

(b)          The Issuer may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency; provided that the office or agency of the Trustee shall not be an office or agency of the Issuer for purposes of service of legal process against the Issuer or any Guarantor.

 

(c)          The Issuer hereby designates the corporate trust office of the Trustee or its agent as such office or agency of the Issuer in accordance with Section 2.04.

 

SECTION 4.13.          Suspension of Covenants .

 

(a)          If on any date following the Closing Date (i) the Securities have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “ Covenant Suspension Event ”), UK Holdco and its Restricted Subsidiaries shall not be subject to Section 4.03, Section 4.04, Section 4.05, Section 4.06, Section 4.07, Section 4.10, Section 5.01(a)(iv) and Section 5.01(b)(iv) (collectively, the “ Suspended Covenants ”).

 

(b)          In the event that UK Holdco and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Securities below an Investment Grade Rating, then UK Holdco and its Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events.

 

(c)          The period of time between the occurrence of a Covenant Suspension Event and the Reversion Date is referred to as the “ Suspension Period .” Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Cash Proceeds shall be reset at zero.

 

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(d)          In the event of any such reinstatement on a Reversion Date, no action taken or omitted to be taken by UK Holdco or any of its Restricted Subsidiaries prior to such Reversion Date (and no action taken or omitted to be taken following a Reversion Date in connection with honoring, complying with or otherwise performing or consummating any contractual commitments or obligations entered into during a Suspension Period) shall give rise to a Default or Event of Default under this Indenture with respect to any Securities; provided that (1) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made shall be calculated as though Section 4.04 had been in effect prior to, but not during, the Suspension Period; provided that no Subsidiaries may be designated as Unrestricted Subsidiaries during the Suspension Period unless such designation would have complied with Section 4.04 as if Section 4.04 would have been in effect during such period and (2) all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period shall be classified as having been Incurred or issued pursuant to Section 4.03(b)(iii). In addition, for purposes of Section 4.07, all agreements and arrangements entered into by the Issuer and any Restricted Subsidiary with an Affiliate of UK Holdco during the Suspension Period prior to such Reversion Date shall be deemed to have been entered into on or prior to the Closing Date, and for purposes of Section 4.05, all contracts entered into during the Suspension Period prior to such Reversion Date that contain any of the restrictions contemplated by such Section 4.05 shall be deemed to have been existing on the Closing Date.

 

(e)          The Issuer shall provide an Officer’s Certificate to the Trustee indicating the occurrence of any Covenant Suspension Event or Reversion Date. The Trustee will have no obligation to (i) independently determine or verify if such events have occurred, (ii) make any determination regarding the impact of actions taken during the Suspension Period on UK Holdco and its Subsidiaries’ future compliance with their covenants or (iii) notify the Holders of any Covenant Suspension Event or Reversion Date.

 

SECTION 4.14.          Amendments to the Acquisition Agreement . UK Holdco will not, and will not permit any direct or indirect parent company of UK Holdco, to amend, supplement, modify or grant any consent or waiver with respect to, the last sentence of Section 2.04(d) of the Acquisition Agreement, in each case in a manner materially adverse to the Holders.

 

SECTION 4.15.          Limitation on Issuer Activities .

 

(a)          The Issuer shall not engage in any business activity except any activity (i) relating to the Incurrence of Indebtedness represented by the Securities, any Additional Securities or as permitted by this Indenture (including any Indebtedness Incurred in the future) and making Investments pursuant to the Proceeds Bonds or any future proceeds loan with the proceeds from such Incurrence of Indebtedness (including, but not limited to, the lending of the proceeds from the Incurrence of such Indebtedness and the receipt of interest, principal and other payments thereon and subsequent use thereof in connection with payments pursuant to such Incurrence of Indebtedness), (ii) undertaken with the purpose of, related to, or otherwise incidental or resulting from the Incurrence of such Indebtedness or the making of such Investments or in connection with fulfilling its obligations thereunder, including pursuant to the Proceeds Bonds or future agreements similar to any of the foregoing, and any repurchase, purchase, repayment, redemption, refinancing or prepayment of, or any consent, amendment, supplement or modification with respect to, or similar actions with respect to, such Indebtedness and Investments, (iii) undertaken with the purpose of, related to or otherwise incidental or resulting from the establishment and maintenance of the Issuer’s corporate existence, (iv) other activities that are de minimis in nature, (v) related to using amounts received by the Issuer to make investments in cash or Cash Equivalents in a manner not otherwise prohibited by this Indenture or (vi) reasonably related to the foregoing.

 

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(b)          The Issuer shall not (a) issue any Capital Stock (other than to UK Holdco) or (b) undertake any action that will require the Issuer to register as an “investment company” or an entity “controlled by an investment company” as defined in the US Investment Company Act of 1940, as amended and the rules and regulations thereunder.

 

(c)          UK Holdco shall not, and UK Holdco shall not permit any of its Restricted Subsidiaries or any other Person that is an obligor under the Proceeds Bonds, to (i) sell, dispose, prepay, repay, repurchase, redeem or otherwise acquire, reduce or retire any amounts outstanding under the Proceeds Bonds or (ii) amend, modify, supplement or waive any rights under the Proceeds Bonds in a manner that would adversely affect the rights in any material respect of the Issuer or its creditors with respect to the Proceeds Bonds, except in the case of clause (i) or (ii) of this Section 4.15(c), (A) in connection with a redemption, repayment, purchase, refinancing, prepayment, repurchase, acquisition, reduction, retirement or similar action with respect to outstanding Securities in a manner not prohibited by this Indenture or outstanding borrowings in a manner not prohibited by the Credit Agreement, or (B) in connection with, pursuant to or to reflect any amendment, modification, supplement or waiver under the Securities, this Indenture or the Credit Agreement.

 

(d)          UK Holdco shall cause the Issuer to, and the Issuer shall, at all times remain a Wholly Owned Restricted Subsidiary of UK Holdco.

 

(e)          For so long as any Securities are outstanding, UK Holdco shall not, and shall not permit any of its Restricted Subsidiaries to, commence or take any action to facilitate a winding-up, liquidation or other analogous proceeding in respect of the Issuer.

 

ARTICLE 5

 

SUCCESSOR COMPANY

 

SECTION 5.01.          Merger, Consolidation or Sale of All or Substantially All Assets .

 

(a)          UK Holdco shall not consolidate or merge with or into or wind up into (whether or not UK Holdco is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (determined on a consolidated basis), in one or more related transactions, to any Person unless:

 

(i)          UK Holdco is the surviving corporation or the Person(s) formed by or surviving any such consolidation or merger (if other than UK Holdco) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, any territory of the United States, Luxembourg, or the United Kingdom (UK Holdco or such Person(s), as the case may be, being herein called the “ Successor Parent Guarantor ”);

 

(ii)         the Successor Parent Guarantor (if other than UK Holdco) expressly assumes all the obligations of UK Holdco under this Indenture and the Securities, pursuant to supplemental indentures or other documents or instruments;

 

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(iii)        immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Parent Guarantor or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Parent Guarantor or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

 

(iv)        immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period, either:

 

(A)         the Successor Parent Guarantor would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt; or

 

(B)         the Fixed Charge Coverage Ratio for the Successor Parent Guarantor and its Restricted Subsidiaries would not be less than such ratio for UK Holdco and its Restricted Subsidiaries immediately prior to such transaction; and

 

(v)         UK Holdco shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which may be subject to customary assumptions and exclusions), each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with, and are permitted by, this Indenture and that this Indenture constitutes a valid and binding obligation of the Successor Parent Guarantor.

 

The Successor Parent Guarantor will succeed to, and be substituted for, UK Holdco under this Indenture and UK Holdco’s Guarantee, and UK Holdco will automatically be released and discharged from its obligations under this Indenture and UK Holdco’s Guarantee.

 

Notwithstanding the foregoing Section 5.01(a)(iii) and (iv), (w) UK Holdco may merge or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing UK Holdco in a state of the United States, the District of Columbia, any territory of the United States, Luxembourg or the United Kingdom, (x) UK Holdco may merge or consolidate with or transfer all or part of its properties or assets to another Guarantor or the Issuer, (y) UK Holdco may convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of UK Holdco or any of the jurisdictions set forth in clause (w) of this sentence, and (z) the Transactions may occur, so long as, in each case, the amount of Indebtedness of UK Holdco and its Restricted Subsidiaries is not increased thereby (any transaction described in this sentence, a “ Specified Parent Guarantor Merger/Transfer Transaction ”).

 

(b)          The Issuer shall not, and UK Holdco shall not permit the Issuer to, consolidate or merge with or into or wind up into (whether or not the Issuer is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (determined on a consolidated basis), in one or more related transactions, to any Person unless:

 

(i)          the Issuer is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, any territory of the United States, Luxembourg or the United Kingdom (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”) and, if such entity is not a corporation, a co-obligor of the Securities is a corporation organized or existing under such laws;

 

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(ii)         the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Securities pursuant to supplemental indentures or other documents or instruments;

 

(iii)        immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing;

 

(iv)        immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period, either

 

(A)         the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt; or

 

(B)         the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would not be less than such ratio for UK Holdco and its Restricted Subsidiaries immediately prior to such transaction; and

 

(v)         the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which may be subject to customary assumptions and exclusions), each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with, and are permitted by, this Indenture and that this Indenture constitutes a valid and binding obligation of the Successor Company.

 

The Successor Company (if other than the Issuer) shall succeed to, and be substituted for, the Issuer under this Indenture and the Securities, and in such event, the Issuer shall automatically be released and discharged from its obligations under this Indenture and the Securities. Notwithstanding the foregoing Sections 5.01(b)(iii) and (iv), (x) the Issuer may consolidate with, merge into or sell, assign, transfer, lease, convey or otherwise dispose of all or part of its properties and assets to UK Holdco or any Restricted Subsidiary, (y) the Issuer may merge or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Issuer in a state of the United States, the District of Columbia, any territory of the United States, Luxembourg or the United Kingdom and (z) the Transactions may occur, so long as, in each case, the amount of Indebtedness of UK Holdco and its Restricted Subsidiaries is not increased thereby (any transaction described in this sentence, a “ Specified Merger/Transfer Transaction ”).

 

(c)          Subject to the provisions of Section 11.02(d), which govern the release of a Guarantee upon the sale or disposition of a Guarantor, each Subsidiary Guarantor shall not, and UK Holdco shall not permit any Subsidiary Guarantor to, consolidate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person (herein called the “ Successor Guarantor ”) (other than the Transactions) unless:

 

(i)          the surviving company (or company to which assets are transferred) in such liquidation, merger, sale, transfer or other disposition is the Issuer or a Guarantor; or

 

(ii)         (A)         such sale or disposition or consolidation or merger is not in violation of Section 4.06;

 

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(B)         immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing;

 

(C)         the Successor Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which may be subject to customary assumptions and exclusions), stating that such consolidation, merger or transfer and such supplemental indenture complies with this Indenture and that this Indenture constitutes a valid and binding obligation of the Successor Guarantor; and

 

(D)         the Successor Guarantor expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and the Securities, pursuant to a supplemental indenture.

 

The Successor Guarantor shall succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and such Subsidiary Guarantor’s Guarantee, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under this Indenture and such Subsidiary Guarantor’s Guarantee.

 

(d)          Notwithstanding the requirements set forth in Section 5.01(c), (1) a Subsidiary Guarantor may merge or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing such Subsidiary Guarantor in a state of the United States, the District of Columbia, any territory of the United States, Luxembourg or the United Kingdom, so long as the amount of Indebtedness of the Subsidiary Guarantor is not increased thereby, (2) a Subsidiary Guarantor may merge or consolidate with or transfer all or part of its properties or assets to another Guarantor or the Issuer, and (3) a Subsidiary Guarantor may convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of such Subsidiary Guarantor or any of the jurisdictions set forth in clause (1) of this sentence.

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

SECTION 6.01.          Events of Default . An “ Event of Default ” occurs if:

 

(a)          the Issuer defaults in any payment of interest or Additional Amounts, if any, on any Security when the same becomes due and payable, and such default continues for a period of 30 days,

 

(b)          the Issuer, UK Holdco or any Restricted Subsidiary defaults in the payment of principal or premium, if any, of any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

 

(c)          UK Holdco or any of its Restricted Subsidiaries fails to comply with any of its agreements contained in the Securities or this Indenture (other than those referred to in (a) or (b) above) and such failure continues for 60 days after receipt of a related written Notice of Default as specified below,

 

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(d)          UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco fails to pay any Indebtedness (other than Indebtedness owing to UK Holdco or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $75.0 million or its foreign currency equivalent,

 

(e)          UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco pursuant to or within the meaning of any Bankruptcy Law:

 

(i)          commences a voluntary case;

 

(ii)         consents to the entry of an order for relief against it in an involuntary case;

 

(iii)        consents to the appointment of a Custodian of it or for any substantial part of its property; or

 

(iv)        makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,

 

(f)          a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)          is for relief against UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco in an involuntary case;

 

(ii)         appoints a Custodian of UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco or for any substantial part of its property; or

 

(iii)         orders the winding up or liquidation of UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco;

 

or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 90 days,

 

(g)          UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco fails to pay final and non-appealable judgments aggregating in excess of $75.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof and, in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed, or

 

(h)          the Guarantee of UK Holdco or a Significant Subsidiary of UK Holdco ceases to be in full force and effect in any material respect (except as contemplated by the terms thereof) or any such Guarantor denies or disaffirms its obligations under this Indenture or any Guarantee and such Default continues for 21 days after written notice of such Default shall have been given to the Trustee.

 

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is affected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

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The term “ Bankruptcy Law ” means any law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law, including, without limitation (i) bankruptcy laws of Luxembourg, (ii) Title 11, United States Code (as amended from time to time), (iii) the Insolvency Act of 1986 of the United Kingdom (as amended from time to time), or (iv) any similar law for the relief of debtors in any other jurisdiction applicable to UK Holdco, the Issuer or any Significant Subsidiary of UK Holdco. The term “ Custodian ” means any receiver, trustee, assignee, liquidator, custodian, administrator, administrative receiver, manager, or similar official under any Bankruptcy Law.

 

A Default under clause (c) above shall not constitute an Event of Default until the Trustee notifies the Issuer in writing or the Holders of at least 30% of the aggregate principal amount of the outstanding Securities notify the Issuer and the Trustee in writing of the Default and the Issuer does not cure such Default within the time specified in clause (c) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “ Notice of Default .” The Issuer shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

SECTION 6.02.          Acceleration . If an Event of Default (other than an Event of Default specified in Section 6.01(e) or (f) with respect to the Issuer) occurs and is continuing, the Trustee by written notice to the Issuer or the Holders of at least 30% of the aggregate principal amount of outstanding Securities by written notice to the Issuer and the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest and the Additional Amounts, if any, on all the Securities to be due and payable. Upon such a declaration, such principal and interest and Additional Amounts, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(e) or (f) with respect to the Issuer occurs, the principal of, premium, if any, and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

In the event of any Event of Default specified in Section 6.01(d), such Event of Default and all consequences thereof (including, without limitation, the declaration of acceleration of the Securities) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, default, notice or action (as the case may be) giving rise to such Event of Default or (z) the default or acceleration that is the basis for such Event of Default has been cured or waived, it being understood that in no event shall an acceleration of the principal amount of the Securities as described above be annulled, waived or rescinded upon the happening of any such events.

 

SECTION 6.03.          Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

 

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The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

 

SECTION 6.04.          Waiver of Past Defaults . Provided the Securities are not then due and payable by reason of a declaration of acceleration, the Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences except (a) a Default or Event of Default in the payment of the principal of or interest on a Security or (b) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default is waived, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

 

SECTION 6.05.          Control by Majority . The Holders of a majority in principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any action or forbearance is unduly prejudicial to such Holders) or that would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification and/or security (which may include pre-funding) satisfactory to it against all losses, liabilities and expenses caused by taking or not taking such action.

 

SECTION 6.06.          Limitation on Suits .

 

(a)          Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Securities unless:

 

(i)          the Holder gives to the Trustee written notice stating that an Event of Default is continuing;

 

(ii)         the Holders of at least 30% of the aggregate principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy;

 

(iii)        such Holder or Holders offer to the Trustee security and/or indemnity (which may include pre-funding) satisfactory to it against any loss, liability or expense;

 

(iv)        the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(v)         the Holders of a majority in principal amount of the outstanding Securities do not give the Trustee a direction inconsistent with the request during such 60-day period.

 

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(b)          A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee has no affirmative duty to ascertain whether or not such actions are unduly prejudicial to such Holders).

 

SECTION 6.07.          Rights of the Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed or provided for in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder; provided that a Holder shall not have the right to institute any such suit for the enforcement of payment if and to the extent that the institution or prosecution thereof or the entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of this Indenture upon any property subject to such Lien.

 

SECTION 6.08.          Collection Suit by Trustee . If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Securities for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Securities) and the amounts provided for in Section 7.06.

 

SECTION 6.09.          Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents and take such action as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems reasonably necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.06.

 

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

SECTION 6.10.          Priorities . If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

 

FIRST: to the Trustee for amounts due to it under this Indenture;

 

SECOND: to Holders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

 

THIRD: to the Issuer or, to the extent the Trustee collects any amount for any Guarantor, to such Guarantor.

 

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The Trustee, upon prior written notice to the Issuer and the Guarantors, may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall send to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid.

 

SECTION 6.11.          Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities then outstanding.

 

SECTION 6.12.          Waiver of Stay or Extension Laws . Neither the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

 

SECTION 6.13.          Restoration of Rights and Remedies .

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, any Guarantor, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

SECTION 6.14.          Rights and Remedies Cumulative .

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.08 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 6.15.          Delay or Omission Not Waiver .

 

No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

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ARTICLE 7

 

TRUSTEE

 

SECTION 7.01.          Duties of Trustee .

 

(a)          If an Event of Default has occurred and is continuing and a Trust Officer of the Trustee is aware, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)          Except during the continuance of an Event of Default:

 

(i)          the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)         in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the form requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)          The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)          this Section 7.01(c) does not limit the effect of Section 7.01(b);

 

(ii)         the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(iii)        the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and

 

(iv)        no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur liability in the performance of any of its duties hereunder or to take or omit to take any action under this Indenture or take any action at the request or direction of Holders if it has grounds for believing that repayment of such funds is not assured to it or it does not receive an agreement in writing from the Holders for indemnity and/or security and/or prefunding satisfactory to it in its discretion against any loss, liability or expense which might be incurred by it in compliance with such request or direction nor shall the Trustee be required to do anything which is illegal or contrary to applicable laws or this Indenture. The Trustee will not be liable to the Holders if prevented or delayed in performing any of its obligations or discretionary functions under this Indenture by reason of any present or future law applicable to it, by any governmental or regulatory authority or by any circumstances beyond its control.

 

(d)          The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.

 

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(e)          Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(f)          Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01.

 

(g)          The Trustee shall not be deemed to have notice or any knowledge of any matter (including without limitation Defaults or Events of Default) unless a Trust Officer assigned to and working in the Trustee’s corporate trust and agency department has actual knowledge thereof or unless written notice thereof is received by the Trustee in accordance with the terms of this Indenture and such notice clearly references the Securities, the Issuer or this Indenture.

 

(h)          The Trustee will (save as expressly otherwise provided herein) have absolute and uncontrolled discretion as to the exercise or non-exercise of its functions and will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from their exercise or non-exercise but, whenever the Trustee is under the provisions of this Indenture or the Securities bound to act at the request or direction of the Holders, the Trustee shall nevertheless not be so bound unless first indemnified and/or secured and/or prefunded to its satisfaction against all actions, proceedings, claims and demands to which it may render itself liable and all costs, charges, damages, expenses and liabilities which it may incur by so doing.

 

SECTION 7.02.          Rights of Trustee .

 

(a)          The Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion, based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction or, to the extent applicable, the State of New York. Furthermore, the Trustee may also refrain from taking such action if such action would otherwise render it liable to any person in that jurisdiction, the State of New York or if, in its opinion based upon such legal advice, it would not have the power to take such action in that jurisdiction by virtue of any applicable law in that jurisdiction, in the State of New York or if it is determined by any court or other competent authority in that jurisdiction, in the State of New York that it does not have such power.

 

(b)          The Trustee may conclusively rely on and be protected in acting or refraining to act based on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

 

(c)          Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

 

(d)          The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(e)          The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers; provided , however , that the Trustee’s conduct, as applicable, does not constitute willful misconduct or gross negligence.

 

(f)          The Trustee may consult with counsel of its own selection at the expense of the Issuer and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

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(g)          The Trustee shall not be bound to make any investigation into the facts or matters stated in any Officer’s Certificate, Opinion of Counsel, resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document, but the Trustee, in its discretion, may each make such further inquiry or investigation into such facts or matters as it may see fit.

 

(h)          The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee indemnity and/or security (which may include pre-funding) satisfactory to the Trustee against all losses, liabilities and expenses which might be Incurred by it in compliance with such request or direction.

 

(i)          In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders, each representing less than the requisite majority in aggregate principal amount of the Securities then outstanding, pursuant to the provisions of this Indenture, the Trustee, in its sole discretion, may determine what action, if any, shall be taken and shall be held harmless and shall not incur any liability for its failure to act until such inconsistency or conflict is, in its opinion, resolved, and absent willful misconduct or negligence, the Trustee shall not be liable for acting in good faith on instructions believed by them to be genuine and from the proper party.

 

(j)          The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under this Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, of any interest in any Securities, but may at its sole discretion, choose to do so.

 

(k)          The permissive rights of the Trustee to take the actions permitted by this Indenture will not be construed as an obligation or duty to do so.

 

(l)          Except with respect to Section 4.01 hereof, and provided it or an affiliate of it is acting as a Paying Agent, the Trustee shall have no duty to inquire as to the performance of UK Holdco or the Issuer with respect to the covenants contained in Article 4 hereof. The Trustee may assume without inquiry in the absence of written notice to the contrary that UK Holdco and the Issuer are duly complying with its obligations contained in this Indenture required to be performed and observed by it, and that no Default or Event of Default or other event which would require repayment of the Securities has occurred.

 

(m)          The Trustee may, in the execution and exercise of all or any of the trusts, powers, authorities and discretions vested in it by this Indenture, delegate to any person or persons all or any of the trusts, powers, authorities and discretions vested in it by this Indenture and any such delegation may be made upon such terms and conditions and subject to such regulations as the Trustee may think fit. The Trustee shall not be under any obligation to supervise the activities of such delegates and shall not be responsible for the misconduct or negligence of such delegates, or for any costs, expenses, losses or liabilities of, or caused by, such delegates, provided that such delegation of such delegates has been made with due care.

 

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(n)          The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified and/or secured (including by way of pre-funding) are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, any custodian and any other Person employed to act hereunder. The Trustee shall not be liable for acting in good faith or instructions believed to be genuine and from the proper party.

 

(o)          In no event shall the Trustee, Paying Agent or Registrar or in any other capacity hereunder, be liable under or in connection with this Indenture for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Trustee, Paying Agent or Registrar or in any other capacity hereunder has been advised of the possibility thereof and regardless of the form of action in which such damages are sought.

 

(p)          The Trustee may request that the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

 

(q)          The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

 

SECTION 7.03.          Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.09 and 7.11.

 

SECTION 7.04.          Trustee’s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Guarantee or the Securities, it shall not be accountable for the Issuer’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Issuer or any Guarantor in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 12.02 from the Issuer, any Guarantor or any Holder, and such notice references the Securities and this Indenture.

 

SECTION 7.05.          Notice of Defaults . If a Default or Event of Default occurs and is continuing and if a Trust Officer has actual knowledge thereof, the Trustee shall mail by first-class mail to each Holder at the address set forth in the register, notice of the Default or Event of Default within 90 days after it is actually known to a Trust Officer. Except in the case of a Default or Event of Default in payment of principal of, premium (if any), interest on any Securities (including payments pursuant to the optional redemption or required repurchase provisions of such Securities), the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of Holders.

 

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SECTION 7.06.          Compensation and Indemnity . The Issuer, or, upon the failure of the Issuer to pay, each Guarantor (if any), jointly and severally (subject to the conditions set forth in Article 11), shall pay to the Trustee from time to time compensation for its services as agreed to in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Issuer and each Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses) Incurred by or in connection with the acceptance or administration of this Indenture and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Guarantee against the Issuer or a Guarantor (including this Section 7.06) and defending itself against or investigating any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person). The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided , however , that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the Trustee shall provide reasonable cooperation at the Issuer’s expense in the defense. The Trustee may have separate counsel and the Issuer and the Guarantors, as applicable, shall pay the reasonable fees and expenses of such counsel; provided , however , that the Issuer shall not be required to pay such fees and expenses if it assumes the Trustee’s defense and, in the Trustee’s reasonable judgment, there is no conflict of interest between the Issuer or the Guarantors, as applicable, and the Trustee in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such party’s own willful misconduct, gross negligence or fraud.

 

To secure the Issuer’s and the Guarantors’ payment obligations in this Section 7.06, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Securities.

 

The Issuer’s and the Guarantors’ payment obligations pursuant to this Section 7.06 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(e) or (f) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

 

For the avoidance of doubt, the rights, privileges, protections, immunities and benefits given to the Trustee in this Section 7.06, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and by each agent, custodian and other Person employed to act hereunder.

 

SECTION 7.07.          Replacement of Trustee .

 

(a)          The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer may remove the Trustee if:

 

(i)          the Trustee fails to comply with Section 7.09;

 

(ii)         the Trustee is adjudged bankrupt or insolvent;

 

(iii)        a receiver or other public officer takes charge of the Trustee or its property; or

 

(iv)        the Trustee otherwise becomes incapable of acting.

 

If the Trustee has or shall acquire a conflicting interest within the meaning of the TIA, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the TIA (as if the TIA applied to this Indenture) and this Indenture.

 

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(b)          If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall appoint a successor Trustee within 30 days of receiving notice of the resignation or removal of the Trustee.

 

(c)          A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee (provided all sums owing to the Trustee hereunder are paid), subject to the Lien provided for in Section 7.06.

 

(d)          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)          If the Trustee fails to comply with Section 7.09, any Holder who has been a bona fide holder of a Security for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)          Notwithstanding the replacement of the Trustee pursuant to this Section 7.07, the Issuer’s obligations under Section 7.06 shall continue for the benefit of the retiring Trustee. In no event shall the retiring Trustee be held responsible for the actions or inactions of the successor trustee.

 

SECTION 7.08.          Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

 

SECTION 7.09.          Eligibility; Disqualification . The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA (as if the TIA applied to this Indenture). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA (as if the TIA applied to this Indenture).

 

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SECTION 7.10.          Resignation of Agents .

 

(a)           Any Agent may resign its appointment hereunder at any time without the need to give any reason and without being responsible for any costs associated therewith by giving notice to the Issuer and the Trustee (and in the case of resignation of the Paying Agent the Paying Agent giving 30 days’ written notice) (waivable by the Issuer and the Trustee); provided that in the case of resignation of the Paying Agent no such resignation shall take effect until a new Paying Agent shall have been appointed by the Issuer to exercise the powers and undertake the duties hereby conferred and imposed upon the Paying Agent; provided, further , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.07. Following receipt of a notice of resignation from any Agent, the Issuer shall promptly give notice thereof to the Holders in accordance with Section 12.02.

 

(b)          If any Agent gives notice of its resignation in accordance with this Section 7.10 and a replacement Agent is required and by the tenth day before the expiration of such notice such replacement has not been duly appointed, such Agent may itself appoint as its replacement any reputable and experienced financial institution or may petition a court of competent jurisdiction, with reasonable costs and expenses by the Agent in relation to such petition to be paid by the Issuer. Immediately following such appointment, the Issuer shall give notice of such appointment to the Trustee, the remaining Agents and the Holders whereupon the Issuer, the Trustee, the remaining Agents and the replacement Agent shall acquire and become subject to the same rights and obligations between themselves as if they had entered into an agreement in the form mutatis mutandis of this Indenture.

 

Upon its resignation becoming effective the Paying Agent shall forthwith transfer all moneys held by it hereunder, if any, to the successor Paying Agent or, if none, the Trustee or to the Trustee’s order, but shall have no other duties or responsibilities hereunder, and shall be entitled to the payment by the Issuer of its remuneration for the services previously rendered hereunder and to the reimbursement of all reasonable expenses (including legal fees) incurred in connection therewith.

 

SECTION 7.11.          Preferential Collection of Claims Against Issuer . The Trustee shall comply with Section 311(a) of the TIA as if the TIA applied to this Indenture, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA as if the TIA applied to this Indenture to the extent indicated.

 

ARTICLE 8

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.          Discharge of Liability on Securities; Defeasance . This Indenture shall be discharged and shall cease to be of further effect as to all outstanding Securities (except for certain rights of the Trustee and the Issuer’s obligations with respect thereto) when:

 

(a)          either (i) all the Securities theretofore authenticated and delivered (other than Securities pursuant to Section 2.08 which have been replaced or paid and Securities for whose payment money has theretofore been deposited in trust) have been delivered to the Trustee for cancellation or (ii) all of the Securities (a) have become due and payable, (b) will become due and payable within one year or (c) have been or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee (or an entity designated or appointed (as agent) by it for this purpose) money or U.S. Government Obligations sufficient, in an opinion of an Independent Financial Advisor, which shall be delivered to the Trustee, to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on such Securities to the date of maturity or redemption together with irrevocable instructions from the Issuer directing the Trustee to apply or cause to be applied such funds to the payment thereof at maturity or redemption, as the case may be;

 

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(b)          the Issuer and/or the Guarantors have paid all other sums payable under this Indenture; and

 

(c)          the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which may be subject to customary assumptions and exclusions) each stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with;

 

provided that any such counsel may rely on such Officer’s Certificate as to matters of fact (including as to compliance with the foregoing clauses (a) and (b)).

 

Subject to Sections 8.01(c) and 8.02, the Issuer at any time may cure all then existing Events of Default and terminate (i) all of its obligations and all obligations of the Guarantors under the Securities and this Indenture (with respect to such Securities) (“ legal defeasance option ”) or (ii) its obligations under Article 4 (other than Sections 4.01 and 4.12) and the operation of Section 5.01 and Sections 6.01(c) (with respect to any Default under Article 4 (other than Sections 4.01 and 4.12)), 6.01(d), 6.01(e) (only with respect to Significant Subsidiaries of UK Holdco (other than the Issuer)), 6.01(f) (only with respect to Significant Subsidiaries of UK Holdco (other than the Issuer)), 6.01(g) and 6.01(h) (“ covenant defeasance option ”). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. In the event that the Issuer terminates all of its obligations under the Securities and this Indenture (with respect to such Securities) by exercising its legal defeasance option or its covenant defeasance option, the obligations of each Guarantor under its Guarantee of such Securities shall be terminated simultaneously with the termination of such obligations.

 

If the Issuer exercises its legal defeasance option, payment of the Securities so defeased may not be accelerated because of an Event of Default. If the Issuer exercises its covenant defeasance option, payment of the Securities so defeased may not be accelerated because of an Event of Default specified in Section 6.01(c) (with respect to any Default by UK Holdco or any of its Restricted Subsidiaries with any of its obligations under Article 4 other than Sections 4.01 and 4.12), 6.01(d), 6.01(e) (only with respect to Significant Subsidiaries of UK Holdco (other than the Issuer)), 6.01(f) (only with respect to Significant Subsidiaries of UK Holdco (other than the Issuer)), 6.01(g) or 6.01(h).

 

Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer has terminated.

 

(d)          Notwithstanding clause (a) above, the Issuer’s obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.06, 7.07 and in this Article 8 shall survive until the Securities have been paid in full. Thereafter, the Issuer’s obligations in Sections 7.06, 8.05 and 8.06 shall survive such satisfaction and discharge.

 

SECTION 8.02.          Conditions to Defeasance .

 

(a)          The Issuer may exercise its legal defeasance option or its covenant defeasance option only if:

 

(i)          the Issuer irrevocably deposits in trust with the Trustee (or an entity designated or appointed (as agent) by it for this purpose) cash in U.S. Dollars or U.S. Government Obligations or a combination thereof sufficient, in the opinion of an Independent Financial Advisor, which shall be delivered to the Trustee for the payment of principal, premium (if any) and interest on the Securities to redemption or maturity, as the case may be;

 

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(ii)         the Issuer delivers to the Trustee an Officer’s Certificate stating that the deposit was not made with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Guarantors or others;

 

(iii)        the deposit does not constitute a default under any other material agreement or contract relating to Indebtedness binding on the Issuer (other than a default resulting from borrowing funds to be applied to make the deposit required to effect such legal defeasance or covenant defeasance and any similar and simultaneous deposit relating to such other Indebtedness and, in each case, the granting of Liens in connection therewith);

 

(iv)        in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) to the effect that the beneficial owners of the Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred, provided that such Opinion of Counsel must be based on a ruling received from, or published by, the Internal Revenue Service or a change in applicable U.S. federal income tax law since the date of this Indenture;

 

(v)         in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) to the effect that the beneficial owners of the Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and

 

(vi)        the Issuer delivers to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent to the defeasance and discharge of the Securities to be so defeased and discharged as contemplated by this Article 8 have been complied with.

 

Notwithstanding the foregoing, the Opinion of Counsel required by Section 8.02(a)(iv) above need not be delivered if all Securities not theretofore delivered to the Trustee for cancellation (x) are due and payable within one year or (y) have been or will become due and payable within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.

 

(b)          Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of such Securities at a future date in accordance with Article 3.

 

SECTION 8.03.          Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities so discharged or defeased.

 

SECTION 8.04.          Repayment to Issuer . Each of the Trustee and each Paying Agent shall promptly turn over to the Issuer upon request any money or U.S. Government Obligations held by it as provided in this Article 8 which, in the written opinion of an Independent Financial Advisor delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article 8.

 

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Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and the Paying Agent shall have no further liability with respect to such monies.

 

SECTION 8.05.          Indemnity for U.S. Government Obligations . The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

SECTION 8.06.          Reinstatement . If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s obligations under this Indenture and the Securities so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided , however , that, if the Issuer has made any payment of principal of or interest on, any such Securities because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND WAIVER

 

SECTION 9.01.          Without Consent of the Holders . Notwithstanding Section 9.02 hereof, without the consent of any Holder, the Issuer and the Trustee may amend this Indenture, the Securities or the Guarantees to:

 

(a)          cure any ambiguity, omission, mistake, defect or inconsistency, as set forth in an Officer’s Certificate provided to the Trustee;

 

(b)          provide for the assumption by a Successor Company of the obligations of the Issuer under this Indenture and the Securities;

 

(c)          provide for the assumption by a Successor Parent Guarantor or a Successor Guarantor of the obligations of UK Holdco or a Subsidiary Guarantor, as applicable, under this Indenture, the Securities and the Guarantees;

 

(d)          add to the covenants of UK Holdco and its Restricted Subsidiaries for the benefit of the Holders or the Trustee or surrender any right or power conferred upon UK Holdco or any Restricted Subsidiary;

 

(e)          make any change that does not adversely affect the rights of any Holder in any material respect or that would provide any additional rights or benefits to the Holders;

 

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(f)          provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(g)          provide for the issuance of exchange notes or private exchange notes;

 

(h)          comply with Article 5 hereof;

 

(i)          (1) add or release a Guarantee with respect to the Securities in accordance with the terms of this Indenture and in compliance with the provisions described under Article 11 or (2) add one or more co-issuers of the Securities to the extent it does not result in adverse Tax consequences to the Holders;

 

(j)          provide for the issuance of Additional Securities permitted to be Incurred under this Indenture;

 

(k)          conform the text of this Indenture, the Securities or the Guarantees to any provision under the heading “Description of the Notes” in the Offering Memorandum to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture, the Securities or the Guarantees, as certified by the Issuer in an Officer’s Certificate provided to the Trustee stating that any text to be so conformed constitutes an unintended conflict with the corresponding provision in the “Description of the Notes” in the Offering Memorandum;

 

(l)          evidence and provide for the acceptance of appointment by a successor trustee; provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of this Indenture, the Securities and the Guarantees;

 

(m)          provide for the succession of any parties to this Indenture, the Securities and the Guarantees (and other amendments that are administrative or ministerial in nature);

 

(n)          provide for a reduction in the minimum denominations of the Securities;

 

(o)          make any amendment to the provisions of this Indenture relating to the transfer and legending of the Securities as permitted hereunder, including, without limitation, to facilitate the issuance and administration of the Securities; provided that compliance with this Indenture as so amended may not result in the Securities being transferred in violation of the Securities Act or any applicable securities laws;

 

(p)          provide for the assumption by one or more successors of the obligations of any of the Guarantors under this Indenture, the Securities and the Guarantees;

 

(q)          comply with the rules of any applicable securities depositary; or

 

(r)          comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA.

 

Upon the request of the Issuer accompanied by a resolution of the Board of Directors of the Issuer authorizing the execution of any supplemental indenture entered into to effect any such amendment, supplement or waiver, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Issuer in the execution of such supplemental indenture.

 

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The provisions relating to meetings of bondholders contained in articles 86 to 94-8 of the Luxembourg Act dated August 10, 1915 on commercial companies, as amended, shall not apply in respect of the Securities. No Holder may initiate proceedings against the Issuer based on article 98 of the Luxembourg Companies Act 1915.

 

SECTION 9.02.          With Consent of the Holders . Except as otherwise provided in Section 9.01 or this Section 9.02, the Issuer and the Trustee may amend this Indenture, the Securities or the Guarantees, with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for the Securities) and any existing or past default or compliance with any provisions of such documents may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with the purchase of, or tender offer or exchange offer for, Securities). However, without the consent of each Holder of an outstanding Security affected, no amendment may (with respect to any Securities held by a non-consenting Holder):

 

(a)          reduce the percentage of the aggregate principal amount of Securities whose Holders must consent to an amendment, supplement or waiver;

 

(b)          reduce the rate of or extend the time for payment of interest or Additional Amounts, if any, on any Security;

 

(c)          reduce the principal of or change the Stated Maturity of any Security;

 

(d)          reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed in accordance with Article 3;

 

(e)          make any Security payable in money other than that stated in such Security;

 

(f)          impair the right of any Holder to receive payment of principal of, premium, if any, and interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

 

(g)          make any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02;

 

(h)          expressly subordinate the Securities or any Guarantee related thereto or otherwise modify the ranking thereof to any other Indebtedness of the Issuer or any Guarantor;

 

(i)          modify the Guarantees in any manner adverse to the Holders other than as contemplated in Sections 11.02(b) and (c) hereof; or

 

(j)          make any change in the provision of this Indenture described under Section 2.16 that adversely affects the right of any Holder of such Securities in any material respect or amends the terms of such Securities in a way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation to withhold or deduct Taxes so described thereunder unless the Issuer and the Guarantors agree to pay Additional Amounts, if any, in respect thereof.

 

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It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, waiver or consent, but it shall be sufficient if such consent approves the substance thereof. For the avoidance of doubt, no amendment to, or deletion of any of the covenants described under Article 4 or Section 5.01, shall be deemed to impair or affect any rights of Holders to receive payment of principal of, or premium, if any, or interest on, the Securities.

 

Upon the request of the Issuer accompanied by a resolution of the Board of Directors of the Issuer authorizing the execution of any supplemental indenture entered into to effect any such amendment, supplement or waiver, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee, subject to its rights in Section 9.06, shall join with the Issuer in the execution of such supplemental indenture.

 

SECTION 9.03.         [ Reserved ].

 

SECTION 9.04.          Revocation and Effect of Consents and Waivers .

 

(a)          A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date on which the consent or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of consents by the Holders of the requisite principal amount of Securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any supplemental indenture hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee.

 

(b)          The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding Section 9.04(a), those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.

 

SECTION 9.05.          Notation on or Exchange of Securities . If an amendment, supplement or waiver changes the terms of a Security, the Issuer may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Issuer so determines, the Issuer in exchange for the Security shall issue and upon receipt of an Authentication Order the Trustee (or its Authenticating Agent) shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment, supplement or waiver.

 

SECTION 9.06.          Trustee to Sign Amendments . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officer’s Certificate stating that such amendment, supplement or waiver is authorized or permitted by this Indenture.

 

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SECTION 9.07.          Additional Voting Terms . All Securities issued under this Indenture shall vote and consent together on all matters (as to which any of such Securities may vote) as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.

 

ARTICLE 10

 

[Reserved]

 

ARTICLE 11

 

GUARANTEES

 

SECTION 11.01.          Guarantees .

 

(a)          Subject to the Guaranty and Security Principles, (i) on the Closing Date, the Closing Date Guarantors and (ii) within 90 days following the Closing Date and pursuant to Section 4.10, each of UK Holdco’s other Restricted Subsidiaries, in each case, that is an obligor under the Credit Agreement will jointly and severally irrevocably and unconditionally guarantee on a senior unsecured basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuer under this Indenture and the Securities, whether for payment of principal of, premium, if any, or interest on the Securities, fees, expenses, indemnification or otherwise (all such obligations guaranteed by such Guarantors being herein called the “ Guaranteed Obligations ”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 11 notwithstanding any extension or renewal of any Guaranteed Obligation.

 

(b)          Each Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Securities or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person under this Indenture, the Securities or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Securities or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (iv) the release of any security, if any, held by any Holder or the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or Trustee to exercise any right or remedy against any Other Guarantor (as defined below) of the Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor, except as provided in Section 11.02(d).

 

(c)          Except as otherwise provided herein, each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantor’s obligations would be less than the full amount claimed. Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuer first be used and depleted as payment of the Issuer’s or such Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Guarantor.

 

(d)          Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

 

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(e)          Except as expressly set forth in Sections 8.01 and 11.02, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.

 

(f)          Except as set forth in Sections 8.01 and 11.02, each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Except as set forth in Sections 8.01 and 11.02, each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise.

 

(g)          In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuer to the Holders and the Trustee in respect of the Guaranteed Obligations.

 

(h)          Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.01.

 

(i)          Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

 

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(j)          Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

(k)          Any Guarantee given by any direct or indirect parent of UK Holdco may be released and discharged from all obligations under this Article 11 at any time upon written notice to the Trustee from such direct or indirect parent of UK Holdco.

 

SECTION 11.02.          Limitation on Guarantor Liability .

 

(a)          Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Guarantor without rendering this Indenture or the Guarantee, as each relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

 

(b)          In furtherance of the foregoing and to the extent applicable, a Guarantor’s liability in respect of its Guarantee shall be limited to the extent set forth below:

 

(i)           Limitations in Luxembourg .

 

(1)         Notwithstanding anything to the contrary contained in this Indenture or the Securities, the aggregate obligations of any Guarantor whose registered office/place of central administration is in Luxembourg (a “ Luxembourg Guarantor ”) in respect of the Issuer or any Restricted Subsidiary which is not a direct or indirect subsidiary of such Luxembourg Guarantor shall be limited at any time to an aggregate amount not exceeding 90% of the greater of:

 

(A)         an amount equal to the sum of the Luxembourg Guarantor’s net assets ( Capitaux Propres , as referred to in annex I to the grand-ducal regulation dated December 18, 2015 defining the form and content of the presentation of balance sheet and profit and loss account, and enforcing the Luxembourg law dated 19 December 2002 on the register of commerce and companies, accounting and companies annual accounts, as amended) and its subordinated debt ( dettes subordonnées ), as reflected in the financial information of the Luxembourg Guarantor as at the date of this Indenture or (as applicable) as at the date of its accession as a Guarantor, including, without limitation, its most recently and duly approved financial statements ( comptes annuels ) and any (unaudited) interim financial statements signed by its board of managers ( gérants ); and

 

(B)         an amount equal to the sum of the Luxembourg Guarantor’s net assets ( Capitaux Propres , as referred to in annex I to the grand-ducal regulation dated December 18, 2015 defining the form and content of the presentation of balance sheet and profit and loss account, and enforcing the Luxembourg law dated 19 December 2002 on the register of commerce and companies, accounting and companies annual accounts, as amended) and its subordinated debt ( dettes subordonnées ), as reflected in the financial information of the Luxembourg Guarantor as at the date the Guarantee is called, including, without limitation, its most recently and duly approved financial statements ( comptes annuels ) and any (unaudited) interim financial statements signed by its board of managers ( gérants ).

 

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(2)         Any Guarantee by any Luxembourg Guarantor under this Section 11.02 will not extend to include any obligations or liabilities if such inclusion would constitute a breach of the financial assistance prohibitions contained at Article 49-6 (where applicable) of the Luxembourg act on commercial companies of 10 August 1915, as amended.

 

(3)         Notwithstanding the foregoing, any Guarantee by any Luxembourg Guarantor under this Section 11.02 shall be subject to such other limitations under Luxembourg laws as are described in the supplemental indenture.

 

(ii)          Limitations in Japan . Notwithstanding anything to the contrary contained in this Indenture, any Guarantee by any Guarantor which is incorporated under the laws of Japan shall not be effective to the extent that it would result in violating Article 135 and 155 through 165 or any other provisions of the Companies Act of Japan (Law No. 86 of 2005), as amended.

 

(iii)         Limitations in the United Kingdom. Notwithstanding anything to the contrary contained in this Indenture or the Securities, this Guarantee does not apply to any liability to the extent that it would result in such Guarantee constituting unlawful financial assistance within the meaning of sections 678 or 679 of the United Kingdom Companies Act 2006, as amended.

 

(iv)         Limitations Applicable to Certain Other Guarantors . Each Guarantor that as of the date of this Indenture or thereafter is incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than those jurisdictions set forth in clauses (i) through (iii) above (an “ Other Guarantor ”), and by its acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of all such parties that the Guarantee of an Other Guarantor does not constitute a fraudulent transfer or conveyance for purposes of, or otherwise violate, applicable law. To effectuate the foregoing intention, each Holder and each Other Guarantor hereby irrevocably agrees that the obligations of an Other Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Other Guarantor result in the obligations of such Other Guarantor not constituting such a fraudulent transfer or conveyance or otherwise violating applicable law and be subject to such other limitations under applicable law as are described in the supplemental indenture.

 

(c)          Notwithstanding anything in this Section 11.02 to the contrary, if following the date of this Indenture:

 

(i)          there shall be any change in the laws of any of the jurisdictions set forth in clauses (i) through (iv) of Section 11.02(b);

 

(ii)         there shall be any change in the laws under which any Other Guarantor is incorporated, organized or formed, as the case may be; or

 

(iii)        any Person shall be required to execute a Guarantee pursuant to Section 4.10 or Section 11.01 otherwise hereunder and such Person is incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than those in which entities are contemplated to become Guarantors as of the date hereof, including those jurisdictions addressed in clauses (i) and (ii) of Section 11.02 and other than any jurisdiction in which a then existing Other Guarantor is incorporated, organized or formed, as the case may be, and the Issuer shall reasonably determine that the provisions of Section 11.02(b)(iii) hereof with respect to any Other Guarantor shall not adequately address the limitations on such Guarantee imposed by applicable law of the jurisdiction of incorporation, organization or formation, as the case may be, of such Person;

 

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(iv)        then upon the delivery of an Officer’s Certificate, the Issuer shall be entitled to amend such clause or add such additional provisions to such clause, as the case may be, to the extent necessary so that the Guarantee of a Guarantor does not violate applicable law.

 

(d)          A Guarantee as to any Guarantor shall automatically terminate and be of no further force or effect and such Guarantor shall be deemed to be unconditionally released and discharged from all obligations under this Article 11 upon:

 

(i)          except in the case of UK Holdco, the sale, disposition or other transfer (including through merger, dissolution or consolidation) of the Capital Stock of such Guarantor to a Person other than UK Holdco or a Restricted Subsidiary if after such sale, disposition or other transfer, such Guarantor is no longer a Restricted Subsidiary, or the sale, disposition or other transfer of all or substantially all the assets of such Guarantor, in each case, if such sale, disposition or other transfer is made in compliance with this Indenture,

 

(ii)         the Issuer designating such Guarantor (other than UK Holdco) to be (i) an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of “Unrestricted Subsidiary” or (ii) an Excluded Subsidiary in accordance with the definition of “Excluded Subsidiary”(unless such subsidiary continues to provide a guarantee under the Credit Agreement),

 

(iii)        in the case of any Restricted Subsidiary that is required to guarantee the Securities pursuant to Section 4.10, the release or discharge of the obligation by such Restricted Subsidiary of Indebtedness of UK Holdco or any Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock, in each case, which resulted in the obligation to guarantee the Securities, except if a release or discharge is by or as a result of payment in connection with the enforcement of remedies under such other obligation and a Default or Event of Default would occur thereby,

 

(iv)        the Issuer’s exercise of its legal defeasance option or covenant defeasance option as described under Section 8.01 or if the Issuer’s obligations under this Indenture are discharged in accordance with the terms of this Indenture,

 

(v)         the merger or consolidation of such Guarantor with and into the Issuer or another Guarantor that is the surviving Person in such merger or consolidation, or upon the liquidation or dissolution of such Guarantor following the transfer of all or substantially all of its assets to the Issuer or another Guarantor,

 

(vi)        in accordance with Article 9, or

 

(vii)       except in the case of UK Holdco, upon the release or discharge of all other Guarantees by such Guarantor of Indebtedness of the Issuer or any other Guarantor.

 

SECTION 11.03.          No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 11 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 11 at law, in equity, by statute or otherwise.

 

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SECTION 11.04.          Modification . No modification, amendment or waiver of any provision of this Article 11, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.

 

SECTION 11.05.          Execution of Supplemental Indenture for Future Guarantors . Each Subsidiary and other Person which is required or elects to become a Guarantor pursuant to Section 4.10, shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary or other Person shall become a Guarantor under this Article 11 and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Officer’s Certificate stating that such supplemental indenture is authorized or permitted by this Indenture.

 

SECTION 11.06.          Non-Impairment . The failure to endorse a Guarantee on any Security shall not affect or impair the validity thereof.

 

ARTICLE 12

 

MISCELLANEOUS

 

SECTION 12.01.         [ Reserved ].

 

SECTION 12.02.          Notices .

 

(a)          Any notice or communication required or permitted hereunder shall be in writing in English and delivered in person, via facsimile or mailed by first-class mail or electronic mail addressed as follows:

 

If to the Issuer or a Guarantor:

 

Camelot Finance S.A.

14 rue Edward Steichen,

L-2540 Luxembourg

  Attention: Board of Directors

  Facsimile: +352-42-64-43

 

If to the Trustee, the Paying Agent or Registrar:

 

Wilmington Trust, National Association

246 Goose Lane, Suite 105

Guilford, CT 06437

United States

  Attention: Camelot Finance Notes Administrator

  Facsimile: 1-203-453-1183

 

The Issuer, the Trustee, the Paying Agent, the Registrar and Transfer Agent by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

  - 114 -  

 

 

(b)          Any notice or communication mailed to a Holder shall be mailed, first-class mail, to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

 

(c)          Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.

 

For Securities which are represented by global securities held on behalf of the Depository, Euroclear or Clearstream, any obligation the Issuer (or Agent on its behalf) may have to publish a notice shall have been met upon delivery of the relevant notices to the Depository, Euroclear or Clearstream, for communication to entitled account holders in substitution for the aforesaid mailing.

 

Notwithstanding any other provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depository for such Security (or its designee), pursuant to the customary procedures of such Depository.

 

In addition to the foregoing, the Trustee agrees to accept and act upon notice, instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s reasonable understanding of such instructions shall be deemed controlling. Subject to Section 7.02, the Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding if such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risk arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

SECTION 12.03.          Communication by the Holders with Other Holders . The Holders may communicate with other Holders with respect to their rights under this Indenture or the Securities.

 

SECTION 12.04.          Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuer to the Trustee to take any action under this Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee:

 

(a)          an Officer’s Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)          an Opinion of Counsel (which may be subject to customary assumptions and exclusions) in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with; provided, however , that no such Opinion of Counsel shall be delivered with respect to the authentication and delivery of the Original Securities on the Closing Date.

 

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SECTION 12.05.          Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:

 

(a)          a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(b)          a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)          a statement that, in the opinion of such Person, he, she or it has made such examination or investigation as is necessary to enable him, her or it to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)          a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with;

 

provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

 

SECTION 12.06.          When Securities Disregarded . In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Issuer, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Trust Officer or the Trustee actually knows are so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

 

SECTION 12.07.          Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or a meeting of the Holders. The Registrar and a Paying Agent may make reasonable rules for their functions.

 

SECTION 12.08.          Legal Holidays . If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected.

 

SECTION 12.09.          Governing Law . THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF TO THE EXTENT THE LAW OF ANOTHER JURISDICTION WOULD BE APPLIED THEREBY.

 

  - 116 -  

 

 

(a)           Consent to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon this Indenture, the Securities, the Guarantees or the transactions contemplated hereby (“ Related Proceedings ”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “ Specified Courts ”), and, subject to the final sentence of this Section 12.09(a), each party irrevocably submits to the non-exclusive jurisdiction of the Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum. The Trustee reserves the right to bring an action in any court that has jurisdiction over the trust estate, which may be a court other than the Specified Courts, when seeking a direction from a court in the administration of the trust estate. On the Closing Date, the Issuer and each Closing Date Guarantor that is not located in the United States appoint Camelot Acquisition Co. as agent for service of process. After the Closing Date, each new Guarantor not located in the United States will appoint either (i) a Guarantor organized in the United States, which initially shall be Camelot Acquisition Co. or (ii) to the extent no Guarantor is organized in the United States, the Issuer and each Guarantor shall appoint CT Corporation System (or another company providing a similar service), in each case as its agent for service of process or other legal summons for purposes of any Related Proceedings that may be instituted in any Specified Courts. The address for Camelot Acquisition Co., the initial agent for service of process, is Corporation Service Center, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, United States.

 

(b)           Waiver of Immunity . With respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with respect to any suits, actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding (a “ Related Judgment ”), each party waives any such immunity in the Specified Courts or any other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such immunity at or in respect of any such Related Proceeding or Related Judgment, including, without limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.

 

SECTION 12.10.          No Personal Liability of Directors, Officers, Employees and Stockholders . No director, officer, employee, incorporator or holder of any equity interests in the Issuer or any other direct or indirect parent or any Guarantor, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Securities, the Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting such Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

SECTION 12.11.          No Adverse Interpretation of Other Agreements . This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its respective Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 12.12.          Successors . All agreements of the Issuer and each Guarantor in this Indenture, the Securities and the Guarantees shall bind each of its successors. All agreements of the Trustee in this Indenture shall bind each of its successors.

 

SECTION 12.13.          Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

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SECTION 12.14.          Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

SECTION 12.15.          Indenture Controls . If and to the extent that any provision of the Securities limit, qualify or conflict with a provision of this Indenture, such provision of this Indenture shall control.

 

SECTION 12.16.          Severability . In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

 

SECTION 12.17.          Waiver of Jury Trial . EACH OF THE ISSUER, THE GUARANTORS, THE TRUSTEE, THE PAYING AGENT, THE REGISTRAR AND THE OTHER AGENTS HEREUNDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 12.18.          U.S.A. Patriot Act . In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, without limitation, those relating to the funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the United States (“ Applicable Law ”), the Trustee is required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Trustee. Accordingly, each of the parties agree to provide to the Trustee, upon their request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with Applicable Law.

 

SECTION 12.19.          Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility; it being understood that the Trustee and its agents shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

 

  CAMELOT FINANCE S.A.,
  as Issuer
       
  By: /s/ Konstantin Gilis
    Name: Konstantin Gilis
    Title: Class A Director
       
  By: /s/ Vincent Regnault
    Name: Vincent Regnault
    Title: Class B Director

 

Signature Page to Indenture

 

 

 

  

  CAMELOT UK BIDCO LIMITED,
  as Guarantor
       
  By: /s/ David Hirsch
    Name: David Hirsch
    Title: Director

 

Signature Page to Indenture

 

 

 

 

  CAMELOT UK HOLDCO 2 LIMITED,
  as Guarantor
       
  By: /s/ David Hirsch
    Name: David Hirsch
    Title: Director

 

Signature Page to Indenture

 

 

 

 

  CAMELOT UK EMPLOYEE COMPANY LIMITED,
  as Guarantor
       
  By: /s/ David Hirsch
    Name: David Hirsch
    Title: Director

 

Signature Page to Indenture

 

 

 

 

  Camelot U.S. Acquisition 1 Co.
  Camelot U.S. Acquisition 2 Co.
  Camelot U.S. Acquisition 3 Co.
  Camelot U.S. Acquisition 4 Co.
  Camelot U.S. Acquisition 5 Co.
  Camelot U.S. Acquisition 6 Co.
  Camelot U.S. Acquisition 7 Co.
  Camelot U.S. Acquisition 8 Co.
  Camelot U.S. Acquisition 9 Co.
  Camelot U.S. Acquisition 10 Co.
  Camelot U.S. Acquisition 11 Co.
  Camelot U.S. Acquisition 12 Co.
  Camelot U.S. Acquisition 13 Co.,
  as Guarantor
       
  By: /s/ Konstantin Gilis
    Name: Konstantin Gilis
    Title: President

 

Signature Page to Indenture

 

 

 

 

  CAMELOT U.S. ACQUISITION LLC,
  as Guarantor
       
  By: /s/ Konstantin Gilis
    Name: Konstantin Gilis
    Title: President

 

Signature Page to Indenture

 

 

 

 

  CAMELOT PROFESSIONAL K.K.,
  as Guarantor
       
  By: /s/ Konstantin Gilis
    Name: Konstantin Gilis
    Title: Representative Director

 

Signature Page to Indenture

 

 

 

 

  WILMINGTON TRUST, NATIONAL ASSOCIATION
  as Trustee
     
  By: /s/ Joseph P. O’Donnell
    Name:
    Title:

 

Signature Page to Indenture 

 

 

 

 

APPENDIX A

 

PROVISIONS RELATING TO THE SECURITIES

 

1.           Definitions .

 

1.1            Definitions .

 

For the purposes of this Appendix A the following terms shall have the meanings indicated below:

 

Clearstream ” means Clearstream Banking, société anonyme , or any successor securities clearing agency.

 

Definitive Security ” means a certificated Security (bearing the Restricted Securities Legend if the transfer of such Security is restricted by applicable law) that does not include the Global Securities Legend.

 

Depository ” means, with respect to the Securities, The Depository Trust Company, its nominees and their respective successors.

 

Euroclear ” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system, or any successor securities clearing agency.

 

Global Securities Legend ” means the legend set forth in Exhibit A of this Indenture.

 

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

Purchase Agreement ” means (a) the Purchase Agreement dated September 15, 2016, among the Issuer, the Guarantors party thereto and the representative of the several initial purchasers listed on Schedule I thereto, as supplemented by one or more Joinder Agreements and executed by the Issuer, the Guarantors party thereto and the representative of the several initial purchasers and (b) any other similar Purchase Agreement relating to Additional Securities.

 

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

 

Regulation S ” means Regulation S under the Securities Act.

 

Regulation S Securities ” means all Securities offered and sold outside the United States in reliance on Regulation S.

 

Restricted Period ,” with respect to any Securities, means the 40 day distribution compliance period as defined in Regulation S.

 

Restricted Securities Legend ” means the legend set forth in Section 2.2(f)(i) of this Appendix A .

 

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

Rule 144A ” means Rule 144A under the Securities Act.

 

  App. A- 1  

 

 

Rule 144A Securities ” means all Securities offered and sold to QIBs in reliance on Rule 144A.

 

Securities Custodian ” means the custodian with respect to a Global Security (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.

 

Transfer Restricted Definitive Securities ” means Definitive Securities and any other Securities that bear or are required to bear or are subject to the Restricted Securities Legend.

 

Transfer Restricted Global Securities ” means Global Securities bearing the Restricted Securities Legend.

 

Unrestricted Definitive Security ” means Definitive Securities and any other Securities that are not required to bear, or are not subject to, the Restricted Securities Legend.

 

Unrestricted Global Security ” means a Global Security that does not bear the Restricted Securities Legend.

 

1.2            Other Definitions .

 

Term:   Defined in Section:
     
Agent Members   2.1(b)
Global Securities   2.1(b)
Regulation S Global Securities   2.1(b)
Rule 144A Global Securities   2.1(b)

 

2.           The Securities .

 

2.1          Form and Dating; Global Securities .

 

(a)          The Securities issued on the date hereof will be (i) offered and sold by the Issuer pursuant to the Purchase Agreement and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. Additional Securities offered after the date hereof may be offered and sold by the Issuer from time to time pursuant to one or more Purchase Agreements in accordance with applicable law.

 

(b)           Global Securities . (i) Rule 144A Securities initially shall be represented by one or more Securities in fully registered, global form without interest coupons (collectively, the “ Rule 144A Global Securities ”). Regulation S Securities initially shall be represented by one or more Securities in fully registered, global form without interest coupons (collectively, the “ Regulation S Global Securities ”). The term “ Global Securities ” means, collectively, the Rule 144A Global Securities and the Regulation S Global Securities. The Global Securities shall bear the Global Securities Legend. The Global Securities initially shall (1) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (2) be delivered to the Trustee as custodian for such Depository and (3) bear the Restricted Securities Legend.

  App. A- 2  

 

 

Members of, or direct or indirect participants in, the Depository, Euroclear or Clearstream (each, “ Agent Members ”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or under the Global Securities. The Depository may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Securities for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository, Euroclear or Clearstream, as the case may be, and their respective Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security.

 

(ii)          Transfers of Global Securities shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Securities may be transferred or exchanged for Definitive Securities only in accordance with the applicable rules and procedures of the Depository, Euroclear or Clearstream, as the case may be, and the provisions of Section 2.2. In addition, a Global Security shall be exchangeable for Definitive Securities if (i) the Depository (x) notifies the Issuer that it is unwilling or unable to continue as depository for such Global Security and the Issuer thereupon fails to appoint a successor depository within 120 days or (y) has ceased to be a clearing agency registered under the Exchange Act, or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Depository requests the issuance of Definitive Securities or a beneficial owner of interests in Global Securities requests Definitive Securities in writing through the Depository. In all cases, Definitive Securities delivered in exchange for any Global Security or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested in writing by or on behalf of the Depository, in accordance with its customary procedures.

 

(iii)          In connection with the transfer of a Global Security as an entirety to beneficial owners pursuant to subsection (ii) of this Section 2.1(b), such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and upon receipt of an Authentication Order the Trustee or the Authenticating Agent shall authenticate and make available for delivery to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.

 

(iv)        Any Transfer Restricted Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Securities Legend.

 

(v)         Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in such Regulation S Global Security may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.

 

(vi)        The Holder of any Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

 

2.2           Transfer and Exchange .

 

(a)           Transfer and Exchange of Global Securities . A Global Security may not be transferred as a whole except as set forth in Section 2.1(b). Global Securities will not be exchanged by the Issuer for Definitive Securities except under the circumstances described in Section 2.1(b)(ii). Global Securities also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.10 of the Indenture. Beneficial interests in a Global Security may be transferred and exchanged as provided in Section 2.2(b) or 2.2(g) of this Appendix A .

 

  App. A- 3  

 

 

(b)           Transfer and Exchange of Beneficial Interests in Global Securities . The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Transfer Restricted Global Securities shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers and exchanges of beneficial interests in the Global Securities also shall require compliance with either Section 2.2(b)(i) or (ii) below, as applicable, as well as one or more of Section 2.2(b)(iii), (iv) or (v), as applicable:

 

(i)           Transfer of Beneficial Interests in the Same Global Security . Beneficial interests in any Transfer Restricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Security in accordance with the transfer restrictions set forth in the Restricted Securities Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Security may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). A beneficial interest in an Unrestricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).

 

(ii)          All Other Transfers and Exchanges of Beneficial Interests in Global Securities . In connection with all transfers and exchanges of beneficial interests in any Global Security that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository, in accordance with the applicable rules and procedures of the Depository, directing the Depository to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Indenture and the Securities or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security pursuant to Section 2.2(g).

 

(iii)         Transfer of Beneficial Interests to Another Transfer Restricted Global Security . A beneficial interest in a Transfer Restricted Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Security if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

 

(A)         if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Security, then the transferor must deliver a certificate in the form attached to the applicable Security; and

 

(B)         if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Security, then the transferor must deliver a certificate in the form attached to the applicable Security.

 

(iv)         Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Security for Beneficial Interests in an Unrestricted Global Security . A beneficial interest in a Transfer Restricted Global Security may be exchanged by any Holder thereof for a beneficial interest in an Unrestricted Global Security or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

 

  App. A- 4  

 

 

(A)         if the Holder of such beneficial interest in a Transfer Restricted Global Security proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security; or

 

(B)         if the Holder of such beneficial interest in a Transfer Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security,

 

and, in each such case, if the Issuer so requests or if the applicable rules and procedures of the Depository, Euroclear or Clearstream, as applicable, so require, an Opinion of Counsel to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer or exchange is effected pursuant to this Section 2.2(b)(iv) at a time when an Unrestricted Global Security has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order, the Trustee (or the Authenticating Agent) shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this Section 2.2(b)(iv).

 

(v)          Transfer and Exchange of Beneficial Interests in an Unrestricted Global Security for Beneficial Interests in a Transfer Restricted Global Security . Beneficial interests in an Unrestricted Global Security cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Security.

 

(c)           Transfer and Exchange of Beneficial Interests in Global Securities for Definitive Securities . A beneficial interest in a Global Security may not be exchanged for a Definitive Security except under the circumstances described in Section 2.1(b)(ii). A beneficial interest in a Global Security may not be transferred to a Person who takes delivery thereof in the form of a Definitive Security except under the circumstances described in Section 2.1(b)(ii).

 

(d)           Transfer and Exchange of Definitive Securities for Beneficial Interests in Global Securities . Transfers and exchanges of beneficial interests in the Global Securities shall require compliance with either Section 2.2(d)(i), (ii) or (iii) below, as applicable:

 

(i)           Transfer Restricted Definitive Securities to Beneficial Interests in Transfer Restricted Global Securities . If any Holder of a Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in a Transfer Restricted Global Security or to transfer such Transfer Restricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in a Transfer Restricted Global Security, then, upon receipt by the Registrar of the following documentation:

 

(A)         if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in a Transfer Restricted Global Security, a certificate from such Holder in the form attached to the applicable Security;

 

  App. A- 5  

 

 

(B)         if such Transfer Restricted Definitive Security is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

 

(C)         if such Transfer Restricted Definitive Security is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

 

(D)         if such Transfer Restricted Definitive Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

 

(E)         if such Transfer Restricted Definitive Security is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such Holder in the form attached to the applicable Security, including the certifications, certificates and Opinion of Counsel, if applicable; or

 

(F)         if such Transfer Restricted Definitive Security is being transferred to the Issuer or a Subsidiary thereof, a certificate from such Holder in the form attached to the applicable Security;

 

the Trustee shall cancel the Transfer Restricted Definitive Security, and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Security.

 

(ii)          Transfer Restricted Definitive Securities to Beneficial Interests in Unrestricted Global Securities . A Holder of a Transfer Restricted Definitive Security may exchange such Transfer Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security or transfer such Transfer Restricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security only if the Registrar receives the following:

 

(A)         if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security; or

 

(B)         if the Holder of such Transfer Restricted Definitive Securities proposes to transfer such Transfer Restricted Definitive Security to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security,

 

and, in each such case, if the Issuer so requests or if the applicable rules and procedures of the Depository, Euroclear or Clearstream, as applicable, so require, an Opinion of Counsel to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Securities and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Security. If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Security has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order, the Trustee (or the Authenticating Agent) shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Definitive Securities transferred or exchanged pursuant to this subparagraph (ii).

 

  App. A- 6  

 

 

(iii)         Unrestricted Definitive Securities to Beneficial Interests in Unrestricted Global Securities . A Holder of an Unrestricted Definitive Security may exchange such Unrestricted Definitive Security for a beneficial interest in an Unrestricted Global Security or transfer such Unrestricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Security and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Securities. If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Security has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order, the Trustee (or the Authenticating Agent) shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of Unrestricted Definitive Securities transferred or exchanged pursuant to this subparagraph (iii).

 

(iv)         Unrestricted Definitive Securities to Beneficial Interests in Transfer Restricted Global Securities . An Unrestricted Definitive Security cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Security.

 

(e)           Transfer and Exchange of Definitive Securities for Definitive Securities . Upon request by a Holder of Definitive Securities and such Holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Securities. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).

 

(i)           Transfer Restricted Definitive Securities to Transfer Restricted Definitive Securities . A Transfer Restricted Definitive Security may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Security if the Registrar receives the following:

 

(A)         if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Security;

 

(B)         if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Security;

 

(C)         if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Security;

 

  App. A- 7  

 

 

(D)         if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (C) above, a certificate in the form attached to the applicable Security; and

 

(E)         if such transfer will be made to the Issuer or a Subsidiary thereof, a certificate in the form attached to the applicable Security.

 

(ii)          Transfer Restricted Definitive Securities to Unrestricted Definitive Securities . Any Transfer Restricted Definitive Security may be exchanged by the Holder thereof for an Unrestricted Definitive Security or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security if the Registrar receives the following:

 

(1)         if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for an Unrestricted Definitive Security, a certificate from such Holder in the form attached to the applicable Security; or

 

(2)         if the Holder of such Transfer Restricted Definitive Security proposes to transfer such Securities to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Security, a certificate from such Holder in the form attached to the applicable Security,

 

and, in each such case, if the Issuer so requests, an Opinion of Counsel to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)          Unrestricted Definitive Securities to Unrestricted Definitive Securities . A Holder of an Unrestricted Definitive Security may transfer such Unrestricted Definitive Securities to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Securities pursuant to the instructions from the Holder thereof.

 

(iv)          Unrestricted Definitive Securities to Transfer Restricted Definitive Securities . An Unrestricted Definitive Security cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Security.

 

(f)           Legend .

 

(i)           Except as permitted by the following paragraphs (ii), (iii) or (iv), each Rule 144A Security certificate and each Regulation S Security certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

 

  App. A- 8  

 

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL SECURITIES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S] ONLY (A)(1) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (2) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”AS DEFINED IN RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (6) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. [IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]

 

BY ITS ACQUISITION OF THIS SECURITY OR ANY INTEREST HEREIN, THE HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (B) PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”), OR (C) ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT DESCRIBED IN CLAUSE (A) OR (B) ABOVE, OR (2) THE ACQUISITION, HOLDING AND SUBSEQUENT DISPOSITION OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.”

 

  App. A- 9  

 

 

Each Regulation S Security that is a temporary Security issued pursuant to Section 2.10 shall bear a legend substantially in the following form:

 

“THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL SECURITY THAT IS A TEMPORARY SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITY, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).”

 

Each Definitive Security shall bear the following additional legend:

 

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

Each Global Security shall bear the following additional legends:

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

(ii)         Upon any sale or transfer of a Transfer Restricted Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Definitive Security for a Definitive Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Security if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Security).

 

(iii)        Upon a sale or transfer after the expiration of the Restricted Period of any Security acquired pursuant to Regulation S, all requirements that such Security bear the Restricted Securities Legend shall cease to apply and the requirements requiring any such Initial Security be issued in global form shall continue to apply.

 

  App. A- 10  

 

 

(iv)        Any Additional Securities sold in a registered offering shall not be required to bear the Restricted Securities Legend.

 

(g)           Cancellation or Adjustment of Global Security . At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository, at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.

 

(h)           Obligations with Respect to Transfers and Exchanges of Securities .

 

(i)          To permit registrations of transfers and exchanges, the Issuer shall execute and upon receipt of an Authentication Order the Trustee (or the Authenticating Agent) shall authenticate, Definitive Securities and Global Securities at the Registrar’s request.

 

(ii)         No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).

 

(iii)        Prior to the due presentation for registration of transfer of any Security, the Issuer, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Issuer, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary.

 

(iv)        All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

 

(i)           No Obligation of the Trustee .

 

(i)          The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository, or any other Person with respect to the accuracy of the records of the Depository, or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to the Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depository or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository, with respect to its members, participants and any beneficial owners.

 

  App. A- 11  

 

 

(ii)         The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among the Depository, participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

(j)          [ Reserved ].

 

(k)           Transfers of Securities Held by Affiliates . Notwithstanding anything to the contrary in this Section 2.2, any certificate (i) evidencing a Security that has been transferred to an affiliate (as defined in Rule 405 of the Securities Act) of the Issuer, as evidenced by a notation on the certificate of transfer or certificate of exchange for such transfer or in the representation letter delivered in respect thereof, or (ii) evidencing a Security that has been acquired from an affiliate (other than by an affiliate) in a transaction or a chain of transactions not involving any public offering, as evidenced by a notation on the certificate of transfer or certificate of exchange for such transfer or in the representation letter delivered in respect thereof, shall, until one year after the last date on which either the Issuer or any affiliate of the Issuer was an owner of such Security, in each case, be in the form of a permanent Definitive Security and bear the Restricted Securities Legend subject to the restrictions in this Section 2.2. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.2(k). The Issuer, in its sole cost and expense, shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable advance written notice to the Trustee.

 

  App. A- 12  

 

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

[Global Securities Legend]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[Restricted Securities Legend]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL SECURITIES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S] ONLY (A)(1) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (2) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”AS DEFINED IN RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (6) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. [IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]

 

  A- 1  

 

 

BY ITS ACQUISITION OF THIS SECURITY OR ANY INTEREST HEREIN, THE HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (B) PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”), OR (C) ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT DESCRIBED IN CLAUSE (A) OR (B) ABOVE, OR (2) THE ACQUISITION, HOLDING AND SUBSEQUENT DISPOSITION OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

 

[Temporary Restricted Securities Legend – Regulation S]

 

THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL SECURITY THAT IS A TEMPORARY SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITY, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

 

[Definitive Securities Legend]

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

  A- 2  

 

 

[FORM OF SECURITY]

 

No.   [REGULATION S/RULE 144A]

CUSIP: [•] 1

ISIN: [•] 2

7.875% Senior Notes due 2024

 

$_________                  

 

CAMELOT FINANCE S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg, having its registered office at 14 rue Edward Steichen, L-2540 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B 208514 (the “ Issuer ”), promises to pay to [ ], or registered assigns, the principal sum of [ ] U.S. Dollars [or such greater or lesser amount as is indicated on the Schedule of Increases or Decreases in Global Security attached hereto]* on October 15, 2024.

 

Interest Payment Dates: April 15 and October 15.

 

Record Dates: April 1 and October 1.

 

Additional provisions of this Security are set forth on the other side of this Security.

 

 

1 144A CUSIP: 13323A AA8

Regulation S CUSIP: L1408L AA4

2 144A ISIN: US13323AAA88

Regulation S ISIN: USL1408LAA46

 

*If the Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY.”

 

  A- 3  

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

 

  CAMELOT FINANCE S.A.
     
  By:  
    Name:
    Title:

 

  A- 4  

 

 

Dated:  
   
TRUSTEE’S CERTIFICATE OF AUTHENTICATION  
   
WILMINGTON TRUST, NATIONAL ASSOCIATION,  
as Trustee, certifies that this is one of the  
Securities referred to in the Indenture.  
     
     
By:    
  Authorized Signatory  

 

  A- 5  

 

 

[FORM OF REVERSE SIDE OF SECURITY]

 

7.875% Senior Notes due 2024

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.           Interest

 

CAMELOT FINANCE S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg, having its registered office at 14 rue Edward Steichen, L-2540 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B 208514 (the “ Issuer ”), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Issuer shall pay interest semiannually on April 15 and October 15 of each year, commencing April 15, 2017. 1 Interest on the Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from October 3, 2016 1 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest on overdue principal at the rate borne by the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

2.           Method of Payment

 

The Issuer shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the April 1 or October 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date (whether or not a Business Day). The Holders must surrender Securities to a Paying Agent to collect principal payments. The Issuer shall pay principal, premium, if any, and interest in U.S Dollars. Payments in respect of the Securities represented by a Global Security (including principal (upon presentation thereof to the Paying Agent), premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by DTC or any successor depository. The Issuer will make all payments in respect of a certificated Security (including principal, premium, if any, and interest), at the office of the Paying Agent, except that, at the option of the Issuer, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. Dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or a Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

3.           Paying Agent and Registrar

 

Initially, Wilmington Trust, National Association will act as the Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent or Registrar without notice. The Issuer or any domestically incorporated Wholly Owned Subsidiary of UK Holdco may act as Paying Agent or Registrar.

 

 

1 With respect to Securities issued on the Closing Date.

  

  A- 6  

 

 

4.           Indenture

 

The Issuer issued the Securities under an Indenture dated as of October 3, 2016 (the “ Indenture ”), among the Issuer, the Guarantors party thereto and the Trustee. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and the Holders are referred to the Indenture for a statement of such terms and provisions. To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

The Securities are senior unsecured obligations of the Issuer. [This Security is one of the Original Securities referred to in the Indenture.] [This Security is an Additional Security referred to in the Indenture.]

 

To guarantee the due and punctual payment of the principal, premium, if any, and interest, on the Securities and all other amounts payable by the Issuer under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Guarantors have, jointly and severally, irrevocably and unconditionally guaranteed the Guaranteed Obligations on a senior unsecured basis pursuant to the terms of the Indenture.

 

5.           Optional Redemption

 

Except as set forth in the following two paragraphs, the Securities shall not be redeemable at the option of the Issuer prior to October 15, 2019. Thereafter, the Securities shall be redeemable at the option of the Issuer, in whole at any time or in part from time to time, upon not less than 10 nor more than 60 days’ prior notice sent electronically or mailed by first-class mail to each Holder’s registered address or provided otherwise in accordance with the procedures of DTC, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, plus Additional Amounts, if any, to, but not including, the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 15 of the years set forth below:

 

Period   Redemption Price  
2019     103.938 %
2020     101.969 %
2021 and thereafter     100.000 %

 

In addition, at any time prior to October 15, 2019, the Issuer may redeem the Securities at its option, in whole at any time or in part from time to time, upon not less than 10 nor more than 60 days’ prior notice sent electronically or mailed by first-class mail to each Holder’s registered address or provided otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Securities redeemed plus the Applicable Premium, and accrued and unpaid interest, if any, to, but not including, the applicable redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

  A- 7  

 

 

Notwithstanding the foregoing, at any time and from time to time prior to October 15, 2019, the Issuer may redeem in the aggregate up to 40% of the aggregate principal amount of the Securities issued (calculated after giving effect to any issuance of any Additional Securities) with funds in an aggregate amount not exceeding the net cash proceeds of one or more Equity Offerings by UK Holdco or any direct or indirect parent of UK Holdco, in each case, to the extent the net cash proceeds thereof are contributed to the common or preferred equity capital (other than Disqualified Stock) of the Issuer or UK Holdco or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer or UK Holdco from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 107.875% plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided , however , that at least 50% of the original aggregate principal amount of the Securities issued on the Closing Date remain outstanding after each such redemption; and provided , further , that such redemption shall occur within 120 days after the date on which any such Equity Offering is consummated upon not less than 10 nor more than 60 days’ notice provided to each Holder being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

 

If Holders of not less than 90% in aggregate principal amount of the outstanding Securities validly tender and do not withdraw such Securities in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described in Section 4.08(e) of the Indenture, purchases all of the Securities validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon not less than 10 days nor more than 60 days’ prior notice, provided that such notice is given not more than 30 days following such purchase pursuant to the Change of Control Offer described in Section 4.08 of the Indenture, to redeem all Securities that remain outstanding following such purchase at a redemption price in cash equal to the Change of Control Payment plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

 

In connection with any redemption of Securities (including with funds in an aggregate amount not exceeding the net cash proceeds of an Equity Offering), any such redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent, including the completion of any related Equity Offering. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, the redemption date may be delayed until such time (including more than 60 days after the date the notice of redemption was sent) as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed. In addition, the Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.

 

6.           Optional Redemption for Tax Reasons

 

The Securities shall be subject to optional redemption for tax reasons as described in Section 3.10 of the Indenture.

 

7.           Notice of Redemption

 

Notice of redemption will be sent electronically or mailed by first-class mail at least 10 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his, her or its registered address or provided otherwise in accordance with the procedures of the Depository. Securities in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 to the extent practicable. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such redemption date, interest ceases to accrue on such Securities (or such portions thereof) called for redemption.

 

  A- 8  

 

 

8.           Repurchase of Securities at the Option of the Holders upon Change of Control and Asset Sales

 

Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to require the Issuer to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to the Change of Control Payment, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture.

 

In accordance with Section 4.06 of the Indenture, the Issuer will be required to offer to purchase Securities upon the occurrence of certain Asset Sales.

 

9.           Denominations; Transfer; Exchange

 

The Securities are in registered form, without coupons, in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof. A Holder shall register the transfer of or exchange of Securities in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to the sending of a notice of redemption or transfer or exchange any Securities to be redeemed or tendered and not withdrawn in connection with a Change of Control Offer or an Asset Sale Offer.

 

10.          Persons Deemed Owners

 

The registered Holder of this Security shall be treated as the owner of it for all purposes.

 

11.          Unclaimed Money

 

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuer at its written request unless an abandoned property law designates another Person. After any such payment, the Holders entitled to the money must look to the Issuer for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

 

12.          Discharge and Defeasance

 

Subject to certain conditions, the Issuer at any time may terminate some of or all its obligations under the Securities and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Securities to redemption, or maturity, as the case may be.

 

13.          Amendment, Waiver

 

Subject to certain exceptions set forth in the Indenture, including the circumstances set forth in Section 9.02 of the Indenture, (i) the Indenture, the Securities or the Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Securities) and (ii) any existing or past default or compliance with any provisions of such documents may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Securities). Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer and the Trustee may amend the Indenture, the Securities or the Guarantees in the circumstances set forth in Section 9.01 of the Indenture.

 

  A- 9  

 

 

14.          Defaults and Remedies

 

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee by written notice to the Issuer or the Holders of at least 30% of the aggregate principal amount of outstanding Securities by written notice to the Issuer and the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest and Additional Amounts, if any, on all the Securities to be due and payable. Upon such a declaration, such principal and interest and Additional Amounts, if any, will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of, premium, if any, and interest on the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity and/or security (which may include pre-funding) satisfactory to it against all losses, liabilities and expenses which might be Incurred by it in compliance with such request or direction. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities unless (i) the Holder gives to the Trustee written notice stating that an Event of Default is continuing, (ii) the Holders of at least 30% of the aggregate principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy, (iii) such Holder or Holders offer to the Trustee security or indemnity (which may include pre-funding) satisfactory to it against any loss, liability or expense, (iv) the Trustee does not comply with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of outstanding Securities do not give the Trustee a direction inconsistent with the request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or, subject to Section 7.01 of the Indenture, that the Trustee determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any action or forbearance is unduly prejudicial to such Holders) or that would involve the Trustee in personal liability, provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification and/or security (which may include pre-funding) satisfactory to it against all losses, liabilities and expenses caused by taking or not taking such action.

 

  A- 10  

 

 

15.          Trustee Dealings with the Issuer

 

Subject to certain limitations imposed by the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

 

16.          No Recourse Against Others

 

No director, officer, employee, incorporator or holder of any equity interests in the Issuer or of any Guarantor or any other direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Securities, the Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

17.          Authentication

 

This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

 

18.          Abbreviations

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

19.          Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF TO THE EXTENT THE LAW OF ANOTHER JURISDICTION WOULD BE APPLIED THEREBY.

 

20.           CUSIP Numbers and ISINs

 

The Issuer has caused CUSIP numbers and ISINs to be printed on the Securities and has directed the Trustee to use CUSIP numbers and ISINs. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

The Issuer will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.

 

  A- 11  

 

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below:

 

I or we assign and transfer this Security to:

 

 

(Print or type assignee’s name, address and zip code)

 

 

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably appoint                           agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him.

 

 

 

Date:   Your Signature:  

 

 

Sign exactly as your name appears on the other side of this Security.

 

Signature Guarantee:

 

Date:      
  Signature must be guaranteed by a   Signature of Signature Guarantee
  participant in a recognized signature    
  guaranty medallion program or other    
  signature guarantor program reasonably    
  acceptable to the Trustee    

 

  A- 12  

 

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED SECURITIES

 

This certificate relates to $_________ principal amount of Securities held in (check applicable space) ____ book-entry or _____ definitive form by the undersigned.

 

The undersigned:

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depository a Security or Securities in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Security (or the portion thereof indicated above); and

 

check the following, if applicable:

 

  ¨ is an affiliate of the Issuer as contemplated in Section 2.2(k) of Appendix A to the Indenture; or

 

  ¨ is exchanging this Security in connection with an expected transfer to an affiliate of the Issuer as contemplated in Section 2.2(k) of Appendix A to the Indenture.

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Security or Securities; and

 

check the following, if applicable:

 

  ¨ is an affiliate of the Issuer as contemplated in Section 2.2(k) of Appendix A to the Indenture; or

 

  ¨ the transferee is an affiliate of the Issuer as contemplated in Section 2.2(k) of Appendix A to the Indenture.

 

In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Securities are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

(1) ¨ to the Issuer; or
     
(2) ¨ to the Registrar for registration in the name of the Holder, without transfer; or
     
(3) ¨ pursuant to an effective registration statement under the Securities Act of 1933; or
     
(4) ¨ inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
     
(5) ¨ outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Security shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or

 

  A- 13  

 

 

(6) ¨ to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or
     
(7) ¨ pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933.

 

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

Date:   Your Signature:  

 

Signature Guarantee:

 

Date:      
  Signature must be guaranteed by a   Signature of Signature Guarantee
  participant in a recognized signature    
  guaranty medallion program or other    
  signature guarantor program reasonably    
  acceptable to the Trustee    

 

 

 

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Dated:      
      NOTICE:  To be executed by an executive officer

 

  A- 14  

 

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

 

The initial principal amount of this Global Security is set forth on the face hereof. The following increases or decreases in this Global Security have been made:

 

Date of
Exchange
  Amount of
decrease in
Principal Amount
of this Global
Security
  Amount of increase
in Principal Amount
of this Global
Security
  Principal amount of
this Global Security
following such
decrease or increase
  Signature of
authorized signatory
of Trustee
                 
                 
                 

 

  A- 15  

 

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.06 (Asset Sales) or 4.08 (Change of Control) of the Indenture, check the box:

 

Asset Sales   ¨ Change of Control   ¨

 

If you want to elect to have only part of this Security purchased by the Issuer pursuant to Section 4.06 (Asset Sales) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 and any integral multiples of $1,000 in excess thereof):

 

$

 

Date:     Your Signature:  
        (Sign exactly as your name appears on
        the other side of this Security)

 

Signature Guarantee:  

 

Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee

  

  A- 16  

 

 

EXHIBIT B

 

Form of

Transferee Letter of Representation

 

Camelot Finance S.A.,

 

c/o Wilmington Trust, National Association,

as Trustee and Registrar

246 Goose Lane, Suite 105

Guilford, CT 06437

United States

Attention: Camelot Finance Notes Administrator

Facsimile: 203-453-1183

 

Ladies and Gentlemen:

 

This certificate is delivered to request a transfer of $[       ] principal amount of the 7.875% Senior Notes due 2024 (the “ Securities ”) of CAMELOT FINANCE S.A. (the “ Issuer ”).

 

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

 

Name:    
     
Address:    

 

Taxpayer ID Number:    

 

The undersigned represents and warrants to you that:

 

1.          We are an institutional “ accredited investor ” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “ accredited investor ” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

 

  B- 1  

 

 

2.          We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Securities (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Securities of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

Dated:     TRANSFEREE:   ,

 

  by  

  

  B- 2  

 

 

EXHIBIT C

 

[FORM OF SUPPLEMENTAL INDENTURE]

 

[                      ] SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”) dated as of [            ], among [GUARANTOR] (the “ New Guarantor ”), a subsidiary of Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales (“ UK Holdco ”), Camelot Finance S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg, having its registered office at 15 rue Edward Steichen, L-2540 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B 208514 (the “ Issuer ”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the “ Trustee ”).

 

WITNESSETH :

 

WHEREAS the Issuer has heretofore executed and delivered to the Trustee an Indenture (as amended, supplemented or otherwise modified, the “ Indenture ”) dated as of October 3, 2016, providing for the issuance of the Issuer’s 7.875% Senior Notes due 2024 initially in the aggregate principal amount of $500,000,000 (the “ Securities ”);

 

WHEREAS Section 4.10 of the Indenture provides that under certain circumstances the Issuer is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Issuer’s obligations under the Securities pursuant to a Guarantee on the terms and conditions set forth herein; and

 

WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture without consent of the Holders;

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

 

1.           Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “ Holders ” in this Supplemental Indenture shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words “herein,” “hereof” and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

 

2.           Agreement to Guarantee . The New Guarantor hereby agrees, jointly and severally with all existing Guarantors (if any), to unconditionally guarantee the Issuer’s obligations under the Securities on the terms and subject to the conditions and limitations set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Securities and to perform all of the obligations and agreements of a Guarantor under the Indenture.

 

3.           Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby.

 

  C- 1  

 

 

4.           Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 12.02 of the Indenture.

 

5.           Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF TO THE EXTENT THE LAW OF ANOTHER JURISDICTION WOULD BE APPLIED THEREBY.

 

(a)           Consent to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon the Indenture, this Supplemental Indenture, the Securities, the Guarantees or the transactions contemplated hereby (“ Related Proceedings ”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “ Specified Courts ”), and, subject to the final sentence of this Section 5(a), each party irrevocably submits to the non-exclusive jurisdiction of the Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum. The Trustee reserves the right to bring an action in any court that has jurisdiction over the trust estate, which may be a court other than the Specified Courts, when seeking a direction from a court in the administration of the trust estate. On the Closing Date, the Issuer and each Closing Date Guarantor that is not located in the United States appoint Camelot U.S. Acquisition 1 Co., a Delaware corporation (“ Camelot Acquisition Co. ”), as agent for service of process. After the Closing Date, each new Guarantor not located in the United States will appoint either (i) a Guarantor organized in the United States, which initially shall be Camelot Acquisition Co. or (ii) to the extent no Guarantor is organized in the United States, the Issuer and each Guarantor shall appoint CT Corporation System (or another company providing a similar service), in each case as its agent for service of process or other legal summons for purposes of any Related Proceedings that may be instituted in any Specified Courts. The address for Camelot Acquisition Co. , the initial agent for service of process, is Corporation Service Center, 2711 Centerville Road, Suite 400, Wilmington Delaware 19808, United States.

 

(b)           Waiver of Immunity . With respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with respect to any suits, actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding (a “ Related Judgment ”), each party waives any such immunity in the Specified Courts or any other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such immunity at or in respect of any such Related Proceeding or Related Judgment, including, without limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.

 

6.           Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 

  C- 2  

 

 

7.           Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Supplemental Indenture. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

8.           Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.

 

  C- 3  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

 

  [NEW GUARANTOR]
     
  By:  
    Name:
    Title:
     
  CAMELOT FINANCE S.A.
     
  By:  
    Name:
    Title:
     
  WILMINGTON TRUST, NATIONAL ASSOCIATION,
  as Trustee
     
  By:  
    Name:
    Title:

 

  C- 4  

 

Exhibit 10.5

 

EXECUTION VERSION

 

January 14, 2019

 

Churchill Capital Corp

640 Fifth Avenue, 12th Floor

New York, NY 10019

(212) 380-7500

 

Camelot Holdings (Jersey) Limited

Friars House

160 Blackfriars Road

London SE1 8EZ United Kingdom

 

Clarivate Analytics Plc

Friars House

160 Blackfriars Road

London SE1 8EZ United Kingdom

 

Re: Sponsor Agreement

 

Ladies and Gentlemen:

 

This letter (this “ Sponsor Agreement ”) is being delivered to you in connection with that certain Agreement and Plan of Merger, dated as of the date hereof, by and among Churchill Capital Corp, a Delaware corporation (“ Acquiror ”), Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (“ Holdings ”), Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey (the “ Company ”), and the other parties thereto (the “ Merger Agreement ”) and hereby amends and restates in its entirety that certain letter, dated September 6, 2018, from Churchill Sponsor LLC (the “ Sponsor ”) and each of the undersigned individuals (each, a “ Founder ” and collectively, the “ Founders ”) to Acquiror (the “ Prior Letter Agreement ”). Certain capitalized terms used herein are defined in paragraph 11 hereof. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.

 

It is acknowledged and agreed that (i) the Sponsor is currently the record owner of certain Founder Shares and Private Placement Warrants in which the Founders and Garden State Capital Partners LLC, a Delaware limited liability company (“ Garden State ”), have an economic interest as set forth on Annex A attached hereto and (ii) except for purposes of paragraph 25 below, the Sponsor is entering into this Agreement in its capacity as such record owner, the obligations it takes on herein being the obligations of the Founders and Garden State to the extent of their respective obligations hereunder. It is further acknowledged and agreed that 200,000 Founder Shares held of record by Sponsor are held for the benefit of an entity that is not party to, and whose Founder Shares are not subject to, this Agreement.

 

 

 

 

In order to induce the Company, Holdings and Acquiror to enter into the Merger Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sponsor, each of the Founders and, solely for purposes of paragraphs 1, 3, 6(b), 7 and 11-25, Garden State hereby agrees with Acquiror and, at all times prior to any valid termination of the Merger Agreement, the Company and Holdings as follows:

 

1.             The Sponsor, Garden State and each Founder agrees that if Acquiror seeks stockholder approval of a proposed Business Combination (including, without limitation, the Jersey Merger), then in connection with such proposed Business Combination, it, he or she shall (i) vote any shares of Capital Stock owned by it, him or her in favor of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in connection with such stockholder approval or proposed Business Combination. Prior to any valid termination of the Merger Agreement, (a) the Sponsor, Garden State and each Founder shall take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary under applicable Laws to consummate the Jersey Merger and the other transactions contemplated by the Merger Agreement on the terms and subject to the conditions set forth therein, and (b) the Sponsor, Garden State and each Founder shall be bound by and comply with Sections 10.03(b) and 10.05(b) of the Merger Agreement (and any relevant definitions contained in any such Sections) as if such Person were an original signatory to the Merger Agreement with respect to such provisions.

 

2.             The Sponsor and each Founder hereby agrees that in the event that Acquiror fails to consummate a Business Combination by September 6, 2020, or such later period approved by Acquiror’s stockholders in accordance with Acquiror’s amended and restated certificate of incorporation (the “ Charter ”), the Sponsor and each Founder shall take all reasonable steps to cause Acquiror to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem 100% of Acquiror’s Class A common stock, par value $0.0001 per share (the “ Common Stock ”), sold as part of the Units in the Public Offering (the “ Offering Shares ”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (net of amounts withdrawn to pay Acquiror’s taxes and less up to $100,000 of interest to pay dissolution expenses), including interest, divided by the number of then outstanding Offering Shares, which redemption will completely extinguish all Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Acquiror’s remaining stockholders and Acquiror’s board of directors, dissolve and liquidate, subject in each case to Acquiror’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law. The Sponsor and each Founder agrees to not propose any amendment to the Charter that would modify the substance or timing of Acquiror’s obligation to redeem 100% of the Offering Shares if Acquiror does not complete a Business Combination by September 6, 2020, unless Acquiror provides its Public Stockholders with the opportunity to redeem their Offering Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (net of amounts withdrawn to pay Acquiror’s taxes and less up to $100,000 of interest to pay dissolution expenses), including interest, divided by the number of then outstanding Offering Shares.

 

  2  

 

 

The Sponsor and each Founder acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of Acquiror as a result of any liquidation of Acquiror with respect to the Founder Shares held by it, him or her. The Sponsor and each Founder hereby further waive, with respect to any shares of Common Stock held by it, him or her, if any, any redemption rights it, he or she may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a stockholder vote to approve such Business Combination or in the context of a tender offer made by Acquiror to purchase shares of Common Stock (although the Sponsor, the Founders and their respective Affiliates shall be entitled to redemption and liquidation rights with respect to any Offering Shares it or they hold if Acquiror fails to consummate a Business Combination by September 6, 2020 or in connection with a stockholder vote to approve an amendment to the Charter to modify the substance or timing of Acquiror’s obligation to redeem 100% of the Offering Shares if Acquiror does not complete a Business Combination by September 6, 2020).

 

3.             Without limiting their obligations under paragraph 7 below, during the period commencing on the date hereof and ending on the later of (x) the date of any valid termination of the Merger Agreement or the consummation of the Closing and (y) March 5, 2019, the Sponsor, Garden State and each Founder shall not, without the prior written consent of Holdings and the Company (in the case clause (x) applies) or Citigroup Global Markets Inc. (the “ Underwriter ”) (in the case clause (y) applies), (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the rules and regulations of the U.S. Securities and Exchange Commission (the “ Commission ”) promulgated thereunder, with respect to any Units, shares of Capital Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Capital Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Capital Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Capital Stock owned by it, him or her, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii). The Sponsor, Garden State and each of the Founders acknowledges and agrees that, prior to the effective date of any release or waiver of the restrictions set forth in this paragraph 3 or paragraph 7 with respect to Founders (other than the Sponsor and Garden State), Acquiror or Holdings (as applicable) shall announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any such release or waiver granted shall only be effective two business days after the publication date of such press release. The provisions of the immediately preceding two sentences will not apply if (A) the release or waiver is effected solely to permit a transfer of securities without consideration and (B) the transferee has agreed in writing to be bound by the same terms described in this Sponsor Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer. In the event that (a) any shares of Capital Stock, Warrants or other equity securities of Acquiror are issued to the Sponsor, Garden State or any Founder after the date hereof pursuant to any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of Capital Stock of, on or affecting the shares of Capital Stock owned by the Sponsor, Garden State or any Founder or otherwise, (b) the Sponsor, Garden State or any Founder purchases or otherwise acquires beneficial ownership of any shares of Capital Stock or other equity securities of Acquiror after the date hereof or (c) the Sponsor, Garden State or any Founder acquires the right to vote or share in the voting of any shares of Capital Stock or other equity securities of Acquiror after the date hereof (such shares of Capital Stock or other equity securities of Acquiror described in clauses (a), (b) and (c), collectively with the Purchased Shares, the “ New Shares ”), then such New Shares acquired or purchased by the Sponsor, Garden State or any Founder shall be subject to the terms of this paragraph 3 and paragraph 1 above to the same extent as if they constituted the Founder Shares or Private Placement Warrants owned by the Sponsor, Garden State and the Founders as of the date hereof.

 

  3  

 

 

4.             In the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other shareholders, members or managers of the Sponsor) agrees to indemnify and hold harmless Acquiror against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which Acquiror may become subject as a result of any claim by (i) any third party (other than Acquiror’s independent accountants) for services rendered or products sold to Acquiror or (ii) any prospective target business with which Acquiror has entered into a letter of intent, confidentiality or other similar agreement for a Business Combination (a “ Target ”); provided , however , that such indemnification of Acquiror by the Sponsor (x) shall apply only to the extent necessary to ensure that such claims by a third party (other than Acquiror’s independent public accountants) or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (A) $10.00 per Offering Share or (B) the actual amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Offering Share is then held in the Trust Account due to reductions in the value of the trust assets less interest earned on the Trust Account which may be withdrawn to pay taxes, (y) shall not apply to any claims by a third party (including a Target) that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims under Acquiror’s indemnity of the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In the event that any such executed waiver is deemed to be unenforceable against such third party, the Sponsor shall not be responsible to the extent of any liability for such third-party claims. The Sponsor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to Acquiror if, within 15 days following written receipt of notice of the claim to the Sponsor, the Sponsor notifies Acquiror in writing that it shall undertake such defense. For the avoidance of doubt, none of Acquiror’s officers or directors will indemnify Acquiror for claims by third parties, including, without limitation, claims by vendors and prospective target businesses.

 

  4  

 

 

5.             (a)       As a material inducement to, and as a condition to, Holdings and the Company entering into the Merger Agreement, immediately prior to the Closing, (i) Jerre Stead agrees to purchase (either personally or through his designee JMJS Group – II, LP, in which case JMJS Group – II, LP shall execute a joinder to this Sponsor Agreement in form and substance reasonably acceptable to Holdings pursuant to which JMJS Group – II, LP shall become a Founder hereunder), and Acquiror agrees to issue to Jerre Stead (or such designee), 1,000,000 newly-issued Founder Shares at a price equal to $10.00 per share ($10,000,000 in aggregate) payable in cash (by wire transfer of immediately available funds to an Acquiror bank account specified by Acquiror to Jerre Stead), and (ii) Michael Klein agrees to purchase, and Acquiror agrees to issue to Michael Klein, 500,000 newly-issued Founder Shares from Acquiror at a price equal to $10.00 per share ($5,000,000 in the aggregate) payable in cash (by wire transfer of immediately available funds to an Acquiror bank account specified by Acquiror to Michael Klein) (the newly-issued Founder Shares referred to in clauses (i) and (ii), together, the “ Purchased Shares ”). Each of Jerre Stead and Michael Klein hereby represents and warrants (severally and not jointly as to himself (or, in Jerre Stead’s case, his designee) only) to Acquiror that: (A) he is acquiring such Purchased Shares for his own account as principal, for investment purposes only, not for any other Person and not for the purposes of resale or distribution; (B) he is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act; (C) he has not received (and is not relying upon) any representations or warranties from Acquiror, Holdings or the Company or any other person acting on behalf of any such Person or any of its Affiliates; (D) he understands and acknowledges that such Purchased Shares have not been and will not be registered (except as provided in the Registration Rights Agreement (as defined in the Merger Agreement)) under the Securities Act, or the securities laws of any state, and, unless such Founder Shares are so registered, they may not be offered, sold, transferred or otherwise disposed of except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable securities laws of any state or foreign jurisdiction; and (E) he agrees that such Purchased Shares shall be treated as New Shares, Founder Shares and, following the Delaware Merger Effective Time, Holdings Shares, as applicable, under this Sponsor Agreement.

 

(b)       After the Closing, provided that on or before the sixth anniversary of the Closing Date, a $20.00 Stock Price Level (as defined below) is achieved, Holdings shall allot and issue to such Persons as are designated pursuant to this paragraph 5(b) up to 5,000,000 newly-issued ordinary shares of Holdings (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like, the “ Sweetener Shares ”), which Sweetener Shares shall be issued for no additional consideration and in accordance with all applicable Laws on the first date on which the $20.00 Stock Price Level is achieved and such Sweetener Shares shall be issued, credited as fully paid-up. The Sweetener Shares shall be issued to Persons and in amounts designated in a written notice to Holdings given after the date hereof by Jerre Stead and Michael Klein (or, in the event of the death or incapacity of either, by his respective successor to such designation right, the identity of whom shall have been notified to Holdings in writing by the other).  This paragraph 5(b) shall automatically terminate upon the earlier to occur of (i) the day after the sixth anniversary of the Closing Date to the extent the Stock Price Level set forth in this paragraph is not achieved on or prior to such date and (ii) the consummation of a Company Sale in which the per share price paid or implied in such Company Sale is less than $20.00.

 

6.             (a)        Jerre Stead and Sheryl von Blucher hereby agree not to participate in the formation of, or become an officer or director of, any other special purpose acquisition company with a class of securities registered under the Exchange Act until the earliest of (i) the date on which Jerre Stead is no longer a director of Holdings, (ii) if the Merger Agreement is terminated in accordance with its terms, Acquiror has entered into a definitive agreement regarding a Business Combination (other than the Merger Agreement) or (iii) if the Merger Agreement is terminated in accordance with its terms, Acquiror has failed to complete a Business Combination within the time period set forth in the Charter.

 

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(b)       The Sponsor, Garden State and each Founder hereby agrees and acknowledges that: (i) the Underwriter, Acquiror and, prior to any valid termination of the Merger Agreement, Holdings and the Company would be irreparably injured in the event of a breach by such Sponsor, Garden State or a Founder of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 6(a), 7, and 9, as applicable, of this Sponsor Agreement (with respect to the Underwriter, only such provisions as were contained in the Prior Letter Agreement), (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.

 

7.             (a)        In the event that (i) the Closing does not occur for any reason (including, without limitation, as a result of the valid termination of the Merger Agreement), the Sponsor and each Founder agrees that it, he or she shall not Transfer any Founder Shares (or shares of Common Stock issuable upon conversion thereof) until the earlier of (A) one year after the completion of Acquiror’s initial Business Combination or (B) subsequent to the Business Combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after Acquiror’s initial Business Combination or (y) the date on which Acquiror completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of Acquiror’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, and (ii) the Closing does occur, the Sponsor, Garden State and each Founder agrees that it, he or she shall not Transfer (A) any Holdings Shares (other than any Sweetener Shares) or Holdings Warrants owned by such Person as of the Closing Date (after giving effect to the consummation of the Transactions) or (B) any Holdings Shares issued or issuable upon the exercise of such Holdings Warrants (clauses (A) and (B), collectively, the “ Locked-Up Holdings Securities ”) until the third anniversary of the Closing Date; provided , however , that at any time, and from time to time, subsequent to the second anniversary of the Closing Date, the obligations set forth in this paragraph 7 shall terminate with respect to a percentage of each such Person’s Locked-Up Holdings Securities not to exceed one-half of the percentage derived by dividing (x) the total number of ordinary shares of Holdings held in the aggregate by Affiliates of Onex Partners Advisor LP, a Delaware limited partnership (“ Onex ”), and/or by Affiliates of Baring Private Equity Asia Group Limited, a Cayman Islands exempted company (“ Baring ”), as of immediately following the Closing that are sold by such Affiliates prior to such time, by (y) the total number of ordinary shares of Holdings held by such Affiliates as of immediately following the Closing (the period described in clause (i) or (ii), as applicable the “ Founder Shares Lock-up Period ”).

 

(b)       In the event that the Closing does not occur for any reason (including, without limitation, as a result of the valid termination of the Merger Agreement), the Sponsor and each Founder agrees that it, he or she shall not Transfer any Private Placement Warrants (or shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants) until 30 days after the completion of a Business Combination (the “ Private Placement Warrants Lock-up Period ” and, together with the Founder Shares Lock-up Period, the “ Lock-up Periods ”).

 

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(c)       Notwithstanding the provisions set forth in paragraphs 3 and 7(a) and (b), (i) in the event that the Closing does not occur for any reason (including, without limitation, as a result of the valid termination of the Merger Agreement), Transfers of the Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares that are held by the Sponsor, any Founder or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (A) to Acquiror’s officers or directors, any affiliates or family members of any of Acquiror’s officers or directors, any members of the Sponsor, or any affiliates of the Sponsor; (B) in the case of an individual, transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (C) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (D) in the case of an individual, transfers pursuant to a qualified domestic relations order; (E) transfers by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the securities were originally purchased; (F) transfers in the event of Acquiror’s liquidation prior to the completion of an initial Business Combination; (G) transfers by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; and (H) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (A) through (G) above; provided , however , that in the case of clauses (A) through (E) and clause (H), these permitted transferees must enter into a written agreement with Acquiror agreeing to be bound by the transfer restrictions herein; and (ii) during the period commencing on the date hereof and ending on the earlier of (x) the expiration of the Lock-up Periods and (y) the date of any valid termination of the Merger Agreement, Transfers of the Founder Shares, Private Placement Warrants, shares of Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares, the Holdings Shares and the Holdings Warrants that are held by the Sponsor, Garden State, any Founder or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (A) in the case of an individual, transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family (provided that, in each case, the transferor retains sole voting and dispositive control over the Transferred securities), or to a charitable trust (provided that the transferor or his or her spouse retains sole voting and dispositive control over the Transferred securities); (B) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of such individual; (C) in the case of an individual, transfers to such individual’s spouse pursuant to a qualified domestic relations order; (D) in the case of the Sponsor or any Founder, transfers to any other Founder with the prior written consent of Onex, not to be unreasonably withheld or delayed; and (E) transfers by Sponsor to its members pursuant to its limited liability company agreement and in accordance with paragraph 25; provided , that to the extent such members have obligations pursuant to this Agreement, such members shall confirm in writing to Holdings that the securities so distributed to them will continue to be subject to such obligations; provided , further , that any other permitted transferees must enter into a written agreement with Acquiror or Holdings (as applicable) agreeing to be bound by the transfer restrictions herein.

 

(d)        Vesting Provisions . Each of the Founders and the Sponsor (and, for purposes of clause (ii) of this sentence, Garden State) agrees that, as of the Closing, all of (i) the Holdings Shares (other than the Holdings Shares received in respect of the Purchased Shares) as identified on Annex A as being subject to the vesting provisions of this paragraph 7(d) and (ii) the Holdings Warrants as identified on Annex A as being subject to the vesting of this paragraph 7(d), in each case, as of the Closing shall be unvested and shall be subject to the vesting and forfeiture provisions set forth in this paragraph 7(d). The Founders, the Sponsor and Garden State agree that they shall not (and will cause their Affiliates not to) Transfer any unvested Holdings Shares or any unvested Holdings Warrants prior to the later of (x) the expiration of the Founder Shares Lock-up Period and (y) the date such Holdings Shares or Holdings Warrants become vested pursuant to this paragraph 7(d). Notwithstanding anything to the contrary in this Sponsor Agreement, solely for purposes of this paragraph 7(d), the defined term “Founders” shall not include Martin Broughton, Karen G. Mills, Mills Family I, LLC, K&BM LP, Balakrishnan S. Iyer or The Iyer Family Trust dated 1/25/2001 (or their respective Affiliates).

 

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1. Vesting of Holdings Shares .

 

I. Time Vesting Shares . 50% of the unvested Holdings Shares Beneficially Owned by each Founder (or Affiliate thereof) as of the Closing shall vest in three equal annual installments, with the first installment vesting on the first anniversary of the Closing Date.

 

II Performance Vesting Shares .

 

A. 25% of the unvested Holdings Shares Beneficially Owned by each Founder (or Affiliate thereof) as of the Closing shall vest at such time as a $15.25 Stock Price Level is achieved on or before the date that is 42 months after the Closing Date; provided , however , that none of such Holdings Shares shall vest prior to the first anniversary of the Closing Date, not more than 1/3 of such Holdings Shares shall vest prior to the second anniversary of the Closing Date and not more than 2/3 of such Holdings Shares shall vest prior to the third anniversary of the Closing Date. If a $15.25 Stock Price Level is not achieved on or before the date that is 42 months after the Closing Date, then the Holdings Shares that are eligible to vest pursuant to this paragraph 7(d)(1)(II)(A) shall vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the Closing Date. For the avoidance of doubt, if a $17.50 Stock Price Level is not achieved on or prior to the fifth anniversary of the Closing Date, the Holdings Shares that were eligible to vest pursuant to this paragraph 7(d)(1)(II)(A) shall not vest and shall be forfeited as provided in paragraph 7(d)(4).

 

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B. 25% of the unvested Holdings Shares Beneficially Owned by each Founder (or Affiliate thereof) as of the Closing shall vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the Closing Date; provided , however , that none of such Holdings Shares shall vest prior to the first anniversary of the Closing Date, not more than 1/3 of such Holdings Shares shall vest prior to the second anniversary of the Closing Date and not more than 2/3 of such Holdings Shares shall vest prior to the third anniversary of the Closing Date. For the avoidance of doubt, if a $17.50 Stock Price Level is not achieved on or prior to the fifth anniversary of the Closing Date, the Holdings Shares that were eligible to vest pursuant to this paragraph 7(d)(1)(II)(B) shall not vest and shall be forfeited as provided in paragraph 7(d)(4).

 

2. Vesting of Holdings Warrants . 100% of the Holdings Warrants Beneficially Owned by each Founder and Garden State (or any Affiliate thereof) as of the Closing shall vest at such time as a $17.50 Stock Price Level is achieved on or before the fifth anniversary of the Closing Date; provided , however , that none of such Holdings Warrants shall vest prior to the first anniversary of the Closing Date, not more than 1/3 of such Holdings Warrants shall vest prior to the second anniversary of the Closing Date and not more than 2/3 of such Holdings Warrants shall vest prior to the third anniversary of the Closing Date. For the avoidance of doubt, if a $17.50 Stock Price Level is not achieved on or prior to the fifth anniversary of the Closing Date, the Holdings Warrants that were eligible to vest pursuant to this paragraph 7(d)(2) shall not vest and shall be forfeited as provided in paragraph 7(d)(4).

 

3. Acceleration of Vesting upon a Company Sale . In the event of a Company Sale (as defined below) prior to the fifth anniversary of the Closing Date (or prior to the sixth anniversary of the Closing Date for purposes of paragraph 7(d)(3)(V)), vesting of unvested Holdings Shares and Holdings Warrants shall be accelerated or the unvested Holdings Shares and Holdings Warrants will be forfeited, and Sweetener Shares may be issued, as follows:

 

I. The unvested Holdings Shares that were eligible to vest pursuant to paragraph 7(d)(1)(I) and all Time-Delayed Performance Securities shall automatically vest as of immediately prior to the closing of such Company Sale.

 

II. With respect to the unvested Holdings Shares that were eligible to vest pursuant to paragraph 7(d)(1)(II)(A), other than Time-Delayed Performance Securities:

 

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A. If such Company Sale occurs on or before the date that is 42 months after the Closing Date, then (i) such Holdings Shares will fully vest as of immediately prior to the closing of such Company Sale only if the per share price paid or implied in such Company Sale equals or exceeds $15.25, (ii) no portion of such Holdings Shares will vest in connection with such Company Sale if the per share price paid or implied in such Company Sale equals or is less than $13.00, and (iii) if the per share price paid or implied in such Company Sale is between $13.00 and $15.25, the number of such Holdings Shares that will vest in connection with such Company Sale will be determined based on linear interpolation between such share price levels (e.g., 50% of such Holdings Shares will vest if the per share price paid or implied in such Company Sale is $14.125), and no remaining portion of such Holdings Shares will vest in connection with such Company Sale.

 

B. If such Company Sale occurs after the date that is 42 months after the Closing Date and before the fifth anniversary of the Closing Date, then (i) such Holdings Shares will fully vest as of immediately prior to the closing of such Company Sale only if the per share price paid or implied in such Company Sale equals or exceeds $17.50, (ii) no portion of such Holdings Shares will vest in connection with such Company Sale if the per share price paid or implied in such Company Sale equals or is less than $15.00, and (iii) if the per share price paid or implied in such Company Sale is between $15.00 and $17.50, the number of such Holdings Shares that will vest in connection with such Company Sale will be determined based on linear interpolation between such share price levels (e.g., 50% of such Holdings Shares will vest if the per share price paid or implied in such Company Sale is $16.25), and no remaining portion of such Holdings Shares will vest in connection with such Company Sale.

 

III. With respect to the Holdings Shares that were eligible to vest pursuant to paragraph 7(d)(1)(II)(B) and the Holdings Warrants (other than Time-Delayed Performance Securities), (i) such Holdings Shares and Holdings Warrants will fully vest as of immediately prior to the closing of such Company Sale only if the per share price paid or implied in such Company Sale equals or exceeds $17.50, (ii) no portion of such Holdings Shares or Holdings Warrants will vest in connection with such Company Sale if the per share price paid or implied in such Company Sale equals or is less than $15.00, and (iii) if the per share price paid or implied in such Company Sale is between $15.00 and $17.50, the number of such Holdings Shares and Holdings Warrants that will vest in connection with such Company Sale will be determined based on linear interpolation between such share price levels (e.g., 50% of such Holdings Shares and Holdings Warrants will vest if the per share price paid or implied in such Company Sale is $16.25), and no remaining portion of such Holdings Shares or Holdings Warrants will vest in connection with such Company Sale.

 

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IV. Unvested Holdings Shares and unvested Holdings Warrants that do not vest in accordance with this paragraph 7(d)(3) upon the occurrence of a Company Sale will be forfeited immediately prior to the closing of such Company Sale and in accordance with paragraph 7(d)(4); provided that, immediately prior to the closing of such Company Sale, such Holdings Warrants (but not the Holdings Shares) that would be so forfeited shall be transferred, for a purchase price of $1.00 per Holdings Warrant, to the respective Affiliates of Onex and Baring that held Company Shares (as defined below) as of immediately prior to the Jersey Merger Effective Time, on a pro-rata basis, based on their relative percentage ownership of the Company Shares as of immediately prior to the Jersey Merger Effective Time, if the per share price paid or implied in such Company Sale is greater than $12.50, and shall vest in connection with such Transfer.

 

V. In the event of a Company Sale prior to the sixth anniversary of the Closing Date, if the per share price paid or implied in such Company Sale equals or exceeds $20.00, then, to the extent the Sweetener Shares have not previously been issued, all Sweetener Shares shall be issued in accordance with paragraph 5(b) above immediately prior to the consummation of the Company Sale.

 

VI. For purposes of this paragraph 7(d)(3), “ Company Sale ” means (i) a purchase, sale, exchange, business combination or other transaction (including a merger or consolidation of Holdings with or into any other corporation or other entity) in which the equity securities of Holdings, its successor or the surviving entity of such business combination or other transaction are not registered under the Exchange Act or listed or quoted for trading on a national securities exchange or (ii) a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of Holdings’ assets to a third party that is not an Affiliate of Holdings, Onex, Baring, any Founder, the Sponsor or Garden State (or a group of third parties that are not Affiliates of Holdings, Onex, Baring, any Founder, the Sponsor or Garden State). For avoidance of doubt, following a transaction or business combination that is not a “Company Sale” hereunder, including a transaction or business combination in which the equity securities of the surviving entity of such business combination or other transaction are registered under the Exchange Act and listed or quoted for trading on a national securities exchange, the equitable adjustment provisions of Paragraph 23 shall apply, including, without limitation, to performance vesting criteria.

 

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VII. Holders of Holdings Shares subject to the vesting provisions of this paragraph 7(d) shall be entitled to vote such Holdings Shares and receive dividends and other distributions with respect to such Holdings Shares prior to vesting; provided , that dividends and other distributions with respect to Holdings Shares that are subject to performance vesting pursuant to paragraph 7(d)(1)(II) shall be set aside by Holdings and shall be paid (x) to such holders upon the vesting of such Holdings Shares (if at all) or (y) to the respective Affiliates of Onex and Baring and the other persons who held Company Shares as of immediately prior to the Jersey Merger Effective Time, in each case, that receive such Holdings Shares pursuant to paragraph 7(d)(4)(I).

 

4. Forfeiture of Unvested Holdings Shares and Holdings Warrants .

 

I. Unvested Holdings Shares that are forfeited pursuant to paragraph 7(d)(1)(II) or paragraph 7(d)(3) shall be transferred by the forfeiting Founder (or Affiliate thereof) that Beneficially Owns such Holdings Shares, as applicable, to the respective Affiliates of Onex and Baring and the other persons who held ordinary shares in the capital of the Company (“ Company Shares ”) as of immediately prior to the Jersey Merger Effective Time, on a pro-rata basis, based on their relative percentage ownership of the Company Shares as of immediately prior to the Jersey Merger Effective Time, without any consideration for such Transfer. For U.S. federal income tax purposes the parties intend for any such transfer to be treated as an adjustment to the consideration issued to the transferees of such unvested Holdings Shares in connection with the Jersey Merger.

 

II. Unvested Holdings Warrants that are forfeited by a Founder (or Affiliate thereof) pursuant to paragraph 7(d)(2) must be offered for sale, on the fifth anniversary of the Closing, by the forfeiting Founder (or Affiliate thereof) that Beneficially Owns such Holdings Warrants, as applicable, to the respective Affiliates of Onex and Baring that held Company Shares as of immediately prior to the Jersey Merger Effective Time (on a pro-rata basis, based on their relative percentage ownership of the Company Shares as of immediately prior to the Jersey Merger Effective Time), for a purchase price of $1.00 per Holdings Warrant. Such Affiliates of Onex and Baring shall, on a pro-rata basis, based on their relative percentage ownership of the Company Shares as of immediately prior to the Jersey Merger Effective Time, have the right (but not the obligation) to purchase such forfeited Holdings Warrants for a period of 30 days after the forfeiture date. Such right may be exercised in whole or in part at any time during such 30-day period by written notice to the forfeiting Founder or Sponsor, as applicable. Payment of the purchase price must be made in cash within 60 days after the date of such written notice. If any such affiliate of Onex or Baring does not elect to exercise its right to purchase its pro-rata portion of such forfeited Holdings Warrants within 30 days after the forfeiture date, such Holdings Warrants shall be cancelled without any consideration for such cancellation.

 

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III. Unvested Holdings Warrants that are forfeited by Garden State (or Affiliate thereof) pursuant to paragraph 7(d)(2) must be offered for sale, on the fifth anniversary of the Closing, by Garden State (or Affiliate thereof) that Beneficially Owns such Holdings Warrants to Holdings, for a purchase price of $1.00 per Holdings Warrant. Holdings shall have the right (but not the obligation) to purchase such forfeited Holdings Warrants for a period of 30 days after the forfeiture date. Such right may be exercised in whole or in part at any time during such 30-day period by written notice to Garden State. Payment of the purchase price must be made in cash within 60 days after the date of such written notice. If Holdings does not elect to exercise its right to purchase such forfeited Holdings Warrants within 30 days after the forfeiture date, such Holdings Warrants shall be cancelled without any consideration for such cancellation.

 

IV. Notwithstanding the immediately preceding clauses (II) and (III), if the Stock Price Level on the fifth anniversary of the Closing Date is greater than $12.50, then the Unvested Holdings Warrants must be purchased by Affiliates of Onex and Baring (with respect to such Holdings Warrants referred to in clause (II)) and Holdings (with respect to such Holdings Warrants referred to in clause (III)), for a purchase price of $1.00 per Warrant. Payment of the purchase price must be made in cash within 60 days after the date of the fifth anniversary of the Closing Date.

 

V. With respect to the Holdings Warrants that are transferred or sold, as applicable, pursuant to paragraphs 7(d)(3)(IV) and 7(d)(4)(II)-(IV), (x) for U.S. federal income tax purposes, the parties intend that any such transfer or sale will be treated as a forfeiture of such Holdings Warrants by the relevant Founder or Garden State (as applicable) and as an adjustment to the consideration provided to the transferees of such Holdings Warrants in connection with the Jersey Merger and (y) the parties shall, and shall cause their respective Affiliates to, reasonably cooperate in good faith to complete such transfers or sales on a “cashless” basis for the transferee (for example, by exercising all or a portion of such Holdings Warrants and selling the ordinary shares of Holdings issuable in connection therewith in one or more transactions in the open market with the proceeds therefrom used to pay the purchase price and exercise price for such Holdings Warrants).

 

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4. Stock Price Level . For purposes of paragraph 5(b) and this paragraph 7(d), the applicable “ Stock Price Level ” will be considered achieved only when the last reported sale price per Holdings Share on the New York Stock Exchange equals or exceeds the applicable threshold for any 40 trading days during a 60 consecutive trading day period, which 60 consecutive trading day period will not commence until the earlier of (i) the date on which Onex or Baring sell any of their respective Holdings Shares to a third party that is not an Affiliate of Onex, Baring, any Founder, the Sponsor or Garden State, or (ii) the first anniversary of the Closing Date. The Stock Price Levels (and the share price levels in a Company Sale in paragraph 7(d)(3) and paragraph 5(b)) will be equitably adjusted on account of any share split, reverse share split or similar equity restructuring transaction.

 

8.             The Sponsor and each Founder represents and warrants that it, he or she has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked. Each Founder’s biographical information furnished to Acquiror (including, without limitation, any such information included in the Prospectus) is true and accurate in all respects and does not omit any material information with respect to such Founder’s background. The Sponsor’s and each Founder’s questionnaire furnished to Acquiror is true and accurate in all respects. The Sponsor and each Founder represents and warrants that: it, he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is not currently a defendant in any such criminal proceeding.

 

9.             Except as disclosed in the Prospectus or in Schedule 7.07 of the Merger Agreement, neither the Sponsor nor any Founder nor any Affiliate of the Sponsor or any Founder, nor any director or officer of Acquiror, shall receive from Acquiror any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with, any services rendered in order to effectuate the consummation of Acquiror’s initial Business Combination (regardless of the type of transaction that it is, but including, for the avoidance of doubt, the Jersey Merger), other than the following, none of which will be made from the proceeds held in the Trust Account prior to the completion of the initial Business Combination: repayment of a loan and advances up to an aggregate of $300,000 made to Acquiror by the Sponsor; and repayment of loans, if any, and on such terms as to be determined by Acquiror and, prior to any valid termination of the Merger Agreement, the Company from time to time, made by the Sponsor or any of Acquiror’s officers or directors to finance transaction costs in connection with an intended initial Business Combination, provided , that, if Acquiror does not consummate an initial Business Combination, a portion of the working capital held outside the Trust Account may be used by Acquiror to repay such loaned amounts so long as no proceeds from the Trust Account are used for such repayment. None of such loans may be converted into any shares of Capital Stock or Warrants except that, following any valid termination of the Merger Agreement, up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. During the period commencing on the date hereof and ending on the earlier of (i) the consummation of the Closing and (ii) the valid termination of the Merger Agreement, the Sponsor and each Founder agrees not to enter into, modify or amend any Contract between or among the Sponsor, any Founder, anyone related by blood, marriage or adoption to any Founder or any Affiliate of any such Person (other than Acquiror or any of its Subsidiaries), on the one hand, and Acquiror or any of its Subsidiaries, on the other hand, that would contradict, limit, restrict or impair (x) any party’s ability to perform or satisfy any obligation under this Agreement or (y) the Company’s, Holdings’ or Acquiror’s ability to perform or satisfy any obligation under the Merger Agreement; provided that nothing herein shall restrict the issuance of any new Stockholder Notes expressly permitted to be entered into pursuant to Section 9.03(a)(vii) of the Merger Agreement (it being understood and agreed that the full amount of all outstanding principal, accrued and unpaid interest and other payment obligations under the Stockholder Notes shall be paid in cash at the Closing by Acquiror as provided in the Merger Agreement, at which time the Stockholder Notes shall be terminated without any continuing liability or obligation on the part of any party thereto).

 

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10.           The Sponsor and each Founder have full right and power, without violating any agreement to which it is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Sponsor Agreement and, as applicable, to serve as an officer and/or a director on the board of directors of Acquiror.

 

11.          As used herein, the following terms shall have the respective meanings set forth below:

 

(a)       “ Beneficially Own ” has the meaning ascribed to it in Section 13(d) of the Exchange Act.

 

(b)       “ Business Combination ” shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving Acquiror and one or more businesses.

 

(c)       “ Capital Stock ” shall mean, collectively, the Common Stock and the Founder Shares.

 

(d)       “ Founder Shares ” shall mean the shares of Acquiror’s Class B common stock, par value $0.0001 per share, except as otherwise set forth in Annex A .

 

(e)       “ Holdings Shares ” shall mean the ordinary shares of Holdings issued in connection with the Delaware Merger in exchange for Founders Shares (including the Purchased Shares).

 

(f)        “ Holdings Warrants ” shall mean the warrants to purchase ordinary shares of Holdings issued in connection with the Delaware Merger in exchange for Private Placement Warrants.

 

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(g)       “ Private Placement Warrants ” shall mean the Warrants to purchase up to 18,300,000 shares of Common Stock Beneficially Owned by the Founders in the aggregate, except as otherwise set forth in Annex A .

 

(h)       “ Prospectus ” shall mean the registration statement on Form S-1 and prospectus filed by Acquiror with the Commission in connection with the Public Offering.

 

(i)         “ Public Offering ” shall mean the underwritten initial public offering of 69,000,000 of Acquiror’s units (the “ Units ”), each comprised of one share of Common Stock and one-half of one Warrant.

 

(j)         “ Public Stockholders ” shall mean the holders of securities issued in the Public Offering.

 

(k)        “ Subject Shares ” shall mean, collectively, the Holdings Shares Beneficially Owned by the Sponsor and the Founders, in each case, that (i) have vested in accordance with paragraph 7(d) or, if the transaction giving rise to the Tag-Along Right is a Company Sale, would vest (or, with respect to the Sweetener Shares, would be issuable) in connection with such Company Sale pursuant to paragraph 7(d)(3) and (ii) are no longer Locked-Up Holdings Securities.

 

(l)         “ Termination Event ” shall mean any transaction which results in Affiliates of Onex and Baring owning, in the aggregate, less than 200,000 ordinary shares of Holdings.

 

(m)       “ Third Party Terms ” shall mean (i) the name of the proposed transferee in a Transfer and the number of ordinary shares of Holdings proposed to be transferred in such Transfer, (ii) the proposed amount, type and form of per share consideration and the terms and conditions of payment offered by such transferee and (iii) a summary of any other material terms pertaining to such Transfer.

 

(n)       “ Time-Delayed Performance Securities ” shall mean any Holdings Shares and Holdings Warrants subject to performance vesting under paragraph 7(d)(1)(II) or 7(d)(2), as applicable, the vesting of which is dependent only on the passage of time as a result of the performance goals associated therewith having been achieved.

 

(o)       “ Trust Account ” shall mean the trust fund into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Warrants shall be deposited.

 

(p)       “ Transfer ” shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii) above.

 

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12.           This Sponsor Agreement and the other agreements referenced hereto constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby, including, without limitation, the Prior Letter Agreement. This Sponsor Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by Holdings, the Company and the other parties charged with such change, amendment, modification or waiver, it being acknowledged and agreed that neither Holdings’ nor the Company’s execution of such an instrument will be required after any valid termination of the Merger Agreement.

 

13.           Except as otherwise provided herein, no party hereto may assign either this Sponsor Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties (except that, following any valid termination of the Merger Agreement, no consent from Holdings or the Company shall be required). Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Sponsor Agreement shall be binding on the Sponsor, Garden State, each Founder, Holdings and the Company and their respective successors, heirs, personal representatives and assigns and permitted transferees.

 

14.           Nothing in this Sponsor Agreement shall be construed to confer upon, or give to, any person or entity other than the parties hereto any right, remedy or claim under or by reason of this Sponsor Agreement or of any covenant, condition, stipulation, promise or agreement hereof, except that the Onex/Baring Shareholders are express third party beneficiaries of, and are entitled to enforce, paragraphs 25 and 27. All covenants, conditions, stipulations, promises and agreements contained in this Sponsor Agreement shall be for the sole and exclusive benefit of Acquiror, the Sponsor, the Founders and Garden State (and, prior to any valid termination of the Merger Agreement, the Company and Holdings) and their respective successors, heirs, personal representatives and assigns and permitted transferees, except that the Onex/Baring Shareholders are express third party beneficiaries of, and are entitled to enforce, paragraphs 25 and 27.

 

15.           This Sponsor Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

16.           This Sponsor Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Sponsor Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Sponsor Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

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17.           This Sponsor Agreement, and all claims or causes of action based upon, arising out of, or related to this Sponsor Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction. Any Action based upon, arising out of or related to this Sponsor Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Sponsor Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this paragraph. The prevailing party in any such Action (as determined by a court of competent jurisdiction) shall be entitled to be reimbursed by the non-prevailing party for its reasonable expenses, including reasonable attorneys’ fees, incurred with respect to such Action. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS SPONSOR AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

18.           Any notice, consent or request to be given in connection with any of the terms or provisions of this Sponsor Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission, to the receiving party’s address or facsimile number set forth above or on the receiving party’s signature page hereto; provided that any such notice, consent or request to be given to Acquiror, Holdings or the Company at any time prior to the valid termination of the Merger Agreement shall be given in accordance with the terms of Section 13.02 of the Merger Agreement.

 

19.           This Sponsor Agreement shall terminate on the earlier of (i) the latest of (w) the expiration of the Lock-up Periods, (x) the vesting in full and delivery of all Locked-Up Holdings Securities, (y) the issuance of the Sweetener Shares or (z) if the Sweetener Shares have not been issued on or prior to the sixth anniversary of the Closing, the date after the sixth anniversary of the Closing, or (ii) prior to the Closing, the liquidation of Acquiror or, if the Closing shall have occurred, Holdings; provided , however , that paragraph 4 of this Sponsor Agreement shall survive such liquidation for a period of six years; provided , further , that no such termination shall relieve the Sponsor, Garden State, any Founder, Holdings or the Company from any liability resulting from a breach of this Sponsor Agreement occurring prior to such termination.

 

20.           Each party hereto that is also a party to that certain Registration Rights Agreement, dated as of September 6, 2018, by and among Acquiror, the Sponsor and the other parties signatory thereto (the “ Existing Registration Rights Agreement ”) hereby agrees to amend and restate the Existing Registration Rights Agreement, effective as of the Closing. At or prior to the Closing, the Sponsor, Garden State and each Founder contemplated to become a party to the Registration Rights Agreement and Nominating Agreement shall deliver to Holdings each such agreement, duly executed by such Person, in the form attached to the Merger Agreement.

 

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21.           Each of the Sponsor, Garden State and the Founders hereby represents and warrants (severally and not jointly as to itself, himself or herself only) to Acquiror, Holdings and the Company as follows: (i) if such Person is not an individual, it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance of this Sponsor Agreement and the consummation of the transactions contemplated hereby are within such Person’s corporate, limited liability company or organizational powers and have been duly authorized by all necessary corporate, limited liability company or organizational actions on the part of such Person; (ii) if such Person is an individual, such Person has full legal capacity, right and authority to execute and deliver this Sponsor Agreement and to perform his or her obligations hereunder; (iii) this Sponsor Agreement has been duly executed and delivered by such Person and, assuming due authorization, execution and delivery by the other parties to this Sponsor Agreement, this Sponsor Agreement constitutes a legally valid and binding obligation of such Person, enforceable against such Person in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies); (iv) the execution and delivery of this Sponsor Agreement by such Person does not, and the performance by such Person of his, her or its obligations hereunder will not, (A) if such Person is not an individual, conflict with or result in a violation of the organizational documents of such Person, or (B) require any consent or approval that has not been given or other action that has not been taken by any third party (including under any Contract binding upon such Person or such Person’s Founder Shares or Private Placement Warrants, as applicable), in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by such Person of its, his or her obligations under this Sponsor Agreement; (v) there are no Actions pending against such Person or, to the knowledge of such Person, threatened against such Person, before (or, in the case of threatened Actions, that would be before) any arbitrator or any Governmental Authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by such Person of its, his or her obligations under this Sponsor Agreement; (vi) except for fees described on Schedule 7.07 of the Merger Agreement, no financial advisor, investment banker, broker, finder or other similar intermediary is entitled to any fee or commission from such Person, Acquiror, any of its Subsidiaries or any of their respective Affiliates in connection with the Merger Agreement or this Sponsor Agreement or any of the respective transactions contemplated thereby and hereby, in each case, based upon any arrangement or agreement made by or, to the knowledge of such Person, on behalf of such Person, for which Acquiror, Holdings, the Company or any of their respective Affiliates would have any obligations or liabilities of any kind or nature; (vii) except as set forth on Annex B hereto, none of (x) such Person, (y) anyone related by blood, marriage or adoption to such Person or (z) to the knowledge of such Person, any other Person in which such first Person has a direct or indirect legal or contractual relationship or Beneficial Ownership of 5% or more of the outstanding equity securities of such second Person, in each case, is party to, or has any rights with respect to or arising from, any Contract, instrument, arrangement or understanding with Acquiror or any of its Subsidiaries (including, without limitation, the Stockholder Notes); (viii) such Person has had the opportunity to read the Merger Agreement and this Sponsor Agreement and has had the opportunity to consult with its tax and legal advisors; (ix) such Person has not entered into, and shall not enter into, any agreement that would restrict, limit or interfere with the performance of such Person’s obligations hereunder; (x) except as otherwise described in this Sponsor Agreement, such Person has the direct or indirect interest in all of its, his or her Founder Shares and Private Placement Warrants listed on Annex A hereto, which are held through the Sponsor, the Sponsor has good title to all such Founder Shares and Private Placement Warrants, and there exist no Liens or any other limitation or restriction (including, without limitation, any restriction on the right to vote, sell or otherwise dispose of such Founder Shares or Private Placement Warrants (other than transfer restrictions under the Securities Act)) affecting any such Founder Shares or Private Placement Warrants, other than pursuant to (A) this Sponsor Agreement, (B) the Charter, (C) the Merger Agreement, (D) the Existing Registration Rights Agreement, or (E) any applicable securities laws; and (xi) the Founder Shares and Private Placement Warrants listed on Annex A hereto are the only equity securities in Acquiror (including, without limitation, any equity securities convertible into, or which can be exercised or exchanged for, equity securities of Acquiror) owned of record or Beneficially Owned by such Person as of the date hereof, and none of such Founder Shares or Private Placement Warrants is subject to any proxy, voting trust or other agreement or arrangement with respect to the voting of such Founder Shares or Private Placement Warrants, except as provided in this Sponsor Agreement.

 

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22.           Upon the occurrence of a Termination Event, the restrictions set forth in paragraph 7(a)(ii) shall terminate and be of no further force or effect.

 

23.           If, and as often as, there are any changes in Holdings, the Holdings Shares, the Holdings Warrants or the Sweetener Shares by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Sponsor Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to Holdings, Holdings’ successor or the surviving entity of such transaction, the Holdings Shares, Holdings Warrants and the Sweetener Shares, each as so changed. For avoidance of doubt, such equitable adjustment shall be made to the performance criteria set forth in paragraphs 7(d) and 5(b).

 

24.           Each of the parties hereto agrees to execute and deliver hereafter any further document, agreement or instrument of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof and as may be reasonably requested in writing by another party hereto.

 

25.           The Sponsor, M. Klein Associates, Inc. (“ Manager ”) and each of the Sponsor’s members, each of which is a party hereto, agrees with Holdings and the respective Affiliates of Onex and Baring that own ordinary shares of Holdings from time to time (collectively, the “ Onex/Baring Shareholders ”) that, without the prior written consent of the holders of a majority of the ordinary shares of Holdings collectively held by the Onex/Baring Shareholders (which consent may be withheld in their sole discretion, except as otherwise specifically set forth herein):

 

(a)       Prior to the completion of the distribution described in clause (b) below, the Sponsor and each of its members will maintain the exact equity ownership in the Sponsor that is set forth on Annex A attached hereto. In furtherance of the foregoing, (i) the Sponsor will not incur or permit any lien or encumbrance on any of its assets or equity interests, and it will not permit any Transfer, redemption, repurchase, issuance or other disposition of any of its equity interests or assets (including, without limitation, the equity securities of Holdings owned by the Sponsor and any dividends received thereon, other than as set forth in the second paragraph of this Sponsor Agreement) to occur prior to the completion of the distribution described in clause (b) below, (ii) no member of the Sponsor will (or permit any other member of the Sponsor to) sell, pledge, encumber or otherwise Transfer any of the Sponsor’s equity interests or assets (including, without limitation, the equity securities of Holdings owned by the Sponsor and any dividends received thereon), directly or indirectly, whether by merger, operation of law or otherwise, prior to the completion of the distribution described in clause (b) below, and (iii) the Sponsor and its members will cause the Sponsor not to be terminated, dissolved, liquidated, merged, combined, reorganized, recapitalized, restructured or subjected to any proceeding that could result in any of the foregoing (whether in bankruptcy or otherwise) prior to the completion of the distribution described in clause (b) below. Manager shall cause the Sponsor to comply with all of its obligations under this clause (a) and clause (b) below.

 

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(b)       At any time following the expiration of the Founder Shares Lock-up Period, upon five business days’ prior written notice to Holdings, the Sponsor, Manager and the Sponsor’s members shall cause all equity securities of Holdings owned by the Sponsor to be distributed to the Sponsor’s members in exactly the amounts for each such member as set forth on Annex A attached hereto (together with any dividends received by the Sponsor on such member’s Holdings equity securities). Any fees and expenses (including taxes) related to such distribution, the maintenance of the Sponsor in good standing under the laws of the State of Delaware or compliance with the Sponsor’s obligations under clause (a) above (together with all other fees and expenses incurred by the Sponsor) prior to such distribution will be discharged and paid in full by Manager or the Sponsor’s members (pro rata based on their respective equity ownership in the Sponsor) prior to such distribution. Until such fees and expenses have been discharged and paid in full, Holdings shall not have any obligation to issue new share certificates or warrants in the name of any of the Sponsor’s members, to cooperate in any respect with the completion of such distribution or to recognize any member of the Sponsor as a record holder of any equity securities of Holdings owned by the Sponsor as of the Closing. Anything contained herein to the contrary notwithstanding, in the event that the Sponsor wishes to distribute equity securities of Holdings owned by the Sponsor to its members prior to the expiration of the Founder Shares Lock-up Period, Holdings and the Onex/Baring Shareholders shall reasonably consent to such distribution, provided that the Sponsor complies with the provisions set forth in the first sentence of this clause (b) and such members comply with the provisions set forth in the proviso to paragraph 7(c)(ii)(E).

 

(c)       The Sponsor, Manager and each of the Sponsor’s members acknowledge and agree that a breach of any of the obligations under clauses (a) and (b) above may be enforced by injunctive relief as set forth in paragraph 6(b) hereof; this being in addition to all other remedies available at equity or in law to Holdings and the Onex/Baring Shareholders. Any distribution or Transfer in breach of clauses (a) or (b) above shall be void ab initio, and Manager, the Sponsor and each member of the Sponsor shall be required to take any and all actions requested by Holdings or the Onex/Baring Shareholders to promptly cure such breach and shall reimburse Holdings and/or the Onex/Baring Shareholders for any costs and expenses in connection therewith.

 

(d)       Prior to the completion of the distribution described in clause (b) above, solely for purposes of determining any Sponsor member’s Beneficial Ownership of Holdings Shares or Holdings Warrants (as applicable) hereunder, such member shall be deemed to Beneficially Own only the number of Holdings Shares of Holdings Warrants (as applicable) set forth next to such member’s name on Annex A attached hereto.

 

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26.            Tag-Along Rights

 

(a)       At any time following the expiration of the Founder Shares Lock-Up Period with respect to any Subject Shares, if one or more of the Affiliates of Onex that own ordinary shares of Holdings from time to time (collectively, the “ Onex Shareholders ”) proposes to Transfer (other than a Transfer (x) to any Person that is an Affiliate of Holdings, Onex, Baring, any Founder, the Sponsor or Garden State or (y) in a Public Offering (as defined in the Registration Rights Agreement (as defined in the Merger Agreement) or in a sale to the public under Rule 144 of the Securities Act) all or any portion of the ordinary shares of Holdings then held by such Onex Shareholder and the Dragging Shareholders (as defined below) do not exercise their Drag-Along Rights (as defined below), if applicable, with respect to such Transfer (such Onex Shareholder proposing such Transfer being the “ Transferring Shareholder ”), then the provisions of this paragraph 26 shall apply. In such event, the Sponsor, the Founders and Garden State (the “ Tag-Along Shareholders ”) shall have the right (the “ Tag-Along Right ”) to sell in their discretion up to the same percentage of such Tag-Along Shareholders’ Subject Shares as the Transferring Shareholder is proposing to sell in such Transfer by requesting that the transferee in such Transfer purchase from each such Tag-Along Shareholder up to the number of Subject Shares equal to the number derived by multiplying (i) the total number of Subject Shares that the transferee has agreed or committed to purchase from the Transferring Shareholder by (ii) a fraction, the numerator of which is the total number of Subject Shares owned by such Tag-Along Shareholder, and the denominator of which is equal to the sum of (x) the total number of ordinary shares of Holdings then held by the Onex Shareholders plus (y) the total number of Subject Shares. Any Subject Shares purchased from Tag-Along Shareholders pursuant to this paragraph 26 shall be purchased upon the same terms and conditions (including timing of purchase and payment and the type and form of consideration) as such proposed Transfer by such Transferring Shareholder.

 

(b)       If any Onex Shareholder proposes to make a Transfer triggering the Tag-Along Right, such Transferring Shareholder shall send a written notice (each, a “ Sale Notice ”) to all Tag-Along Shareholders at least thirty (30) days prior to the date on which such Transferring Shareholder expects to consummate such Transfer. Each Sale Notice shall set forth the Third Party Terms applicable to the proposed Transfer, the maximum number of ordinary shares of Holdings the Tag-Along Shareholder to whom the Sale Notice is delivered is entitled to sell pursuant to the Tag-Along Right (including the calculation of such participant’s pro rata portion) and the anticipated closing date of the Transfer, and shall be accompanied by a copy of any written documents reflecting the terms and conditions agreed to by the Transferring Shareholder and the transferee.

 

(c)        Each Tag-Along Shareholder that desires to exercise the Tag-Along Right shall deliver a written notice (each, “ Tag-Along Notice ”) to that effect to the Transferring Shareholder within twenty (20) days following receipt of the Sale Notice from such Transferring Shareholder. The Tag-Along Notice shall state the number of Subject Shares (not to exceed the amount determined in accordance with paragraph 26(a)) that such Tag-Along Shareholder proposes to include in such Transfer, and shall constitute the Tag-Along Shareholder’s binding agreement to sell its Subject Shares on the terms and subject to the conditions as are specified in or accompany the Sale Notice. If the transferee does not purchase the specified number of Subject Shares from the Tag-Along Shareholders on the same terms and conditions as specified in the Sale Notice and at the same time as the transferee purchases Subject Shares of Holdings from such Transferring Shareholder, then such Transferring Shareholder shall not be entitled to sell any ordinary shares of Holdings in the proposed Transfer unless such Transferring Shareholder or its designee substantially concurrently purchases from each such Tag-Along Shareholder the number of Subject Shares of such Tag-along Shareholder as is specified in its Tag-Along Notice, on the Third Party Terms.

 

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(d)       At the closing of the Transfer pursuant to this paragraph 26, the transferee shall remit to each Tag-Along Shareholder the consideration for the Subject Shares of such Tag-Along Shareholder sold pursuant hereto (less any such consideration to be escrowed or otherwise held back in accordance with the Third Party Terms; provided , however , that such escrow or hold back is pro rata among all sellers of ordinary shares of Holdings participating in such transaction based on the number of ordinary shares of Holdings being sold by each such seller in the transaction), against delivery by such Tag-Along Shareholder of certificates (if any) representing such Subject Shares, duly endorsed for Transfer or with duly executed stock powers or similar instruments, or such other instrument of Transfer of such Subject Shares as may be reasonably requested by the transferee or Holdings, and the compliance by such Tag-Along Shareholder with any other conditions to closing generally applicable to all shareholders of Holdings selling ordinary shares of Holdings in such transaction; provided , that (i) no such condition shall require a Tag-Along Shareholder to undertake or agree to bear joint and several liability with any other party thereto or to bear more than such Tag-Along Shareholder’s proportionate share of any indemnification obligations or be liable in respect of any individual representations, covenants or warranties made solely with respect to another shareholder of Holdings, including with respect to title, authority, non-contravention and power to transfer equity (in each case, other than through a common escrow), (ii) no Tag-Along Shareholder shall be liable in respect of any post-closing indemnification in excess of the aggregate amount of proceeds received by such Tag-Along Shareholder in connection with such Transfer and (iii) no such condition shall require a Tag-Along Shareholder to enter into any agreement not to compete with Holdings or any of its Subsidiaries, or commit to any similar obligation, in connection with the Transfer.

 

(e)       If any Transfer described in a Sale Notice has not been consummated in accordance with the terms set forth in the Sale Notice within one hundred and eighty (180) days after the date of delivery of the Sale Notice, or if (i) the terms of such proposed Transfer have been modified in any respect that would increase the per share price or (ii) the other non-monetary terms of such proposed Transfer shall have been changed in any material respect from those set forth in the Sale Notice, such Transfer may not be completed without first providing a new Sale Notice to the Tag-Along Shareholders and allowing another opportunity for such Tag-Along Shareholders to elect to exercise their Tag-Along Right set forth in this paragraph 26.

 

27.           Drag-Along Rights

 

(a)       At any time after the Closing, if one or more of the Onex/Baring Shareholders proposes to Transfer fifty percent (50%) or more of the ordinary shares of Holdings then-held by the Onex/Baring Shareholders, in the aggregate, in a private transaction to a Person or group of Persons (other than an Affiliate of Onex or Baring), then, in each case, the provisions of this paragraph 27 shall apply (each a “ Drag-Along Transfer ”, and the Onex/Baring Shareholders initiating such Transfer, the “ Dragging Shareholders ”). In such event, the Dragging Shareholders shall have the right (a “ Drag-Along Right ”), but not the obligation, to cause all, but not less than all, of the Founders, Garden State, and, if applicable, the Sponsor (collectively, the “ Drag-Along Shareholders ”) to tender for purchase to the proposed transferee in such Drag-Along Sale, a number of Holdings Shares equaling the number derived by multiplying (i) the total number of ordinary shares of Holdings proposed to be purchased by the proposed transferee in such Drag-Along Sale by (ii) a fraction, the numerator of which is the total number of Holdings Shares held by each such Drag-Along Shareholder and the denominator of which is the total number of then outstanding ordinary shares of Holdings. For the purpose of this paragraph 27(a), each reference to “Holdings Shares” shall be deemed to include all Holdings Shares Beneficially Owned by the Drag-Along Shareholders (whether or not subject to vesting).

 

  23  

 

 

(b)       Any Dragging Shareholder that elects to exercise its Drag-Along Right shall so notify each of the Drag-Along Shareholders pursuant to a written notice (each, a “ Drag-Along Notice ”) delivered to the Drag-Along Shareholders at least ten (10) days prior to the date on which the Dragging Shareholder expects the proposed Drag-Along Transfer that triggered such Drag-Along Right to be consummated. Each Drag-Along Notice shall set forth the Third Party Terms applicable to such Drag-Along Sale, together with a copy of any written documents constituting the offer or proposal of the proposed transferee and the number of Holdings Shares that such Drag-Along Shareholder is required to sell pursuant to the Drag-Along Right. The terms and conditions applicable to such purchase and sale of any Holdings Shares purchased from any Drag-Along Shareholder pursuant to this paragraph 27 shall be on such Third Party Terms and otherwise be the same as the terms and conditions applicable to such Dragging Shareholders, including the type and form of consideration, timing of purchase, sale and payment (with an exception for any “rollover” by the Dragging Shareholders).

 

(c)       Upon the receipt of a Drag-Along Notice, each Drag-Along Shareholder shall be obligated to sell the number of Holdings Shares required to be sold by such Drag-Along Shareholder as set forth in the Drag-Along Notice on the Third Party Terms, on any other terms and subject to any other conditions generally applicable to all shareholders selling to the transferee in connection with such transaction and subject to the consummation of such transaction in accordance with its terms. Each Drag-Along Shareholder agrees to take all necessary action to approve a Transfer pursuant to and in accordance with this paragraph 27, including to (i) vote its Holdings Shares in favor of such Transfer if so required by applicable Law, (ii) take such other action as may be required to effect such Transfer (subject to the limitations set forth in paragraph 27(d)) and (iii) refrain from exercising, and take all actions to waive, any dissenters, appraisal or similar rights with respect thereto (including the waiver of any right of pre-emption they may have in relation to such Transfer of ordinary shares of Holdings).

 

(d)       At the closing of the Transfer pursuant to this paragraph 27, the transferee shall remit to each Drag-Along Shareholder the consideration for the Holdings Shares to be sold by such Drag-Along Shareholder (less any portion of the consideration to be escrowed or otherwise held back in accordance with the Third Party Terms; provided , however , that such escrow or hold back is pro rata among all Drag-Along Shareholders and other parties selling securities in such transaction based on the number of securities being sold by such Drag-Along Shareholders and other parties in such transaction), against delivery by such Drag-Along Shareholder of the certificates (if any) representing such Holdings Shares, duly endorsed for Transfer or with duly executed stock powers or similar instruments, and such other instruments of Transfer, in each case, as may be reasonably requested by the transferee or Holdings, and the compliance by such Drag-Along Shareholder with any other conditions to closing generally applicable to all shareholders selling ordinary shares of Holdings in such transaction; provided , that (i) no such condition shall require such Drag-Along Shareholder to undertake or agree to bear joint and several liability with any other party thereto or to bear more than such Drag-Along Shareholder’s proportionate share of any indemnification obligations (other than through a common escrow), (ii) such Drag-Along Shareholder shall not be liable in respect of any post-closing indemnification in excess of the aggregate amount of proceeds received by such Drag-Along Shareholder in connection with such Transfer, (iii) such Drag-Along Shareholder shall not bear any liability with respect to any individual representations, covenants or warranties made solely with respect to another shareholder, including with respect to title, authority, non-contravention and power to transfer equity (in each case, other than through a common escrow), (iv) such Drag-Along Shareholder shall only make the same individual representations, warranties, covenants and indemnities concerning such Drag-Along Shareholder and Holdings Shares to be sold by such Drag-Along Shareholder as made by the Dragging Shareholders, (v) no such condition shall require such Drag-Along Shareholder to enter into any agreement not to compete with Holdings or any of its Subsidiaries, or commit to any similar obligation, in connection with the Transfer and (vi) no such condition shall require such Drag-Along Shareholder to enter into any agreement not to solicit or hire employees of Holdings or any of its Subsidiaries, or commit to any similar obligation, in connection with the Transfer, except, with respect to this clause (vi), to the extent entered into by the Dragging Shareholders.

 

[Signature Pages Follow]

 

  24  

 

 

  Sincerely,
   
  SPONSOR:
   
  CHURCHILL SPONSOR LLC
     
  By: /s/ Michael S. Klein
  Name: Michael S. Klein
  Title:  
  Address:  
  Fax Number:  
   
  FOUNDERS:
   
  /s/ Jerre Stead
  Jerre Stead
  Address:
  Fax Number:
   
  /s/ Michael S. Klein
  Michael S. Klein
  Address:
  Fax Number:
   
  /s/ Sheryl von Blucher
  Sheryl von Blucher
  Address:
  Fax Number:
   
  /s/ Martin Broughton
  Martin Broughton
  Address: Rosemary House
    Woodhurst Park
    Oxted, Surrey U.K.
  Fax Number:

 

[ Signature Page to Sponsor Agreement ]

 

 

 

 

  /s/ Karen G. Mills
  Karen G. Mills
  Address: 175 Blossom Street #1103
    Boston, MA 02114
  Fax Number:
     
  /s/ Balakrishnan S. Iyer
  Balakrishnan S. Iyer
  Address: 4 Nidden
    Irvine, CA 92603
  Fax Number: (949) 854-0570

 

  M. KLEIN ASSOCIATES, INC.
  (including in its capacity as Manager)
     
  By: /s/ Michael S. Klein
  Name: Michael S. Klein
  Title:
  Address:
  Fax Number:

 

     
  THE IYER FAMILY TRUST DATED 1/25/2001
     
  By: /s/ Balakrishnan S. Iyer
  Name: Balakrishnan S. Iyer
  Title: Trustee
  Address: 4 Nidden
      Irvine, CA 92603
  Fax Number: (949) 854-0570

 

[ Signature Page to Sponsor Agreement ]

 

 

 

 

  MILLS FAMILY I, LLC
     
  By: /s/ Karen G. Mills
  Name: Karen G. Mills
  Title: Management Member
  Address:   175 Blossom Street #1103
      Boston, MA 02114
     
  Fax Number:   [_______]
     
  K&BM LP  
  By: , its general partner
     
  By: /s/ Karen G. Mills
  Name: Karen G. Mills
  Title: Management Partner
  Address:   175 Blossom Street #1103
      Boston, MA 02114
  Fax Number:  
     
  GARDEN STATE:
   
  GARDEN STATE CAPITAL PARTNERS LLC
     
  By: /s/ Michael S. Klein
  Name: Michael S. Klein
  Title:
  Address:  
  Fax Number:  

 

[ Signature Page to Sponsor Agreement ]

 

 

 

 

ACCEPTED AND AGREED  
as of the date first written above:  
   
ACQUIROR:  
   
CHURCHILL CAPITAL CORP  
     
By: /s/ Michael S. Klein  
Name: Michael S. Klein  
Title:    
     
COMPANY:  
   
CAMELOT HOLDINGS (JERSEY) LIMITED  
     
By: /s/ Paul Edwards  
Name: Paul Edwards  
Title: Director  
     
HOLDINGS:  
   
CLARIVATE ANALYTICS PLC  
     
By: /s/ Paul Edwards  
Name: Paul Edwards  
Title: Director  

 

[ Signature Page to Sponsor Agreement ]

 

 

 

Exhibit 10.6

 

EXECUTION VERSION

 

CLARIVATE ANALYTICS PLC

 

AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT

 

Dated as of January 14, 2019

 

 

 

 

Table of Contents

 

    Page
     
ARTICLE I Certain Definitions 1
     
SECTION 1.1 Definitions 1
     
SECTION 1.2 Other Interpretive Provisions 5
     
ARTICLE II Corporate Governance 6
     
SECTION 2.1 Management 6
     
SECTION 2.2 Removal 8
     
SECTION 2.3 Vacancies 8
     
SECTION 2.4 Covenant to Vote 9
     
SECTION 2.5 Restrictions on Other Agreements 9
     
SECTION 2.6 Committees 9
     
SECTION 2.7 Additional Management Provisions 9
     
ARTICLE III Transfers of Shares 10
     
SECTION 3.1 Restrictions on Transfer 10
     
SECTION 3.2 Other Restricted Transfers 10
     
SECTION 3.3 Endorsement of Certificates 10
     
SECTION 3.4 Improper Transfer 11
     
ARTICLE IV Shareholders’ Rights AND OBLIGATIONS 11
     
SECTION 4.1 Tag-Along Rights 11
     
SECTION 4.2 Redemptions; Payment of Dividends 13
     
ARTICLE V Representations and Warranties 13
     
SECTION 5.1 Existence; Authority; Enforceability 13
     
SECTION 5.2 Absence of Conflicts 14
     
SECTION 5.3 Consents 14
     
ARTICLE VI Miscellaneous 14
     
SECTION 6.1 Information Rights; Books and Records; Inspection 14
     
SECTION 6.2 Freedom to Pursue Opportunities 15
     
SECTION 6.3 Termination 15
     
SECTION 6.4 Publicity and Confidentiality 15
     
SECTION 6.5 Acknowledgment 16
     
SECTION 6.6 Successors and Assigns; Benefit 16
     
SECTION 6.7 Severability 16

 

- i -  

 

 

Table of Contents

(continued)

 

    Page
     
SECTION 6.8 Amendment and Modification; Waiver of Compliance; Conflicts 16
     
SECTION 6.9 Notices 16
     
SECTION 6.10 Sponsor Agreements 17
     
SECTION 6.11 Entire Agreement 17
     
SECTION 6.12 Conflict with Articles 18
     
SECTION 6.13 Withholding 18
     
SECTION 6.14 Recapitalizations, Exchanges, Etc., Affecting the Shares; New Issuances 18
     
SECTION 6.15 Choice of Law; Remedies; Submission to Jurisdiction; Waiver of Jury Trial 18
     
SECTION 6.16 Counterparts 19
     
SECTION 6.17 Further Assurances; Company Logo 19
     
SECTION 6.18 Effectiveness 20
     
SECTION 6.19 Enforcement 20

  

- ii -  

 

 

EXHIBITS

 

Exhibit A Shareholder Schedule
   
Exhibit B Supplemental Signature Page

  

 

 

 

AMENDED AND RESTATED SHAREholders AGREEMENT

 

THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT, dated as of January 14, 2019, is made by and among (i) Camelot Holdings (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey (“ CHJL ”), (ii) Clarivate Analytics PLC, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), (iii) the parties listed under the heading “Onex Shareholders” on the Shareholder Schedule as of the date hereof (collectively, the “ Initial Onex Shareholders ”), (iv) the party listed under the heading “Baring Shareholders” on the Shareholder Schedule as of the date hereof (the “ Initial Baring Shareholder ”) and (v) the individuals listed from time to time under the heading “Management Shareholders” on the Shareholder Schedule (the “ Management Shareholders ”).

 

RECITALS

 

WHEREAS, the Company, CHJL, Churchill Capital Corp, a Delaware corporation, CCC Merger Sub, Inc., a Delaware corporation, and Camelot Merger Sub (Jersey) Limited, a private limited company organized under the laws of the Island of Jersey, are party to that certain Agreement and Plan of Merger, dated January 14, 2019 (as the same may be subsequently amended or modified, the “ Merger Agreement ”);

 

WHEREAS, CHJL, the Initial Onex Shareholders, the Initial Baring Shareholder and the Management Shareholders are party to the Shareholders Agreement, dated October 3, 2016, of CHJL (the “ Prior Agreement ”);

 

WHEREAS, as a result of the consummation of the transactions contemplated by the Merger Agreement, the Initial Onex Shareholders, the Initial Baring Shareholder and the Management Shareholders will become shareholders of the Company and will cease to be shareholders of CHJL, and CHJL will become a wholly owned Subsidiary (as defined below) of the Company; and

 

WHEREAS, in connection with the consummation of the transactions contemplated by the Merger Agreement, the Shareholders (as defined below) and CHJL desire to amend and restate the Prior Agreement in its entirety as set forth herein, and the Company desires to enter into this Agreement, in each case, effective as of the Closing (as defined below).

 

NOW, THEREFORE, in consideration of the foregoing, and the mutual agreements and understandings set forth herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

AGREEMENT

 

ARTICLE I

Certain Definitions

 

SECTION 1.1   Definitions . As used in this Agreement, the following terms shall have the following respective meanings:

 

 

 

  

Affiliate ” shall mean, with respect to any specified Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such specified Person. As used in this definition, the term “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. “Affiliates” with respect to the Onex Shareholders and the Baring Shareholders, respectively, shall not include the Company or its Subsidiaries.

 

Agreement ” shall mean this Amended and Restated Shareholders Agreement as in effect on the date hereof and as hereafter from time to time amended, modified or supplemented in accordance with the terms hereof.

 

Articles ” shall mean the articles of association of the Company as in effect on the date hereof and as hereafter from time to time amended in accordance with the terms hereof and thereof and pursuant to applicable law.

 

Baring ” shall mean Baring Private Equity Asia Group Limited, a Cayman Islands exempted company.

 

Baring Directors ” shall mean an individual elected to the Board of Directors that has been nominated or appointed by the Baring Shareholders pursuant to this Agreement. For the avoidance of doubt, each of Nicholas Macksey and one additional Baring Nominee to be designated by the Baring Shareholders prior to the Closing shall be deemed to have been nominated or appointed, as applicable, by the Baring Shareholders pursuant to this Agreement.

 

Baring Nominee ” shall have the meaning set forth in Section 2.1(a) .

 

Baring Shareholders ” shall mean (i) the Initial Baring Shareholder and its Permitted Transferees and (ii) any Affiliate of the Initial Baring Shareholder that hereafter acquires any Company Shares.

 

Beneficially Own ” shall have the meaning ascribed to it in Section 13(d) of the Exchange Act.

 

Blue Sky ” shall mean state securities regulation and requirements.

 

Board of Directors ” shall mean the board of directors of the Company, as duly constituted in accordance with this Agreement, the Articles and applicable law.

 

CHJL ” shall have the meaning specified in the Preamble.

 

Closing ” shall have the meaning specified in the Merger Agreement.

 

Code ” shall mean the United States Internal Revenue Code of 1986, as amended.

 

Company ” shall have the meaning specified in the Preamble.

 

  2  

 

  

Company Shares ” shall mean the ordinary shares of no par value in the capital of the Company and any shares or other securities into or for which such shares are hereafter converted or exchanged.

 

Consulting Services Agreements ” shall mean those certain consulting services agreements, dated as of October 3, 2016, entered into by Camelot UK Bidco Limited, a private limited liability company organized under the laws of England and Wales, with each of Onex and Baring, in each case, as amended.

 

Date of Delivery ” shall mean, for purposes of Article IV , the date that a particular notice is received or deemed to be received in accordance with Section 6.9 .

 

Director ” shall mean a member of the Board of Directors.

 

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended,

 

Exchange Act ” shall mean the U.S. Securities Exchange Act of 1934, as amended, or any similar federal statute then in effect, and a reference to a particular section thereof shall include a reference to the comparable section, if any, of such similar federal statute and the rules and regulations thereunder.

 

Initial Baring Shareholder ” shall have the meaning specified in the Preamble.

 

Initial Baring Shares ” shall mean the aggregate Company Shares Beneficially Owned by the Baring Shareholders immediately following the Closing.

 

Initial Onex Shareholders ” shall have the meaning specified in the Preamble.

 

Investor Directors ” shall mean the Baring Directors and the Onex Directors.

 

Investor Shareholders ” shall mean the Baring Shareholders and the Onex Shareholders.

 

Initial Shares ” shall mean the aggregate Company Shares Beneficially Owned by the Investor Shareholders immediately following the Closing.

 

Jersey Companies Law ” means the Companies (Jersey) Law 1991.

 

Management Shareholders ” shall have the meaning set forth in the Preamble.

 

Merger Agreement ” shall have the meaning specified in the Recitals.

 

Necessary Action ” shall mean, with respect to a specified result, all actions (to the extent such actions are permitted by law and do not conflict with the terms of this Agreement) necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Shares, (ii) causing the adoption of shareholders’ resolutions and amendments to the Articles, (iii) executing agreements and instruments, (iv) causing the members of the Board of Directors to take such actions (to the extent allowed by Jersey Companies Law and Delaware Law) and/or (v) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations, publications or similar actions that are required to achieve such result.

 

  3  

 

  

Nominee ” shall have the meaning set forth in Section 2.1(a) .

 

Onex ” shall mean Onex Partners Advisor LP, a Delaware limited partnership.

 

Onex Directors ” shall mean an individual elected to the Board of Directors that has been nominated or appointed by the Onex Shareholders pursuant to this Agreement. For the avoidance of doubt, each of Anthony Munk, Kosty Gilis, Paul Edwards, Jay Nadler, Karen Mills and two additional Onex Nominees to be designated by the Onex Shareholders prior to the Closing shall be deemed to have been nominated or appointed, as applicable, by the Onex Shareholders pursuant to this Agreement.

 

Onex Nominee ” shall have the meaning set forth in Section 2.1(a) .

 

Onex Shareholders ” shall mean (i) the Initial Onex Shareholders and their Permitted Transferees, (ii) any Affiliate of the Initial Onex Shareholders that hereafter acquires any Company Shares and (iii) any Person that hereafter acquires any Company Shares from one or more Onex Shareholders in a Transfer to which Section 4.1 applies.

 

Permitted Transferee ” shall mean (i) in the case of any Shareholder that is not an individual, any Affiliate of such Shareholder (including existing affiliated investment funds or vehicles that at all times remain Affiliates) and (ii) in the case of any Shareholder who is an individual, (A) any successor by death or (B) any trust, partnership, limited liability company or similar entity solely for the benefit of such individual or such individual’s spouse or lineal descendants, provided that such individual acts as trustee, general partner or managing member and retains the sole power to direct the voting and disposition of the transferred Company Shares.

 

Person ” shall be interpreted broadly and shall include any individual, corporation, company, limited liability company, association, partnership, joint venture, organization, business, trust, or any other entity or organization, including a government or governmental entity or department, agency or political subdivision thereof.

 

Prior Agreement ” shall have the meaning specified in the Recitals.

 

Public Offering ” shall have the meaning set forth in the Registration Rights Agreement.

 

Registration Rights Agreement ” shall mean the Amended and Restated Registration Rights Agreement to be entered into by and among the Company, the Initial Onex Shareholders, the Initial Baring Shareholder, the Management Shareholders and the other parties thereto, as amended, modified or supplemented from time to time in accordance with the terms thereof.

 

Representatives ” shall have the meaning specified in Section 6.4 .

 

Restricted Period ” shall mean the period from and including the date of this Agreement to and including October 3, 2021.

 

  4  

 

  

Sale Notice ” shall have the meaning specified in Section 4.1(b) .

 

SEC ” shall mean the U.S. Securities and Exchange Commission.

 

Securities Act ” shall mean the U.S. Securities Act of 1933, as amended, or any similar federal statute then in effect, and in reference to a particular section thereof shall include a reference to the comparable section, if any, of any such similar federal statute and the rules and regulations thereunder.

 

Shareholder ” shall mean any of the Onex Shareholders, the Baring Shareholders, the Management Shareholders and any Permitted Transferee of any such Person or other transferee of Company Shares who becomes a party to or bound by the provisions of this Agreement in accordance with the terms hereof.

 

Shareholder Schedule ” shall mean the Shareholder Schedule attached as Exhibit A hereto, as the same may be amended or modified from time to time.

 

Subsidiary ” shall mean, with respect to any specified Person, any other Person of which (i) a majority of shares of stock or other equity or economic interests are owned or controlled, directly or indirectly, through one or more intermediaries, by such specified Person or (ii) the outstanding shares of stock or other equity interests having voting power at such time to elect a majority of the board of directors or other comparable governing body of such Person, or to otherwise control such Person, are at the time owned or controlled by, directly or indirectly, one or more intermediaries, or both, by such specified Person.

 

Tag-Along Notice ” shall have the meaning specified in Section 4.1(c) .

 

Tag-Along Right ” shall have the meaning specified in Section 4.1(a) .

 

Tag-Along Shareholders ” shall have the meaning specified in Section 4.1(a) .

 

Third Party Terms ” shall mean (i) the name of the proposed transferee in a Transfer and the number of Company Shares proposed to be transferred in such Transfer, (ii) the proposed amount, type and form of per share consideration and the terms and conditions of payment offered by such transferee and (iii) a summary of any other material terms pertaining to such Transfer.

 

Transfer ” shall have the meaning set forth in Section 3.1 .

 

Transferring Shareholder ” shall have the meaning specified in Section 4.1(a) .

 

SECTION 1.2   Other Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b) The words “hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and Section references are to this Agreement unless otherwise specified.

 

  5  

 

  

(c) The term “including” is not limiting and means “including without limitation.”

 

(d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

(e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.

 

(f) The term “business day” means any date except Saturday or Sunday on which commercial banks are not required or authorized to close in New York, New York, United States or Jersey.

 

ARTICLE II

Corporate Governance

 

SECTION 2.1   Management . (a) Subject to the terms and conditions of this Agreement, from and after the Closing, (i) the Onex Shareholders shall have the right to designate up to seven (7) persons to be appointed or nominated, as the case may be, for election to the Board of Directors (including any successor, each, an “ Onex Nominee ”) and (ii) the Baring Shareholders shall have the right to designate up to two (2) persons to be appointed or nominated, as the case may be, for election to the Board of Directors (including any successor, each, a “ Baring Nominee ” and, together with the Onex Nominees, each a “ Nominee ”), in each case, by giving written notice to the Company not later than ten (10) days after such Shareholders’ receipt of written notice of the date of the applicable meeting of shareholders from the Company; provided , however, the initial Nominees shall be appointed as set forth in Section 2.1(b) .

 

(b) The Company and the Investor Shareholders shall take all Necessary Action such that, as of the Closing: (i) the size of the Board of Directors shall be set at fourteen (14) members; and (ii) the following persons, including the seven (7) Onex Nominees and the two (2) Baring Nominees, shall form the composition of the Board of Directors: (x) Jerre Stead, Nicholas Macksey, Anthony Munk, Kosty Gilis and Karen Mills to be designated by the Onex Shareholders prior to the Closing, each of whom shall be appointed as Class III Directors with terms ending at the third Annual Meeting of Shareholders following the Closing; (y) Jay Nadler, Paul Edwards, Michael Klein and one (1) additional Baring Nominee to be designated by the Baring Shareholders prior to the Closing, each of whom shall be appointed as Class II Directors with terms ending at the second Annual Meeting of Shareholders following the Closing; and (z) Bala Iyer, Martin Broughton, Sheryl von Blucher and two (2) additional Onex Nominees to be designated by the Onex Shareholders prior to the Closing, each of whom shall be appointed as Class I Directors with terms ending at the first Annual Meeting of Shareholders following the Closing.

 

(c) Subject to the terms and conditions of this Agreement, from and after the Closing, the Company and the Investor Shareholders shall, as promptly as practicable, take all Necessary Action so that:

 

  6  

 

  

(i)          for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than seventy percent (70%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to nine (9) less the number of Investor Directors who are not up for election;

 

(ii)         for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than sixty five percent (65%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to eight (8) less the number of Investor Directors who are not up for election;

 

(iii)        for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than sixty percent (60%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to seven (7) less the number of Investor Directors who are not up for election;

 

(iv)        for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than fifty five percent (55%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to six (6) less the number of Investor Directors who are not up for election;

 

(v)         for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than fifty percent (50%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to five (5) less the number of Investor Directors who are not up for election;

 

(vi)        for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than forty percent (40%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to four (4) less the number of Investor Directors who are not up for election;

 

(vii)       for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than thirty percent (30%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to three (3) less the number of Investor Directors who are not up for election;

 

(viii)      for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than twenty percent (20%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to two (2) less the number of Investor Directors who are not up for election; and

 

  7  

 

  

(ix)         for so long as the Investor Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than seven and one half percent (7.5%) of the total number of Initial Shares, the Investor Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to one (1) less the number of Investor Directors who are not up for election;

 

provided , however , that as between the Onex Shareholders and the Baring Shareholders, (A) for so long as the Baring Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than fifty percent (50%) of the total number of Initial Baring Shares, the Baring Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to two (2) less the number of Baring Directors who are not up for election, and (B) for so long as the Baring Shareholders Beneficially Own, in the aggregate, a number of Company Shares equal to or greater than twenty percent (20%) of the total number of Initial Baring Shares, the Baring Shareholders shall have the right to nominate, in the aggregate, a number of Nominees equal to one (1) less the number of Baring Directors who are not up for election, and, in each case, the Onex Shareholders shall have the right to nominate, in the aggregate, the other Nominees; provided , further , that for so long as the Onex Shareholders are entitled to nominate at least five (5) Onex Nominees, one of the Onex Nominees shall be the Chief Executive Officer of the Company.

 

(d) Subject to the Articles, an Onex Director or Baring Director may be removed from the Board of Directors or any comparable position from a Subsidiary board only upon the written request of the Onex Shareholders or Baring Shareholders, as applicable, entitled to designate such individual pursuant to this Section 2.1 .

 

(e) Any Director may resign at any time upon notice to the Company. Directors need not be Shareholders.

 

(f) The Company shall cause the Directors to be reimbursed for all reasonable out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors and any committees thereof, including travel, lodging and meal expenses, and the Company may provide reasonable compensation for service of Directors who are not full-time employees of (x) Onex or Baring or either of their respective Affiliates or (y) the Company or its Subsidiaries, in each case, to the extent permitted by the Jersey Companies Law.

 

SECTION 2.2   Removal . If any Investor Shareholder or group of Investor Shareholders that is entitled to designate an Onex Director or Baring Director, as applicable, hereunder notifies the Company and the other Investor Shareholders that such Investor Shareholder or group of Investor Shareholders desires to remove any Onex Director or Baring Director, as applicable, previously designated by such Investor Shareholder or group of Investor Shareholders, with or without cause, then such Director shall be removed from the Board of Directors and the parties shall take all Necessary Action to cause such removal of such Director, including voting all Company Shares in favor of, or executing a written consent authorizing, such removal.

 

SECTION 2.3   Vacancies . In the event that a vacancy is created on the Board of Directors at any time by the death, disability, retirement, resignation or removal of any Onex Director or Baring Director, each party shall take all Necessary Action as will result in the election or appointment as a Director of an individual designated to fill such vacancy and serve as a Director by the Onex Shareholders or Baring Shareholders, as applicable, that had, pursuant to Section 2.1 , designated the Director whose death, disability, retirement, resignation or removal resulted in such vacancy on the Board of Directors.

 

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SECTION 2.4   Covenant to Vote . The Company hereby agrees to take all Necessary Action to call, or cause the Board of Directors to call, a meeting of shareholders of the Company as may be necessary to cause the election as Directors of those individuals so designated in accordance with the provisions of this Article II . Each Investor Shareholder hereby agrees to take all Necessary Action to, and to vote all Company Shares owned or held of record by such Investor Shareholder at any such meeting of shareholders of the Company, or take all actions by written consent in lieu of any such meeting as may be necessary, to cause the Company to elect as Directors those individuals included in the slate of nominees proposed by the Board of Directors to the Company’s shareholders for each election of Directors, including the Nominees designated in accordance with this Article II , and to otherwise effect the intent of the provisions of this Article II .

 

SECTION 2.5   Restrictions on Other Agreements . No Investor Shareholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the Company Shares nor shall any Investor Shareholder enter into any other agreements or arrangements of any kind with any Person with respect to the Company Shares on terms which conflict with the provisions of this Agreement (whether or not such proxy, voting trust, agreements or arrangements are with other Shareholders that are not parties to this Agreement or otherwise).

 

SECTION 2.6   Committees . In accordance with the Articles, the Board of Directors may from time to time by resolution establish and maintain one or more committees of the Board of Directors, each committee to consist of one or more Directors. The Company shall notify the Onex Shareholders in writing of any new committee of the Board of Directors to be established at least five (5) days prior to the effective establishment of such committee. If requested by the Onex Shareholders, the Company shall take all necessary steps within its control to cause at least one Onex Director as requested by the Onex Shareholders to be appointed as a member of each such committee of the Board of Directors unless such designation would violate any legal restriction on such committee’s composition or the rules and regulations of any applicable exchange on which the Company’s securities may be listed (subject, in each case, to any applicable exceptions, including those for “controlled companies” and any applicable phase-in periods). This Section 2.6 shall automatically terminate and be of no further force and effect when the Investor Shareholders are no longer entitled to nominate three (3) or more Nominees.

 

SECTION 2.7   Additional Management Provisions . The parties hereby agree, notwithstanding anything to the contrary in any other agreement and to the fullest extent permitted by law, that when the Onex Shareholders and/or the Baring Shareholders take any action under this Agreement to give or withhold their consent in their respective capacity as the Shareholders, the Onex Shareholders and/or the Baring Shareholders, as applicable, shall have no duty (fiduciary or other) to consider the interests of the Company or its Subsidiaries or the other Company shareholders and may act exclusively in its own interest and shall have only the duty to act in good faith and engage in fair dealing; provided , however , that notwithstanding anything contained in this Section 2.7 , this Section 2.7 shall in no way affect the obligations of the parties hereto to comply with the provisions of this Agreement and the Articles or affect the duties of the Directors. Each party hereby waives, to the fullest extent permitted by law, all claims, actions or other rights to which such party might otherwise be entitled and agrees not to bring any claim or action (in law or equity) (other than with respect to breaches of contractual provisions under this Agreement) against any Onex Shareholder, any Baring Shareholder, the Company or any of the Company's Subsidiaries in connection with (a) a failure to fulfill a duty (fiduciary or other) to consider the interests of the Company, the Company's Subsidiaries or the other Company shareholders when taking any actions under this Agreement in accordance with the prior sentence in their capacity as Shareholders or (b) such Onex Shareholder’s or such Baring Shareholder’s actions taken in pursuit of its own interests ahead of the interests of the Company, the Company’s Subsidiaries or the other Shareholders; provided , in each case, that such Onex Shareholder or such Baring Shareholder, as applicable, has taken such actions in good faith and engaged in fair dealing.

 

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ARTICLE III

Transfers of Shares

 

SECTION 3.1   Restrictions on Transfer . Each Shareholder agrees that it will not, directly or indirectly, whether by operation of law or otherwise, offer, sell, transfer, assign or otherwise dispose of (or make any exchange, gift, assignment, charge or pledge of) any Company Shares or any rights or interests therein (collectively, a “ Transfer ”), except (a) with the prior written consent of the Onex Shareholders and the Baring Shareholders, (b) as provided in Section 4.1 , (c) to any Permitted Transferee of such Shareholder, (d) following the expiration of the Restricted Period and subject to Section 4.1 , Transfers by the Onex Shareholders, (e) in a Public Offering or (f) following the Closing, any Transfer by any Management Shareholder that is approved with the prior written consent of the Board of Directors; provided , that, in the case of each of the foregoing clauses (a), (b), (c) and (d), the transferee in question becomes a party to this Agreement and agrees to be bound hereby by executing a supplemental signature page to this Agreement in the form attached hereto as Exhibit B ; provided , further , that each Investor Shareholder agrees that it will not, directly or indirectly, whether by operation of law or otherwise, Transfer any Company Shares during the one hundred eighty (180) day period after the Closing (other than any Transfer to a Permitted Transferee of such Investor Shareholder).

 

SECTION 3.2   Other Restricted Transfers . Notwithstanding Section 3.1 , no Shareholder shall be entitled to Transfer its Company Shares at any time if such Transfer would:

 

(a) violate Jersey laws (including the Jersey Companies Law), the Securities Act, the Exchange Act or Blue Sky laws applicable to the Company or the Company Shares;

 

(b) cause the Company to become subject to the registration requirements of the U.S. Investment Company Act of 1940, as amended from time to time; or

 

(c) be a “prohibited transaction” under ERISA or the Code or cause all or any portion of the assets of the Company to constitute “plan assets” under ERISA or Section 4975 of the Code.

 

SECTION 3.3   Endorsement of Certificates . (a) In addition to any other legend which the Company may deem advisable under Jersey laws (including the Jersey Companies Law) or the Securities Act, all certificates, if any, representing issued and outstanding Company Shares shall bear the following legend:

 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.

 

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AMENDED AND RESTATED SHAREHOLDERS AGREEMENT BETWEEN THE ISSUER AND THE INITIAL HOLDER HEREOF DATED AS OF JANUARY 14, 2019. A COPY OF SUCH AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.

 

(b) All certificates, if any, representing Company Shares hereafter issued to or acquired by any of the Shareholders or their successors hereto shall bear the legend set forth above.

 

SECTION 3.4   Improper Transfer . (a) Any attempt to Transfer or encumber any Company Shares not in accordance with this Agreement shall be null and void and neither the Company nor any transfer agent of such securities shall give any effect to such attempted Transfer or encumbrance in its Company Share register.

 

(b) If any Shareholder Transfers any Company Shares to any Permitted Transferee that is an Affiliate of such Shareholder pursuant to Section 3.1(c) and such Permitted Transferee subsequently ceases to be an Affiliate of such Shareholder at any time thereafter, then such Company Shares shall automatically be Transferred back to such initial Shareholder without any action on the part of such initial Shareholder or Permitted Transferee.

 

ARTICLE IV

Shareholders’ Rights AND OBLIGATIONS

 

SECTION 4.1   Tag-Along Rights . (a) At any time following the expiration of the Restricted Period, if one or more Onex Shareholders propose to Transfer (other than a Transfer (x) to any Permitted Transferee of such Onex Shareholder or (y) in a Public Offering or in a distribution to the public under Rule 144 of the Securities Act) all or any portion of the Company Shares then held by such Onex Shareholder(s) (the Onex Shareholder(s) proposing such Transfer being the “ Transferring Shareholder ”), then the provisions of this Section 4.1 shall apply. In such event, the Baring Shareholders (the “ Tag-Along Shareholders ”) shall have the right (the “ Tag-Along Right ”) to sell in their discretion up to the same percentage of such Tag-Along Shareholders’ Company Shares as the Transferring Shareholder is proposing to sell in such Transfer by requesting that the transferee in such Transfer purchase from each such Tag-Along Shareholder up to the number of Company Shares equal to the number derived by multiplying (i) the total number of Company Shares that the transferee has agreed or committed to purchase from the Transferring Shareholder by (ii) a fraction, the numerator of which is the total number of Company Shares owned by such Tag-Along Shareholder, and the denominator of which is the total number of Company Shares then held by the Investor Shareholders. Any Company Shares purchased from Tag-Along Shareholders pursuant to this Section 4.1(a) shall be purchased upon the same terms and conditions (including timing of purchase and payment and the type and form of consideration) as such proposed Transfer by such Transferring Shareholder.

 

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(b) If any Onex Shareholder proposes to make a Transfer triggering the Tag-Along Right, such Transferring Shareholder shall send a written notice (each, a “ Sale Notice ”) to all Tag-Along Shareholders at least thirty (30) days prior to the date on which such Transferring Shareholder expects to consummate such Transfer. Each Sale Notice shall set forth the Third Party Terms applicable to the proposed Transfer, the maximum number of Company Shares the Tag-Along Shareholder to whom the Sale Notice is delivered is entitled to sell pursuant to the Tag-Along Right (including the calculation of such participant’s pro rata portion) and the anticipated closing date of the Transfer, and shall be accompanied by a copy of any written documents reflecting the terms and conditions agreed to by the Transferring Shareholder and the transferee.

 

(c) Each Tag-Along Shareholder that desires to exercise the Tag-Along Right shall deliver a written notice (each, “ Tag-Along Notice ”) to that effect to the Transferring Shareholder within twenty (20) days following receipt of the Sale Notice from such Transferring Shareholder. The Tag-Along Notice shall state the number of Company Shares (not to exceed the amount determined in accordance with Section 4.1(a) ) that such Tag-Along Shareholder proposes to include in such Transfer, and shall constitute the Tag-Along Shareholder’s binding agreement to sell its Company Shares on the terms and subject to the conditions as are specified in or accompany the Sale Notice. If the transferee does not purchase the specified number of Company Shares from the Tag-Along Shareholders on the same terms and conditions as specified in the Sale Notice and at the same time as the transferee purchases Company Shares from such Transferring Shareholder, then such Transferring Shareholder shall not be entitled to sell any Company Shares in the proposed Transfer unless such Transferring Shareholder or its designee substantially concurrently purchases from each such Tag-Along Shareholder the number of Company Shares of such Tag-along Shareholder as is specified in its Tag-Along Notice, on the Third Party Terms.

 

(d) At the closing of the Transfer pursuant to this Section 4.1 , the transferee shall remit to each Tag-Along Shareholder the consideration for the Company Shares of such Tag-Along Shareholder sold pursuant hereto (less any such consideration to be escrowed or otherwise held back in accordance with the Third Party Terms; provided , however , that such escrow or hold back is pro rata among all sellers of Company Shares participating in such transaction based on the number of Company Shares being sold by each such seller in the transaction), against delivery by such Tag-Along Shareholder of certificates (if any) representing such Company Shares, duly endorsed for Transfer or with duly executed stock powers or similar instruments, or such other instrument of Transfer of such Company Shares as may be reasonably requested by the transferee or the Company, and the compliance by such Tag-Along Shareholder with any other conditions to closing generally applicable to all Investor Shareholders selling Company Shares in such transaction; provided , that (i) no such condition shall require a Tag-Along Shareholder to undertake or agree to bear joint and several liability with any other party thereto or to bear more than such Tag-Along Shareholder’s proportionate share of any indemnification obligations or be liable in respect of any individual representations, covenants or warranties made solely with respect to another Shareholder, including with respect to title, authority, non-contravention and power to transfer equity (in each case, other than through a common escrow), (ii) no Tag-Along Shareholder shall be liable in respect of any post-closing indemnification in excess of the aggregate amount of proceeds received by such Tag-Along Shareholder in connection with such Transfer and (iii) no such condition shall require a Tag-Along Shareholder to enter into any agreement not to compete with the Company or any of its Subsidiaries, or commit to any similar obligation, in connection with the Transfer.

 

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(e) If any Transfer described in a Sale Notice has not been consummated in accordance with the terms set forth in the Sale Notice within one hundred and eighty (180) days after the Date of Delivery of the Sale Notice, or if (i) the terms of such proposed Transfer have been modified in any respect that would increase the per share price or (ii) the other non-monetary terms of such proposed Transfer shall have been changed in any material respect from those set forth in the Sale Notice, such Transfer may not be completed without first providing a new Sale Notice to the Tag-Along Shareholders and allowing another opportunity for such Tag-Along Shareholders to elect to exercise their Tag-Along Right set forth in this Section 4.1 .

 

SECTION 4.2   Redemptions; Payment of Dividends . Notwithstanding anything contained herein to the contrary, as between the Company and the Investor Shareholders, if (i) the Company redeems any Company Shares held by any Investor Shareholder, then such redemption of Company Shares shall be done on a pro rata basis from all Investor Shareholders based on the number of Company Shares held by each Investor Shareholder and (ii) the Company pays any dividend or other distribution to the Investor Shareholders, other than in cash, each Investor Shareholder shall receive the same type and form of payment, on the same timing.

 

ARTICLE V

Representations and Warranties

 

Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party executes this Agreement:

 

SECTION 5.1   Existence; Authority; Enforceability . Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder. If such party is not a natural person, such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by such party and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws relating to or affecting creditors’ rights generally, or by the general principles of equity.

 

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SECTION 5.2   Absence of Conflicts . The execution and delivery by such party of this Agreement and the performance of its obligations hereunder does not and will not (i) conflict with, or result in the breach of, any provision of the constitutive documents of such party (if applicable); (ii) result in any violation, breach, conflict, default or event of default (or an event which with notice, lapse of time, or both, would constitute a default or event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected; or (iii) violate any law applicable to such party.

 

SECTION 5.3   Consents . Other than any of those which have already been made or obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with the execution, delivery or performance of this Agreement.

 

ARTICLE VI

Miscellaneous

 

SECTION 6.1   Information Rights; Books and Records; Inspection . (a) The books and records of the Company shall be maintained in the Company’s office in the United Kingdom and shall be available for inspection by the Investor Shareholders. The Company shall, and shall cause its Subsidiaries to, (i) afford the Investor Shareholders and their respective agents access at all reasonable times to its officers, employees, auditors, legal counsel, properties, offices and other facilities and to all of its books and records and (ii) afford the Investor Shareholders and their respective agents with the opportunity to consult with its officers from time to time as the Investor Shareholders may reasonably request regarding the affairs, finances and accounts of the Company and its Subsidiaries.

 

(b) The Company shall provide the Investor Shareholders with any and all financial and other information relating to its business (including financial statements and other financial information, consistent with the form and timing such financial statement and information are regularly produced by the Company) reasonably requested by the Investor Shareholders, including such information as may be necessary to comply with regulatory or other governmental filings. Without limiting the generality of the foregoing, the Company shall cooperate with the Investor Shareholders as reasonably requested in connection with the preparation and filing of any tax returns, the conduct of any tax audits or other proceedings and the compliance with any other tax obligations relating to the Company and its Subsidiaries, including by promptly providing the Investor Shareholders with any information and documentation reasonably necessary in connection with such tax returns, audits, proceedings or other obligations.

 

(c) For so long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any Shareholder at the principal place of business of the Company.

 

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(d) Each Investor Shareholder acknowledges that it is aware (and that its Representatives are aware or, upon receipt of any confidential, non-public information regarding the Company, its Subsidiaries and its and their respective businesses, will be advised by such Shareholder) that (i) any confidential, non-public information regarding the Company, its Subsidiaries and its and their respective businesses being furnished to it or its Representatives may contain material, non-public information and (ii) the United States securities laws prohibit any Persons who have material, non-public information about a company from purchasing or selling securities of such company or from communicating such information to any Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities in reliance upon such information.

 

SECTION 6.2   Freedom to Pursue Opportunities . The parties expressly acknowledge and agree that: (i) the Onex Shareholders, the Baring Shareholders, each Onex Director who is an employee of Onex or any Affiliate of Onex, each Baring Director who is an employee of Baring or any Affiliate of Baring and their respective Affiliates shall have the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly, engage in the same or similar business activities or lines of business as the Company or its Subsidiaries, including those deemed to be competing with the Company or its Subsidiaries; and (ii) in the event that any Onex Shareholder, any Baring Shareholder, any such Onex Director, any such Baring Director or any of their respective Affiliates acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both the Company or its Subsidiaries and such Shareholder, Director or any other Person, the Shareholder, Director or Affiliate thereof, as applicable, shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company or its Subsidiaries, as the case may be, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company or its Subsidiaries or their respective Affiliates or equityholders for breach of any duty (contractual or otherwise) by reason of the fact that such Shareholder, Director or Affiliate, as applicable, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present such opportunity to the Company or its Subsidiaries, unless, in the case of this clause (ii), such corporate opportunity is expressly offered to an Onex Director or Baring Director in writing solely to such Person in his or her capacity as a Director.

 

SECTION 6.3   Termination . This Agreement shall terminate and be of no further force and effect upon the written agreement of the Company and the Investor Shareholders (but only for so long as any Investor Shareholder holds any Company Shares) to terminate this Agreement; provided that such termination shall not release any party of any liability for any breach of this Agreement occurring prior to such termination.

 

SECTION 6.4   Publicity and Confidentiality . Each Shareholder shall keep confidential this Agreement and shall not disclose, issue any press release or otherwise make any public statement in connection herewith without the prior written consent of the Investor Shareholders (not to be unreasonably withheld) unless so required by applicable law, any governmental authority or stock exchange rule or regulation or for those provisions which are or will be replicated in the Articles or are otherwise publicly disclosed or made a matter of public record; provided that no such written consent shall be required (and each Investor Shareholder shall be free to release such information) for disclosures of such information or other confidential, non-public information regarding the Company, its Subsidiaries and its and their respective businesses or otherwise to (i) each Investor Shareholder’s partners, members, advisors, employees, agents, prospective investors, accountants or attorneys so long as such Persons agree to keep such information confidential (such Persons, the “ Representatives ”) or (ii) any prospective purchaser of any Company Shares from an Onex Shareholder, to the extent that such prospective purchaser agrees to keep such information confidential. Each party agrees and acknowledges that the Onex Directors and the Baring Directors may share confidential, non-public information about the Company and its Subsidiaries with the Onex Shareholders, the Baring Shareholders and each of their respective Representatives, and otherwise in accordance with the immediately preceding sentence, subject to applicable law.

 

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SECTION 6.5   Acknowledgment . Each Shareholder acknowledges and agrees that the provisions of this Agreement have been reviewed and are understood by such Shareholder, and expresses the will and intention of such Shareholder and agrees not to take any action to frustrate the purposes and provisions of this Agreement.

 

SECTION 6.6   Successors and Assigns; Benefit . Except as otherwise provided herein, all of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and permitted assigns of the parties hereto. The Company may not assign any of its rights hereunder other than by operation of law. If any transferee of any Shareholder shall acquire any Company Shares, in any manner, whether by operation of law or otherwise, except in a Public Offering or in a distribution to the public under Rule 144 of the Securities Act, such Company Shares shall be held subject to all of the terms of this Agreement, and by taking and holding such Company Shares such Person shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement. There shall be no third-party beneficiaries to this Agreement.

 

SECTION 6.7   Severability . In the event that any provision of this Agreement shall be invalid, illegal or unenforceable, such provision shall be construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 6.8   Amendment and Modification; Waiver of Compliance; Conflicts . (a)  This Agreement may be amended only by a written instrument duly executed by the Company and the Investor Shareholders (but only for so long as any Investor Shareholder holds any Company Shares); provided , however , that Exhibit A to this Agreement may be amended at any time by the Company to add as a party hereto any Person that acquires any Company Shares in compliance with the terms of this Agreement and executes a supplemental signature page hereto in the form attached as Exhibit B .

 

(b) Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

 

SECTION 6.9   Notices . Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile, or first class mail, or by Federal Express, United Parcel Service or other similar courier or other similar means of communication, as follows:

 

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(i)          If to the Company, addressed to it at Friars House, 160 Blackfriars Road, London, SE1 8EZ, United Kingdom, Attention: General Counsel; with a copy (which shall not constitute notice) to Latham & Watkins LLP, 555 Eleventh Street, NW, Suite 1000, Washington, DC 20004; Attention: Paul Sheridan and Shaun Hartley; Facsimile: (202) 637-2201

 

(ii)         If to the Onex Shareholders, addressed to Onex Partners, 161 Bay Street, Suite 4900, Toronto, ON M5J 2S1; Attention: Kosty Gilis and Andrea Daly; Facsimile: (416) 362-5705; with a copy (which shall not constitute notice) to Latham & Watkins LLP, 555 Eleventh Street, NW, Suite 1000, Washington, DC 20004; Attention: Paul Sheridan and Shaun Hartley; Facsimile: (202) 637-2201;

 

(iii)        If to the Baring Shareholders, addressed to Baring Private Equity Asia Pte Limited, 50 Collyer Quay, #11-03/04 OUE Bayfront, Singapore 049321; Attention: Patrick Cordes and Nicholas Macksey; Facsimile: +65 6532 0660; with a copy (which shall not constitute notice) to Ropes & Gray LLP, 191 N. Wacker Drive, 32 nd Floor, Chicago, IL 60606; Attention: Neill Jakobe and Timothy Castelli; Facsimile: (312) 845-5505;

 

(iv)        If to a Shareholder other than the Onex Shareholders or the Baring Shareholders, to the address of such Shareholder set forth in the share register of the Company;

 

or, in each case, to such other address or facsimile number as such party may designate in writing to each other party hereto by written notice given in the manner specified herein.

 

All such communications shall be deemed to have been given, delivered or made when so delivered by hand or sent by facsimile (with confirmed transmission), on the next business day if sent by overnight courier service (with confirmed delivery) or when received if sent by first class mail.

 

SECTION 6.10   Sponsor Agreements . The Investor Shareholders hereby agree to cause Onex and Baring to terminate each of the Consulting Services Agreements in accordance with Section 8.04 of the Merger Agreement.

 

SECTION 6.11   Entire Agreement . The provisions of this Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire agreement among the parties hereto with respect to the subject transactions contemplated hereby and thereby and supersede all prior oral and written agreements and memoranda and undertakings among the parties hereto with regard to such subject matter.

 

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SECTION 6.12   Conflict with Articles . In the event of a conflict between the Articles and this Agreement, it is expressly agreed that as between the Shareholders this Agreement shall prevail and the parties shall use reasonable best efforts to amend the Articles to be consistent with this Agreement. In the event of a conflict between the provisions of Jersey law and this Agreement (or any conflict with Delaware law), the parties shall cooperate to effectuate the provisions of this Agreement in accordance with, and take such actions as may be required to satisfy, the requirements of Jersey law (or Delaware law, as applicable), including taking all Necessary Action to fully effectuate the intents and purposes of this Agreement while satisfying any requirement of Jersey law (or Delaware law, as applicable). For the avoidance of doubt, nothing contained in this Agreement shall be deemed to constitute an amendment of the Articles or of any previous articles of association of the Company. Notwithstanding any other provisions of this Agreement, to the extent not inconsistent with the Articles and the Jersey Companies Law (or Delaware law), the Company undertakes to be bound by and comply with the terms and conditions of this Agreement insofar as the same relates to the Company and any Subsidiaries of the Company and to act in all respects as contemplated by this Agreement.

 

SECTION 6.13   Withholding . Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to deduct and withhold from any payment made by it to any Shareholder such amounts, if any, as are required to be deducted and withheld under applicable tax law; provided , that the Company shall (a) use commercially reasonable efforts to notify the applicable Investor Shareholder in writing of such withholding no later than five (5) business days prior to the date on which the applicable payment is to be made and (b) cooperate in good faith with such Investor Shareholder to allow the claiming of an available exemption from or reduction in any such deduction or withholding. To the extent that any such amounts are withheld and paid over by the Company to the applicable taxing authority, such amounts shall be treated as having been paid to the Shareholder in respect of which the withholding was made.

 

SECTION 6.14   Recapitalizations, Exchanges, Etc., Affecting the Shares; New Issuances . The provisions of this Agreement shall apply, to the fullest extent set forth herein, with respect to the Company Shares and to any and all equity or debt securities of the Company or any successor or assign of the Company (whether by merger, amalgamation, consolidation, sale of assets, or otherwise) which may be issued in respect of, in exchange for, or in substitution of, the Company Shares and shall be appropriately adjusted for any share dividends, splits, reverse splits, combinations, subdivisions, reclassifications, recapitalizations, reorganizations and the like occurring after the date hereof.

 

SECTION 6.15   Choice of Law; Remedies; Submission to Jurisdiction; Waiver of Jury Trial . To the greatest extent permitted by Jersey law, this Agreement and any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of such state or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Delaware.

 

EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF FORUM SET FORTH IN THIS SECTION BELOW SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OF A COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION BELOW, OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT, IN ANY OTHER APPROPRIATE JURISDICTION.

 

  18  

 

 

IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (A) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY SUCH LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE LOCATED IN WILMINGTON, DELAWARE, OR, IF UNDER APPLICABLE LAW EXCLUSIVE JURISDICTION IS VESTED IN THE U.S. FEDERAL COURTS, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE (AND APPELLATE COURTS THEREOF); (B) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE); (C) AGREE TO WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT FORUM; (D) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT; (E) AGREE TO SERVICE OF PROCESS IN ANY SUCH LITIGATION, PROCEEDING OR ACTION BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (F) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (G) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

SECTION 6.16   Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

SECTION 6.17   Further Assurances; Company Logo . At any time or from time to time after the date hereof, the parties hereto agree to cooperate with each other, and at the request of the Company and each of the Investor Shareholders, to execute and deliver any further instruments or documents and to take all such further action as may be so reasonably requested in order to evidence or effectuate the provisions of this Agreement and to otherwise carry out the intent of the parties hereunder. The Company hereby grants the Onex Shareholders, the Baring Shareholders and their respective Affiliates permission to use the Company’s and each of its Subsidiaries’ name and logo in marketing materials related to their respective investment advisory or investment management businesses.

 

  19  

 

  

SECTION 6.18   Effectiveness . This Agreement shall become effective solely upon (a) execution of this Agreement by each of the Company, CHJL and the Investor Shareholders and (b) the consummation of the Closing. In the event that the Merger Agreement is terminated for any reason without the Closing having occurred, this Agreement shall not become effective, shall be void ab initio and the Prior Agreement shall continue in full force and effect without amendment or restatement.

 

SECTION 6.19   Enforcement . The parties acknowledge and agree that, if a party is not performing its obligations hereunder or is otherwise in breach of this Agreement, in addition to and without limiting the rights of the parties hereunder, a majority of the Directors who are “independent” pursuant to the listing standard of the New York Stock Exchange shall have the right to seek enforcement of this Agreement and the obligations of the parties hereunder.

 

*     *    *

 

  20  

 

 

IN WITNESS WHEREOF, each of the undersigned has signed this Agreement as of the date first above written:

 

  CAMELOT HOLDINGS (JERSEY) LIMITED
     
  By: /s/ Paul Edwards
    Name: Paul Edwards
    Title:   Director
     
  CLARIVATE ANALYTICS PLC
     
  By: /s/ Paul Edwards
    Name: Paul Edwards
    Title:   Director

 

Signature Page to Shareholders Agreement

 

 

 

 

  ONEX ADVISOR SUBCO LLC
       
  By: /s/ Joel Greenberg
    Name:   Joel Greenberg
    Title: Director
       
  By: /s/ Marci Settle
    Name:   Marci Settle
    Title: Director
       
  ONEX PARTNERS HOLDINGS LIMITED
  S.À R.L.
       
  By: /s/ Joshua Hausman
    Name:   Joshua Hausman
    Title: Type A Manager
       
  By: /s/ Oliver Dorier
    Name:   Oliver Dorier
    Title: Type B Manager
       
  ONEX PARTNERS IV LP
       
  By: Onex Partners IV GP LP, its general partner
     
  By: Onex Partners Manager LP, its agent
     
  By: Onex Partners Manager GP ULC, its general partner
       
  By: /s/ Joshua Hausman
    Name:   Joshua Hausman
    Title: Managing Director
       
  By: /s/ Matthew Ross
    Name:   Matthew Ross
    Title: Managing Director

 

Signature Page to Shareholders Agreement

 

 

 

  

  ONEX PARTNERS IV PV LP
       
  By: Onex Partners IV GP LP, its general partner
     
  By: Onex Partners IV GP LLC, its general partner
       
  By: /s/ Joshua Hausman
    Name:   Joshua Hausman
    Title: Managing Director
       
  By: /s/ Matthew Ross
    Name:   Matthew Ross
    Title: Managing Director

 

Signature Page to Shareholders Agreement

 

 

 

  

  ONEX PARTNERS IV SELECT LP
       
  By: Onex Partners IV GP LLC, its general partner
       
  By: /s/ Joshua Hausman
    Name: Joshua Hausman
    Title: Managing Director
       
  By: /s/ Matthew Ross
    Name: Matthew Ross
    Title: Managing Director
       
  ONEX PARTNERS IV GP LP
       
  By: Onex Partners Manager LP, its agent
     
  By: Onex Partners Manager GP ULC, its general partner
       
  By: /s/ Joshua Hausman
    Name: Joshua Hausman
    Title: Managing Director
       
  By: /s/ Matthew Ross
    Name: Matthew Ross
    Title: Managing Director
       
  ONEX US PRINCIPALS LP
       
  By: Onex US Principals GP LLC
       
  By: /s/ Joshua Hausman
    Name: Joshua Hausman
    Title: Director

 

Signature Page to Shareholders Agreement

 

 

 

  

  ONEX CAMELOT CO-INVEST LP
       
  By: Onex Partners IV GP LP, its general partner
     
  By: Onex Partners Manager LP, its agent
     
  By: Onex Partners Manager GP ULC, its general partner
       
  By: /s/ Joshua Hausman
    Name: Joshua Hausman
    Title: Managing Director
       
  By: /s/ Matthew Ross
    Name: Matthew Ross
    Title: Managing Director

 

Signature Page to Shareholders Agreement

 

 

 

  

  ELGIN INVESTMENT HOLDINGS LIMITED
       
  By: /s/ Tariq Syed Usman
    Name: Tariq Syed Usman
    Title: Alternate Director to Caroline Baker

   

Signature Page to Shareholders Agreement

 

 

 

 

EXHIBIT A

 

Shareholder SCHEDULE

 

As of [ · ], 2019 1

 

Onex Shareholders   Company Shares
Onex Advisor Subco LLC   ·  ]
Onex Partners Holdings Limited S.À R.L.   ·  ]
Onex Partners IV LP   ·  ]
Onex Partners IV PV LP   ·  ]
Onex Partners IV Select LP   ·  ]
Onex Partners IV GP LP   ·  ]
Onex US Principals LP   ·  ]
Onex Camelot Co-Invest LP   ·  ]
Total Onex Shareholders   ·  ]
     
Baring Shareholders   Company Shares
Elgin Investment Holdings Limited   ·  ]
Total Baring Shareholders   ·  ]
     
Management Shareholders   Company Shares
David Lee Kockalko   ·  ]
Kevin Joseph Mc Curry   ·  ]
Richard Hanks   ·  ]
Chawki Hassoun   ·  ]

 

 

1 Note : The parties acknowledge that Schedule A shall be completed following the Closing.

 

 

 

  

Ronda Sue Majure   ·  ]
Vicky Harris   ·  ]
Christopher Sean McKenna   ·  ]
Stuart Justin Recher   ·  ]
Stephen Paul Hartman   ·  ]
Vincent Joseph Caraher   ·  ]
Nadler Family Investments LLC   ·  ]
Nagaraju Bandaru   ·  ]
Brian J. Binsfeld   ·  ]
Janice Eisenberg Read   ·  ]
Daniel Irvin Videtto III   ·  ]
Kathleen Ann Sullivan   ·  ]
Richard William Neale   ·  ]
Hemant Suresh Gandhi   ·  ]
Jeremy Maben Lawson   ·  ]
Vijayshree Krishnan   ·  ]
Charles J. Neral   ·  ]
Andrew Ryan Hillary Preston   ·  ]
Eric Wilhelm Yan   ·  ]
Jeffrey Laurier Roy   ·  ]
Annette Christina Thomas   ·  ]
Yasemin Guzide Agatan   ·  ]
Christine Elizabeth Archbold   ·  ]

 

 

 

  

Andrea Joy Degutis   ·  ]
Andrew Graham Wright   ·  ]
Biao Wang   ·  ]
Jan-Eric Reichelt   ·  ]
Benjamin Sean Kaube   ·  ]
Todd David Fegan   ·  ]
Nikola Vujic   ·  ]
Jeffrey Charles Mastendino   ·  ]
Francis Thomas Paleno Jr.   ·  ]
Ian Benedict MacLochlainn   ·  ]
David Curtin Brown   ·  ]
Jeffrey Scott Huntsman   ·  ]
Total Management Shareholders   ·  ]
Total All Shareholders   ·  ]

 

 

 

 

EXHIBIT B

 

SIGNATURE PAGE
TO
SHAREHOLDERS AGREEMENT

 

By execution of this signature page, [Name] hereby agrees to become a party to, and to be bound by the obligations of, and receive the benefits of, that certain Amended and Restated Shareholders Agreement, dated as of January 14, 2019, by and among Clarivate Analytics PLC, a public limited company organized under the laws of Jersey, and certain other parties named therein, as amended from time to time thereafter, as a[n] [Onex] [Baring] [Management] “Shareholder” under such agreement.

 

   
  [Name]
   
  Notice Address:
   
   
   
   

 

ACCEPTED AS OF [__], 20[__]:  
   
CLARIVATE ANALYTICS PLC  
     
By:    
Name:      
Title:    

 

 

 

Exhibit 10.8

 

 

 

TAX RECEIVABLE AGREEMENT

 

by and among

 

CAMELOT HOLDINGS (JERSEY) LIMITED

 

TRA PARTY REPRESENTATIVE (as defined herein) and

 

THE TRA PARTIES (as defined herein)

FROM TIME TO TIME PARTY HERETO

 

Dated as of [__________], 2019

 

 

 

 

 

 

CONTENTS

 

  Page  
     
Article I. DEFINITIONS 1
     
Section 1.1 Definitions 1
     
Article II. DETERMINATION OF REALIZED TAX BENEFIT 8
     
Section 2.1 Covered Tax Assets 8
Section 2.2 Tax Benefit Schedule 9
Section 2.3 Procedures, Amendments 10
     
Article III. TAX BENEFIT PAYMENTS 11
     
Section 3.1 Payments 11
Section 3.2 Offsets 12
Section 3.3 No Duplicative Payments 12
Section 3.4 Change Notices 12
     
Article IV. TERMINATION 14
     
Section 4.1 Early Termination of Agreement; Breach of Agreement; Credit Events 14
Section 4.2 Early Termination Notice 15
Section 4.3 Payment upon Early Termination 15
     
Article V. COMPANY OBLIGATIONS AND LATE PAYMENTS 16
     
Section 5.1 Company Obligations. 16
Section 5.2 Late Payments by the Company 16
     
Article VI. Company Tax Matters; Consistency; Cooperation 17
     
Section 6.1 Participation in Company Tax Matters 17
Section 6.2 Cooperation 17
     
Article VII. Miscellaneous 17
     
Section 7.1 Notices 17
Section 7.2 Counterparts 18
Section 7.3 Entire Agreement; Third-Party Beneficiaries 18
Section 7.4 Governing Law 18
Section 7.5 Severability 19
Section 7.6 Headings 19
Section 7.7 Setoff 19
Section 7.8 Successors; Assignment; Amendments; Waivers 19

 

  i

 

 

Section 7.9 Titles and Subtitles 20
Section 7.10 Waiver of Jury Trial 20
Section 7.11 Reconciliation 20
Section 7.12 Withholding 21
Section 7.13 Affiliated Corporations; Admission of the Company into a Consolidated Group; Transfers of Corporate Assets 21
Section 7.14 Tax Treatment 22
Section 7.15 TRA Party Representative 22
Section 7.16 Non-Effect of Other Tax Receivable Agreements 24
Section 7.17 Subsidiary Distributions 24
Section 7.18 Tax Return Standards 24

 

Exhibits

 

Exhibit A - Form of Joinder Agreement

  

  ii

 

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), dated as of [________], 2019, is hereby entered into by and among Camelot Holdings (Jersey) Limited, a limited company organized under the laws of the Island of Jersey (the “ Company ”), Onex Partners IV LP, a Cayman Islands exempted limited partnership (along with any successor as provided in Section 7.15, the “ TRA Party Representative ”), and the parties listed on Schedule A, as such schedule is amended from time to time (each, a “ TRA Party ”). Capitalized terms used herein have the respective meanings set forth in Section 1.1.

 

RECITALS

 

WHEREAS, the TRA Parties as of the date hereof are record owners of all of the ordinary shares in the capital of the Company;

 

WHEREAS, after the date hereof, the Company and its Subsidiaries (the “ Company Group ”) will be entitled to utilize certain Tax assets, Tax deductions or other Tax attributes (as more fully described herein, the “ Covered Tax Assets ”);

 

WHEREAS, the income, gain, loss, expenses, deductions and other Tax items of the Company Group may be affected by the Covered Tax Assets; and

 

WHEREAS, the Company has agreed to make payments to the TRA Parties in respect of the aggregate reduction in Taxes payable by the Company Group as a result of the utilization (or deemed utilization) of the Covered Tax Assets on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

Article I.

DEFINITIONS

 

Section 1.1            Definitions . As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both (i) the singular and plural and (ii) the active and passive forms of the terms defined).

 

Acquisition ” means the acquisitions contemplated by that certain Stock and Asset Purchase Agreement, dated July 10, 2016, as amended, among Camelot UK Bidco Limited, Thomson Reuters Corporation, Thomson Reuters Global Resources and Thomson Reuters U.S. LLC.

 

Actual Tax Liability ” means, with respect to the Covered Tax Periods for a given calendar year, the Tax liability of the Company Group for such Covered Tax Periods, applying the principles in Section 2.2(b) and assuming a U.S. state and local income tax rate equal to the Assumed State Rate.

 

  1  

 

 

Advisory Firm ” means any law firm or accounting firm mutually selected by the Company and the TRA Party Representative that is nationally recognized as being expert in Tax matters and is not an Affiliate of the Company or the TRA Party Representative.

 

Advisory Firm Letter ” means a letter from the Advisory Firm stating that the relevant schedule, notice or other information to be provided by the Company to the TRA Parties and all supporting schedules and work papers were prepared in a manner consistent with the terms of this Agreement and, to the extent not expressly provided in this Agreement, on a reasonable basis in light of the facts and applicable law in existence on the date to which such schedule, notice or other information relates.

 

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, such first Person.

 

Agreed Rate ” means, (i) with respect to any applicable period, the highest rate applicable to drawings under any senior revolving credit facility of the Company and its Subsidiaries during such period + 100 basis points, (ii) if no rate is available under clause (i) for the applicable period, the highest rate applicable to term loans of the Company and its Subsidiaries during such period + 100 basis points, and (iii) if no rate is available under clause (i) or (ii) during such period a rate equal to LIBOR + 400 basis points.

 

Agreement ” is defined in the preamble.

 

Amended Schedule ” is defined in Section 2.3(b) of this Agreement.

 

Applicable Percentage ” means, with respect to a TRA Party, the percentage set forth opposite such TRA Party’s name on Schedule A (as such schedule is amended from time to time).

 

Approved Assignment ” is defined in Section 7.15(d) of this Agreement.

 

Assumed Rate ” means, (i) with respect to any applicable period, the highest rate applicable to drawings under any senior revolving credit facility of the Company and its Subsidiaries during such period, (ii) if no rate is available under clause (i) for the applicable period, the highest rate applicable to term loans of the Company and its Subsidiaries during such period, and (iii) if no rate is available under clause (i) or (ii) during such period a rate equal to LIBOR + 300 basis points.

 

Assumed State Rate ” means seven percent (7%); provided, that, if there is a change in applicable state or local tax law that results in a material change to the state and local income tax rate of the Company Group, then the Company and the TRA Party Representative shall negotiate in good faith to amend the Assumed State Rate to reflect an appropriate rate.

 

Basis Assets ” means any U.S. federal, state, local, and United Kingdom amortization and depreciation deductions, and any reduction of U.S. federal, state, local and United Kingdom taxable income and gain, attributable to existing Tax basis in the assets (other than cash, cash equivalents and receivables) owned by the Company Group as of the date hereof.

 

  2  

 

 

Board ” means the board of directors of the Company or any parent entity of the Company that directly or indirectly owns all of the outstanding shares in the capital of the Company.

 

Business Day ” means any day excluding Saturday, Sunday and any day that is a legal holiday under the laws of the State of New York or the United Kingdom or is a day on which banking institutions located in New York or London are closed.

 

Change Notice ” is defined in Section 3.4 of this Agreement.

 

Change in Control ” has the meaning given the term “Change in Control” in the Company’s 2016 Equity Incentive Plan (as in effect on the date hereof).

 

Code ” means the U.S. Internal Revenue Code of 1986, as amended.

 

Company ” is defined in the preamble of this Agreement.

 

Company Group ” is defined in the preamble of this Agreement.

 

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 other agreement.

 

Covered Tax Assets ” means, in each case, as applied under U.S. federal, state and local, United Kingdom, German or Japanese Law,

 

(a)          the Basis Assets;

 

(b)          NOLs of the Company and (without duplication) any member of the Company Group existing as of the date of this Agreement;

 

(c)          Tax Credits of the Company and (without duplication) any member of the Company Group existing as of the date of this Agreement;

 

(d)          deductions arising in respect of debt issuance costs, original issue discount, premiums or other costs associated with the Financing Agreements;

 

(e)          deductions in respect of transaction expenses attributable to the Acquisition; and

 

(f)          deductions attributable to Imputed Interest.

 

  3  

 

 

provided that (i) in order to determine whether any item described in clauses (a)-(b) is a Covered Tax Asset or a Non-Covered Tax Asset, the Tax Period of a relevant member of the Company Group that includes the date hereof (the “Straddle Year”) shall be deemed to end as of the end of the date hereof, and, except as otherwise provided below, the Company and the TRA Party Representative shall, acting reasonably, together determine the amount of any such item arising in the Straddle Year, or any portion thereof, that is included in the amount of the Covered Tax Assets; (ii) Covered Tax Assets shall include any Covered Tax Asset that becomes an NOL following the date of this Agreement as a result of such Covered Tax Asset not being fully utilized in the year in which it arises; and (iii) the only German or Japanese Tax attributes that shall be included within the term Covered Tax Assets will be German and Japanese Tax attributes described in clause (b) above. For the avoidance of doubt, Covered Tax Assets shall only include Tax attributes of the Company Group arising or available under U.S. federal, state, local, United Kingdom, German or Japanese Law.

 

Covered Tax Benefit ” for the Covered Tax Periods for a given calendar year means 85% of the Realized Tax Benefits for such calendar year.

 

Covered Tax Period ” means all Tax Periods of any member of the Company Group (beginning with the first Tax Period of such member of the Company Group that includes January 1, 2019) that end during the 12-month period ending on December 31 of each calendar year.

 

Credit Event ” means the occurrence of any of the following events:

 

(a)          an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any U.S. federal, state or non-U.S. bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(b)          the Company or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any U.S. federal, state or non-U.S. bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Subsidiary of the Company or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; or

 

(c)          the Company or any of its Subsidiaries engages in any other action or fails to take any action that constitutes an ‘event of default’ under any indebtedness or guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $10 million if such event of default is not waived by the applicable creditor or cured by the Company within 30 days of its occurrence.

 

  4  

 

 

Credit Event Notice ” is defined in Section 4.1(c) of this Agreement.

 

Determination ” shall mean (i) a “Determination” as described in Section 1313(a) of the Code and (ii) any event (including the execution of a Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.

 

Early Termination Date ” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

 

Early Termination Notice ” is defined in Section 4.2 of this Agreement.

 

Early Termination Option Notice ” is defined in Section 4.1(d) of this Agreement.

 

Early Termination Payment ” is defined in Section 4.3(b) of this Agreement.

 

Early Termination Rate ” means with respect to any Early Termination Payment, WACC as of the Early Termination Date.

 

Early Termination Schedule ” is defined in Section 4.2 of this Agreement.

 

Excess Payment ” is defined in Section 3.2 of this Agreement.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

Expert ” is defined in Section 7.11 of this Agreement.

 

Financing Agreements ” means each of (i) the indenture, dated as of October 3, 2016 (as amended, supplemented or otherwise modified from time to time) among, inter alia, Camelot Finance S.A., the guarantors party thereto and Wilmington Trust, National Association, as trustee; and (ii) that certain credit agreement, dated as of October 3, 2016 (as amended, supplemented or otherwise modified from time to time), by and among, inter alia, Camelot UK Holdco Limited, Camelot UK Bidco Limited Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and certain other parties thereto.

 

Imputed Interest ” means the portion of any Tax Benefit Payment payable by the Company to a TRA Party pursuant to this Agreement that is to be treated as imputed interest under any applicable provision of Tax law.

 

Independent Directors ” means the members of the Board other than members of the Board that have been appointed or designated by a TRA Party or its Affiliates.

 

IRS ” means the U.S. Internal Revenue Service.

 

  5  

 

 

Law ” means any U.S. federal, state, local or non-U.S. statute, law, ordinance, regulation, rule, code, order, injunction, judgment, determination, directive, ruling, decree, requirement or rule of law, or any other provision, decision or requirement having the force and effect of law.

 

LIBOR ” means during any period, the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by the Board as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (a "Alternate Source"), at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such period as the London interbank offered rate for U.S. dollars having a borrowing date and a maturity comparable to such period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a comparable replacement rate determined by the Board at such time; provided, that at no time shall LIBOR be less than 0%.

 

NOLs ” means net operating loss carryforwards, capital loss carryforwards, non-capital losses, net capital losses and any disallowed interest expense carryforwards, in each case, under any Tax Law.

 

Non-Covered Tax Assets ” means (a) any Tax attribute of the Company Group first generated in a Tax Period or portion thereof beginning after the date hereof, which shall include the allocation of any Tax attributes arising in a Straddle Year as set forth in the definition of Covered Tax Assets and shall exclude any Covered Tax Assets, and (b) any Tax attribute of the Company Group that is not relevant to determining the Tax liabilities of the Company Group, and (c) any Tax attribute of any corporation or other entity acquired by the Company or any of its Subsidiaries by purchase, merger, or otherwise (in each case, from a Person or Persons other than the Company and its Subsidiaries and, in each case, whether or not such corporation or other entity survives) after the date hereof that relates to periods (or portions thereof) ending on or prior to the date of such acquisition; provided that Non-Covered Tax Assets shall not include any NOL of the Company or its Subsidiaries arising in a year following the date hereof as a result of a Covered Tax Asset not being fully utilized; provided , further , that Non-Covered Tax Assets shall not include tax basis in or other tax attributes arising from cash, cash equivalents or receivables.

 

Non-Tax Benefit Tax Liability ” means, with respect to the Covered Tax Periods for a given calendar year, the overall liability for Taxes of the Company Group for such Covered Tax Periods using the same methods, elections, conventions and practices used on the Company Group’s actual Tax Returns, but excluding the use of Covered Tax Assets and calculated assuming a combined U.S. state and local income tax rate equal to the Assumed State Rate.

 

Non-TRA Portion ” is defined in Section 2.2(b) of this Agreement.

 

Objection Notice ” is defined in Section 2.3(a)(i) of this Agreement.

 

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Payment Date ” means the date on which a Tax Benefit Payment is required to be made by the Company pursuant to this Agreement.

 

Person ” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

 

Realized Tax Benefit ” means, for the Covered Tax Periods for a given calendar year, the excess, if any, of the Non-Tax Benefit Tax Liability of the Company Group for such calendar year over the Actual Tax Liability of the Company Group for such calendar year (as determined based on the principles set forth in Section 2.2(b)). If all or a portion of the liability for Taxes for a Covered Tax Period arises as a result of an audit or assessment by a Taxing Authority of any Covered Tax Period, such liability shall not be reflected in the determination of the Realized Tax Benefit unless and until there has been a Determination.

 

Reconciliation Dispute ” is defined in Section 7.11 of this Agreement.

 

Reconciliation Procedures ” means those procedures set forth in Section 7.11 of this Agreement.

 

Register ” is defined in Section 7.8(d) of this Agreement.

 

Schedule ” means (i) any Tax Benefit Schedule and (ii) the Early Termination Schedule.

 

Securities Act ” means the Securities Act of 1933, as amended.

 

Subsidiaries ” means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns, directly or indirectly, or otherwise controls more than fifty percent (50%) of the voting power or other similar interests or the sole general partner interest or managing member or similar interest of such Person.

 

Tax Benefit Payment ” is defined in Section 3.1(b) of this Agreement.

 

Tax Benefit Schedule ” is defined in Section 2.2(a) of this Agreement.

 

Tax Claim ” is defined in Section 6.1 of this Agreement.

 

Tax Credit ” means tax credits that may be utilized to offset any Tax.

 

Tax Period ” means (i) with respect to each member of the Company Group organized in the United States, the taxable year of such member of the Company Group as defined in Section 441(b) of the Code and any comparable section of state or local law; and (ii) with respect to each member of the Company Group organized in a jurisdiction other than the United States, the applicable fiscal period of such member of the Company Group for income tax purposes.

 

Tax Return ” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return and declaration of estimated Tax.

 

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Taxes ” means any and all U.S. federal, state, local, UK, German or Japanese taxes, assessments or similar charges measured with respect to net income, capital gains or profits and any interest or additions related to such taxes.

 

Taxing Authority ” means any U.S. federal, state, local and non-U.S. government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising regulatory authority with respect to Taxes.

 

TRA Party ” is defined in the preamble to this Agreement.

 

TRA Party Representative ” is defined in the preamble to this Agreement.

 

TRA Portion ” is defined in Section 2.2(b) of this Agreement.

 

Valuation Assumptions ” means, as of an Early Termination Date, the assumptions that (a) in each Covered Tax Period ending on or after such Early Termination Date, the applicable Company Group will generate taxable income sufficient to fully utilize all Covered Tax Assets (in accordance with all applicable limitations) during such Covered Tax Period or (where limitations would prevent such utilization in the Covered Tax Period that includes the Early Termination Date) future Covered Tax Periods, as applicable; (b) subject to clause (c), the Tax rates that will be in effect for each Covered Tax Period in a particular taxing jurisdiction will be those specified for each Covered Tax Period as in effect on the Early Termination Date (or, where no such rate for a future Covered Tax Period is specified, the tax rate in effect for the Covered Tax Period that includes the Early Termination Date); (c) the effective U.S. state and local income tax rates that will be in effect for all applicable Covered Tax Periods shall be the Assumed State Rate; (d) any non-amortizable assets will be disposed of on the later of the fifteenth anniversary of the date hereof or the Early Termination Date in a fully taxable transaction for all applicable income Tax purposes; provided , such non-amortizable assets shall be deemed disposed of at the time of sale of the relevant asset if earlier than such fifteenth anniversary; (e) any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions (so no interest on the applicable payment obligation will accrue for the period between such date and the date that would otherwise be the Payment Date).

 

WACC ” means the weighted average cost of capital of the Company and its Subsidiaries, as reasonably determined by the Board in good faith applying customary market conventions and subject to the TRA Party Representative’s approval (such approval not to be unreasonably withheld). Any dispute relating to the determination of WACC for purposes of this Agreement shall be settled by the Expert consistent with the principles set forth in Section 7.11.

 

Article II.

DETERMINATION OF REALIZED TAX BENEFIT

 

Section 2.1            Covered Tax Assets . The Company, on the one hand, and the TRA Parties, on the other hand, acknowledge that the Company Group may, and to the fullest extent permitted by applicable law and consistent with the principles set forth under Section 2.2(b) shall, reduce the amount of Taxes that the Company Group would otherwise be required to pay in the future as a result of the Covered Tax Assets.

 

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Section 2.2            Tax Benefit Schedule .

 

(a)           Tax Benefit Schedule . Within 45 calendar days after the filing of the final U.S. federal income Tax Return to be filed by the Company Group with respect to a Covered Tax Period for a given calendar year, the Company shall provide to the TRA Party Representative a schedule showing, in reasonable detail, (i) the calculation of the Covered Tax Benefit (if any) with respect to the Covered Tax Periods for the applicable calendar year and the Tax Benefit Payment (if any) for the Covered Tax Periods for such calendar year (together, a “ Tax Benefit Schedule ”) and (ii) supporting information (including work papers and valuation reports) reasonably necessary to support the calculation of such payment. The Tax Benefit Schedule will become final as provided in Section 2.3(a) and may be amended as provided in Section 2.3(b) (subject to the procedures set forth in Section 2.3(a)). The Company shall cause the members of the Company Group to gather Tax-related information and prepare applicable Tax Returns on a schedule that permits it to timely deliver a Tax Benefit Schedule with respect to all Covered Tax Periods in a given calendar year consistent with the timing described in this Section 2.2(a).

 

(b)           Applicable Principles . For purposes of calculating the Covered Tax Benefit, carryovers or carrybacks of any Tax item attributable to the Covered Tax Assets shall be considered to be subject to the rules of the Code or any other applicable Tax law governing the use, limitation and expiration of carryovers or carrybacks of the relevant type; provided, however, that the Covered Tax Assets treated as resulting in a Realized Tax Benefit for one Covered Tax Period shall not be treated as resulting in a Realized Tax Benefit for any other Covered Tax Period. In addition, for purposes of determining the Realized Tax Benefit for any Covered Tax Period, each member of the Company Group (or, as applicable, the combined, consolidated or other affiliated income Tax group of which such member is a part) shall be assumed (i) to utilize any item of loss, deduction or credit arising in such Covered Tax Period (and permitted to be utilized in such Covered Tax Period) before carrying back or carrying forward to such Covered Tax Period, or otherwise utilizing in such Covered Tax Period, any Covered Tax Asset that is permitted to be so carried back, carried forward or utilized; (ii) to utilize any available Covered Tax Asset that is permitted (or, for the avoidance of doubt, that would be so permitted but for a Non-Covered Tax Asset) to be carried back, carried forward or utilized in such Covered Tax Period before carrying forward, carrying back or utilizing in such Covered Tax Period any Non-Covered Tax Assets (and notwithstanding anything else the utilization of such Covered Tax Asset shall be treated as giving rise to a Realized Tax Benefit to the extent of such utilization), and (iii) to utilize any Covered Tax Asset in the earliest Covered Tax Period in which such Covered Tax Asset is permitted to be utilized. If a carryover or carryback of any Tax attributes includes a portion that is attributable to a Covered Tax Asset (a “ TRA Portion ”) and another portion that is not (a “ Non-TRA Portion ”), the Company Group shall be assumed to utilize the TRA Portion before utilizing the Non-TRA Portion (and notwithstanding anything else the utilization of such TRA Portion shall be treated as giving rise to a Realized Tax Benefit to the extent of such utilization).

 

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Section 2.3            Procedures, Amendments .

 

(a)           Procedure. Each time the Company delivers an applicable Schedule to the TRA Party Representative under this Agreement, including any Amended Schedule delivered pursuant to Section 2.3(b) and any Early Termination Schedule or amended Early Termination Schedule delivered pursuant to the procedures set forth in Section 4.2, the Company shall also (i) deliver supporting schedules and work papers, as determined by the Company or as reasonably requested by the TRA Party Representative, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Schedule; (ii) deliver an Advisory Firm Letter supporting such Schedule; (iii) deliver a declaration signed by the [chief financial officer] of the Company to the effect that the activities underlying the computations reflected in the Schedule have been made without regard to any transaction a significant purpose of which is to reduce or defer any Tax Benefit or Early Termination Payment; and (iv) allow the TRA Party Representative and its advisors to have reasonable access to the appropriate representatives, as reasonably determined by the Company or as reasonably requested by the TRA Party Representative, at the Company and the Advisory Firm in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the Company shall ensure that any Tax Benefit Schedule that is delivered to the TRA Party Representative along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the Actual Tax Liability (the “with” calculation) and the Non-Tax Benefit Tax Liability (the “without” calculation), and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. An applicable Schedule or amendment thereto shall become final and binding on the Parties thirty calendar days from the date on which the TRA Party Representative first received the applicable Schedule or amendment thereto unless:

 

(i)           the TRA Party Representative, within thirty calendar days after receiving the applicable Schedule or amendment thereto, provides the Company with written notice of an objection to such Schedule that is made in good faith and that sets forth in reasonable detail the TRA Party Representative’s material objections (an “ Objection Notice ”); or

 

(ii)          the TRA Party Representative provides a written waiver of its right to deliver an Objection Notice within the time period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver from the TRA Party Representative is received by the Company.

 

In the event that the TRA Party Representative timely delivers an Objection Notice pursuant to clause (i) above, and if the TRA Party Representative and the Company, for any reason, are unable to successfully resolve the issues raised in the Objection Notice within thirty calendar days after receipt by the Company of the Objection Notice, the Company and the TRA Party Representative shall employ the reconciliation procedures as described in Section 7.11 (the “ Reconciliation Procedures ”).

 

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(b)           Amended Schedule . The applicable Schedule with respect to any Covered Tax Period may be amended from time to time by the Company (i) in connection with a Determination affecting the Schedule; (ii) to correct material inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Covered Tax Period after the date the Schedule was provided to the TRA Party Representative; (iii) to reflect a material change (relative to the amounts in the original Schedule) in the Realized Tax Benefit for such Covered Tax Period attributable to an amended Tax Return filed for such Covered Tax Period; or (iv) to comply with the Expert’s determination under the Reconciliation Procedures (such amended Schedule, an “ Amended Schedule ”); provided, however, that such a change under clause (i) shall not be taken into account on an Amended Schedule unless and until there has been a Determination with respect to such change. The Company shall deliver any Amended Schedule to the TRA Party Representative within 30 calendar days of any of the following events described in clauses (i) through (iv) occurring, and any such Amended Schedule shall be subject to the procedures set forth in Section 2.3(a).

 

Article III.

TAX BENEFIT PAYMENTS

 

Section 3.1            Payments .

 

(a)           Payments .

 

(i)          On the later of (x) the fifth Business Day after a Tax Benefit Schedule with respect to the Covered Tax Periods for a given calendar year becoming final in accordance with Section 2.3(a) or Section 7.11 or (y) March 31 of the second calendar year that begins after the close of the calendar year in question (for example, for Covered Tax Periods ending during calendar year 2019, March 31, 2021), the Company shall, subject to clause (ii) below, pay to each of the TRA Parties an amount equal to the TRA Party’s Applicable Percentage multiplied by the Tax Benefit Payment with respect to such Covered Tax Periods, determined pursuant to Section 3.1(b). Each Tax Benefit Payment shall be made by wire transfer of immediately available funds to a bank account designated to the Company by the applicable TRA Party or otherwise agreed by the Company and the applicable TRA Party.

 

(ii)         Notwithstanding anything in this Agreement to the contrary, but without limiting Section 5.1(b) or Section 5.2, it shall not be a breach of this Agreement if the Company fails to make any Tax Benefit Payment or other payment hereunder when due in cash to the extent that (i) the Company and its Subsidiaries do not have sufficient cash or other liquid assets to make such payment or the Company is otherwise prohibited from lawfully making such payment, or (ii) the Financing Agreements (including any senior debt documents that may from time to time replace or refinance any Financing Agreements) do not permit the Company’s Subsidiaries to distribute sufficient cash or other liquid assets to the Company to make such payment and the Company does not have sufficient cash or other liquid assets to make such payment.

 

(b)           Amount of Payments . A “Tax Benefit Payment” shall equal, with respect to the Covered Tax Periods for a given calendar year, the amount of Covered Tax Benefits, if any, for the Covered Tax Periods for such calendar year, increased by

 

(i)          interest calculated at the Assumed Rate, calculated with respect to each portion of the Covered Tax Benefit from the due date (without extensions) of the Tax Return giving rise to the applicable portion of the Covered Tax Benefit until the Payment Date; and

 

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(ii)         any increase in a Covered Tax Benefit that has become final under Section 2.3(b), together with interest calculated at the Assumed Rate from the original Payment Date with respect to the Schedule that was amended;

 

provided, however, that the amounts described in Section 3.1(b)(ii) shall not be taken into account in determining a Tax Benefit Payment attributable to any Covered Tax Period to the extent such amounts were taken into account in determining any Tax Benefit Payment for a preceding Covered Tax Period (the purpose of this provision being to prevent duplication with respect to the making of Tax Benefit Payments). Notwithstanding the foregoing, unless a TRA Party elects to terminate this Agreement in the event of a Change in Control pursuant to Section 4.1(d), for each Covered Tax Period ending on or after a Change in Control, all Tax Benefit Payments shall be calculated by using Valuation Assumptions (a) and (d) substituting in each case the terms “closing date of a Change in Control” for “Early Termination Date.”

 

Section 3.2            Offsets . In the event that a Tax Benefit Schedule is amended pursuant to Section 2.3(b) for any Covered Tax Period reflecting a decrease in the Tax Benefit Payment for such Covered Tax Period and payments have previously been made based on the greater Tax Benefit Payment (such excess, an “ Excess Payment ”), any amounts that would otherwise be due to the TRA Parties at any subsequent time under Section 3.1(b) shall be reduced (but not below zero) until the aggregate amount of such reduction equals the amount of such Excess Payment. For the avoidance of doubt, if all future payments are insufficient to repay any Excess Payment, the TRA Parties shall have no obligation to return such Excess Payment to the Company.

 

Section 3.3            No Duplicative Payments . It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement.

 

Section 3.4            Change Notices . If the Company or any of its Subsidiaries receives a 30-day letter, a final audit report, a statutory notice of deficiency or similar written notice from the IRS or any Taxing Authority (a “ Change Notice ”), which, if sustained, would result in (a) a reduction in the amount of Realized Tax Benefit with respect to a Covered Tax Period preceding the Tax Period in which the Change Notice is received or (b) a reduction in the amount of Tax Benefit Payments the Company will be required to pay to the TRA Parties with respect to Covered Tax Periods after and including the year in which the Change Notice is received, prompt written notice shall be given to the TRA Party Representative. After the date on which a Change Notice is received, to the extent provided in the following sentence, Tax Benefit Payments required to be made under this Agreement shall be paid by the Company to an escrow agent to be jointly selected by the Company and the TRA Party Representative until a Determination has been reached with respect to such Change Notice. The amount of Tax Benefit Payments that shall be placed into escrow shall be the aggregate amount of Tax Benefit Payments that the Company and the TRA Party Representative reasonably agree would be reduced with respect to then-current payment obligations of the Company hereunder if such Change Notice results in an adverse Determination. Amounts that the Company pays into escrow pursuant to this Section 3.4 shall not be considered paid to the TRA Parties for purposes of this Agreement until released to the TRA Parties pursuant to this Section 3.4 (and obligations of the Company to make payments with respect to escrowed amounts shall accrue interest at the Assumed Rate until such release). At the time of a Determination with respect to a Change Notice giving rise to escrowed amounts pursuant to this Section 3.4, (i) if the Determination results in no adjustment in any Tax Benefit Payments under this Agreement, then the relevant escrowed amounts shall be distributed to the TRA Parties; (ii) if the Determination results in an adjustment to Tax Benefit Payments under this Agreement, then the escrowed amounts shall be distributed to the Company and/or the TRA Parties in accordance with the relevant Amended Schedule prepared pursuant to Section 2.3(b). For the avoidance of doubt, (i) the provisions of this Section 3.4 shall be interpreted in a manner so as to avoid duplication with respect to amounts that are offset pursuant to Section 3.2; and (ii) in no event will any TRA Party be required to return or repay to the Company any amounts that have been paid or released to such TRA Party pursuant to this Agreement.

 

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Section 3.5            Cash Payment Deferrals . Notwithstanding the other provisions of this Article III, with respect to only the Tax Benefit Payment for Covered Tax Periods for the calendar year ended December 31, 2019 and the Tax Benefit Payment for Covered Tax Periods for the calendar year ended December 31, 2020, at the option of the Company, the Company may elect to defer the cash payment of the portion (if any) of such Tax Benefit Payment that is in excess of $30 million. Any portion of a Tax Benefit Payment that is deferred pursuant to this Section 3.5 (including any interest accrued with respect thereto, a “ Deferred Payment ”) (i) will continue to represent an amount required to be paid by the Company to the TRA Parties under this Agreement and will continue to accrue interest at the Agreed Rate until paid to the TRA Parties; (ii) will, with respect to any Deferred Payment with respect to Covered Tax Periods for the calendar year ended December 31, 2019, be required to be paid with the Tax Benefit Payment with respect to the Covered Tax Periods for the calendar year ended December 31, 2020 to the extent that the Tax Benefit Payment with respect to the Covered Tax Periods for the calendar year ended December 31, 2020 is less than $30 million; (iii) will, with respect to any Deferred Payment that has not been paid as of the due date for the Tax Benefit Payment with respect to Covered Tax Periods for the calendar year ended December 31, 2021, become payable with the Tax Benefit Payment with respect to Covered Tax Periods for the calendar year ended December 31, 2021; and (iv) will become immediately due and payable in connection with any Early Termination Payment. For the avoidance of doubt, (x) the Company’s election to defer the cash payment of a portion of a Tax Benefit Payment in excess of $30 million under this Section 3.5 shall not constitute a breach of this Agreement, but the Company’s failure to make a Deferred Payment in cash at the time required by Section 3.5(ii), Section 3.5(iii) or Section 3.5(iv) shall constitute a breach of this Agreement; and (y) the deferral mechanism provided in this Section 3.5 shall not delay or otherwise be applicable with respect to any Early Termination Payment payable pursuant to Article IV. Without the consent of the TRA Party Representative, at any time where there is a Deferred Payment under this Section 3.5 that has not yet been paid to the TRA Parties, the Company shall not (and shall not permit its Affiliates to) make any distribution of cash or other property to the equity holders of the Company or any entity that is a parent entity of the Company.

 

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Article IV.

TERMINATION

 

Section 4.1            Early Termination of Agreement; Breach of Agreement; Credit Events .

 

(a)           Company’s Early Termination Right . With written approval of the Company (following the receipt of Board approval, which includes the affirmative vote of at least a majority of the Independent Directors, the Company may request to terminate this Agreement by paying to the TRA Parties the Early Termination Payment (such request, a “ Company Early Termination Request ”). The TRA Party Representative shall have the right to refuse two separate Company Early Termination Requests, and after any such refusal the Company shall not have the right to issue another Company Early Termination Request until at least one year after the date of the issuance of the prior Company Early Termination Request that was refused by the TRA Party Representative. After the TRA Party Representative refuses two separate Company Early Termination Requests made consistent with the terms of this Section 4.1(a), the TRA Party Representative shall not be entitled to refuse any subsequent Company Early Termination Request that is made by the Company consistent with the terms of this Section 4.1(a).

 

(b)           Acceleration upon Breach of Agreement . In the event that the Company breaches any of its material obligations under this Agreement, whether as a result of failure to make any payments when due (subject to Section 3.1(a)(ii)), failure to honor any material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under any applicable bankruptcy or similar rules or otherwise, then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of the breach. The parties agree that, subject to Section 3.1(a)(ii), the failure to make any material payment due pursuant to this Agreement within three months of the date such payment is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement, and that it will not be considered a breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of the date such payment is due.

 

(c)           Acceleration upon a Credit Event. In the event that the Company or the TRA Party Representative becomes aware that an event described in clause (c) in the definition of Credit Event exists with respect to the Company or any of its Subsidiaries, such party shall provide written notice to the other party (the “ Credit Event Notice ”). In the event that (i) the Credit Event is not cured within ten days of delivery of such Credit Event Notice or (ii) upon the occurrence of an event described in clause (a) or (b) in the definition of Credit Event, and the event described in clause (i) or (ii) results in an acceleration of payments due under the related Financing Agreement, all obligations hereunder shall be accelerated (subject to Section 3.1(a)(ii)) and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of the Credit Event.

 

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(d)           Change in Control . In connection with a Change in Control, at the election of any TRA Party, all obligations hereunder with respect to such TRA Party shall be accelerated. The Company hereby agrees to provide twenty days prior written notice to each TRA Party of a Change in Control (an “ Early Termination Option Notice ”). Within ten days of receipt of the Early Termination Option Notice, each TRA Party shall provide written notice of its determination of whether to terminate this Agreement. If a TRA Party elects to terminate this Agreement, then all obligations hereunder with respect to such TRA Party shall be accelerated (subject to Section 3.1(a)(ii)) and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of delivery of such written notice.

 

Section 4.2            Early Termination Notice . If the Company chooses to exercise its right of early termination under Section 4.1(a), the Company shall deliver to the TRA Party Representative notice of the Company’s decision to exercise such right (the “ Early Termination Notice ”). Upon the delivery of the Early Termination Notice or the occurrence of an event described in Section 4.1(b), (c), or (d), within 45 calendar days of the date of such Early Termination Notice or the event described in Section 4.1(b), (c), or (d) that is treated as having given rise to the delivery of an Early Termination Notice, the Company shall deliver a schedule (the “ Early Termination Schedule ”) showing in reasonable detail the information required pursuant to Section 2.2 (as applied to an Early Termination Payment) and the calculation of the Early Termination Payment. The delivery and finalization of such Early Termination Schedule shall be governed by Section 2.3.

 

Section 4.3            Payment upon Early Termination .

 

(a)           Payment Mechanics. Within ten Business Days after the Early Termination Schedule becomes final and binding on the parties hereto, the Company shall (subject to Section 3.1(a)(ii)) pay to each of the TRA Parties its Early Termination Payment. Payments made pursuant to this Section 4.3(a) shall be made by wire transfer of immediately available funds to a bank account designated by the applicable TRA Party or as otherwise agreed by the Company and such TRA Party. For the avoidance of doubt, any publicly traded parent entity of the Company shall have the right to consummate a public offering of shares pursuant to an effective registration statement under the Securities Act and use the net proceeds of such offering to meet its obligations to make an Early Termination Payment in cash to the TRA Parties pursuant to the terms of this Agreement. Notwithstanding the foregoing, the TRA Parties may elect, following written notice to the Company by the TRA Party Representative, to waive the payment of the Early Termination Payment in cash and receive stock of any publicly traded parent entity of the Company in lieu thereof to the extent mutually agreeable to the Company and the TRA Party Representative and to the extent practicable.

 

(b)           Amount of Payment . The “ Early Termination Payment ” with respect to any TRA Party means (without duplication) (i) an amount equal to such TRA Party’s Applicable Percentage of the present value as of the date of delivery (or deemed delivery) of the Early Termination Notice, discounted at the Early Termination Rate as of such date, of all Tax Benefit Payments that would be required to be paid by the Company to the TRA Parties beginning from the Early Termination Date applying the Valuation Assumptions; (ii) the aggregate amount of Deferred Payments under Section 3.5 that have not been paid that are owing to such TRA Party; (iii) any Tax Benefit Payment agreed to by the Company and the TRA Party Representative as due and payable with respect to such TRA Party that is unpaid as of such date; (iv) any Tax Benefit Payment due and payable with respect to such TRA Party for a Covered Tax Period ending prior to, with or including such date; and (v) all amounts held in escrow in respect of a Change Notice with respect to such TRA Party; and including, in each case, any interest that is due to the TRA Party in respect of such amounts (which shall include (without duplication) interest accruing on the amount described in clause (i) at the Assumed Rate or at the Agreed Rate (to the extent Section 5.2 is applicable)). For purposes of determining the portion of any Early Termination Payment described in clause (i), any matters that have given rise to a Change Notice will be considered to have been resolved in a manner that maximizes the amounts payable to the TRA Parties. For purposes of calculating the present value pursuant to this Section 4.3(b) of all Tax Benefit Payments that would be required to be paid after the Early Termination Date, it shall be assumed that absent the Early Termination Notice all portions of Tax Benefit Payments would be due under this agreement and paid on the due date (without extensions) for filing the Tax Return that gave rise to the applicable portion of the Tax Benefit Payments.

 

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Article V.

COMPANY OBLIGATIONS AND LATE PAYMENTS

 

Section 5.1            Company Obligations .

 

(a)          Any Tax Benefit Payments and Early Termination Payment required to be made by the Company to the TRA Parties under this Agreement shall rank pari passu in right of payment with all current or future unsecured obligations of the Company. Any partial Tax Benefit Payments or Early Termination Payments made to the TRA Parties under this Agreement (for example, as a result of the application of Section 3.1(a)(ii) or Section 3.5) shall be paid to the TRA Parties pro rata in proportion to the amount such TRA Parties would have received in respect of such payments had such payments been made in full.

 

(b)          The Company shall not, and shall cause its Subsidiaries to not, without the prior written consent of the TRA Party Representative (not to be unreasonably withheld, conditioned or delayed), amend the terms of any Financing Agreement or enter into any agreement or indenture if the terms of such agreement, indenture or amendment would materially restrict (or in the case of amendments, further restrict beyond the restrictions set forth in the Financing Agreements in effect as of the date hereof (or, if amended to allow for greater capacity with respect to the payment of Tax Benefit Payments or Early Termination Payments, as of the date of such amendment)) the Company’s ability to make the Tax Benefit Payments or the Early Termination Payment under this Agreement, including any agreement that would, directly or indirectly, restrict the ability of the Company’s Subsidiaries to make distributions (by dividend, loan or otherwise) to the Company to fund amounts payable under this Agreement. The Company agrees that any senior debt documents that may from time to time replace or refinance any Financing Agreement shall, unless the TRA Party Representative otherwise consents in writing, permit the payment of distributions by the Company’s Subsidiaries to the Company to the extent required to make the Tax Benefit Payments and the Early Termination Payment, including, in each case, any payments previously deferred as a result of the operation of Section 3.1(a)(ii), without any default blockers, financial tests or other conditions.

 

Section 5.2            Late Payments by the Company . The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment required to be made by the Company to any TRA Party under this Agreement that is not made to such TRA Party when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Agreed Rate and commencing from the date on which such payment was due and payable.

 

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Article VI.

Company Tax Matters; Consistency; Cooperation

 

Section 6.1            Participation in Company Tax Matters . Except as otherwise provided herein, the Company shall have full responsibility for, and sole discretion over, all Tax matters concerning the Company Group, including, without limitation, the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes (a “ Tax Claim ”); provided that the Company shall act in good faith in connection with its control of any matter which is reasonably expected to affect the TRA Parties’ rights and obligations under this Agreement; provided , further, that the Company shall not enter into any settlement with respect to, or agree to concede, any Tax Claim that could have a material effect on the TRA Parties’ rights (including the right to receive payments) under this Agreement without the consent of the TRA Party Representative (not to be unreasonably withheld, conditioned or delayed). The Company shall notify the TRA Party Representative of, and keep the TRA Party Representative reasonably informed with respect to, the portion of any audit of the Company Group by a Taxing Authority the outcome of which is reasonably expected to affect the TRA Parties’ rights and obligations under this Agreement, and shall give the TRA Party Representative reasonable opportunity to provide information and participate (at its own expense) in the applicable portion of such audit.

 

Section 6.2            Cooperation . Each of the Company, on the one hand, and the TRA Parties, on the other hand, shall (a) furnish to the other party in a timely manner such information, documents and other materials as the other party may reasonably request for purposes of making or approving any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority relating to this Agreement; (b) make itself available to the other party and its representatives to provide explanations of documents and materials and such other information as the requesting party or its representatives may reasonably request in connection with any of the matters described in clause (a) above; and (c) reasonably cooperate in connection with any such matter, and the requesting party shall reimburse the other party for any reasonable out-of-pocket costs and expenses incurred pursuant to this Section 6.2.

 

Article VII.

Miscellaneous

 

Section 7.1            Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received (a) on the date of delivery if delivered personally, or by facsimile upon confirmation of transmission by the sender’s fax machine if sent on a Business Day (or otherwise on the next Business Day if sent after the close of normal business hours or on any non-Business Day); (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service; or (c) when sent by electronic mail (with hard copy to follow) during a Business Day (or on the next Business Day if sent after the close of normal business hours or on any non-Business Day). All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

  17  

 

 

If to the Company, to:

 

c/o Clarivate Analytics

Friars House

160 Blackfriars Road

London SE1 8EZ United Kingdom

Attention: Stephen Hartman

E-mail: stephen.hartman@clarivate.com

 

If to the TRA Party Representative or any TRA Party, to:

 

c/o Onex Partners

161 Bay Street

Toronto, ON M5J 2S1

Attention: Andrea Daly and Carlo Chiarot

E-mail: adaly@onex.com and cchiarot@onex.com

 

with a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP

555 Eleventh Street, N.W.

Washington, DC 20004

Attention: Paul Sheridan and Shaun Hartley

E-mail: paul.sheridan@lw.com and shaun.hartley@lw.com

 

Section 7.2            Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery of an executed signature page to this Agreement by facsimile transmission or PDF shall be as effective as delivery of a manually signed counterpart of this Agreement.

 

Section 7.3            Entire Agreement; Third-Party Beneficiaries . This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties hereto any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 7.4            Governing Law . This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, without regard to the conflicts of laws provisions thereof.

 

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Section 7.5            Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

Section 7.6            Headings . The headings of this Agreement are for the convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 7.7            Setoff . Except as provided in Section 3.2, any Tax Benefit Payment or Early Termination Payment due under this Agreement shall be paid in full when due, without setoff, recoupment, adjustment or charge of any kind.

 

Section 7.8            Successors; Assignment; Amendments; Waivers .

 

(a)          Provided that written notice is provided to the Company at least three Business Days prior to an assignment or transfer, each TRA Party may assign or transfer (including by way of a pledge, hypothecation, grant of a participation in, or sale) its rights (and obligations) under this Agreement to any Person without the prior written consent of the Company, the TRA Party Representative, or any other TRA Party; it being understood and agreed that the Company shall promptly record such assignment or transfer in the Register following its receipt of notice thereof.

 

(b)          No provision of this Agreement may be amended unless such amendment is approved in writing by the Company and the TRA Party Representative. For the avoidance of doubt, any amendment of this Agreement that is approved in writing by the Company and the TRA Party Representative shall be binding upon the TRA Parties. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective. Notwithstanding anything contained herein to the contrary, the TRA Party Representative may, in its good faith discretion, amend Schedule A without the consent of any other party hereto; provided that such amendment does not materially and adversely affect any TRA Party in a manner disproportionate to any other TRA Party.

 

(c)          All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

(d)          The Company shall maintain at its office a copy of each notice of assignment or transfer received pursuant to Section 7.8(a) and a register for the recordation of the names, addresses and Applicable Percentages of the TRA Parties (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Company, the TRA Party Representative and the TRA Parties shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a TRA Party hereunder for all purposes of this Agreement. Notwithstanding anything contained herein to the contrary, no assignment or transfer shall be effective until such assignment or transfer has been recorded in the Register.

 

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Section 7.9            Titles and Subtitles . The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

Section 7.10          Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING, CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (A) THIS AGREEMENT OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR (B) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION, DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

Section 7.11          Reconciliation . In the event that the Company and the TRA Party Representative are unable to resolve a disagreement with respect to the matters governed by Section 2.3 or Section 4.2 (which matters, for the avoidance of doubt, may include the calculations of any amounts set forth in any Schedule or Amended Schedule or the determination of WACC) within the relevant period designated in this Agreement (a “ Reconciliation Dispute ”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “ Expert ”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm (other than the Advisory Firm or the preparer of the Advisory Firm Letter) or a nationally recognized valuation firm in the case of WACC, and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Company or the TRA Party Representative or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within 15 days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, either party may request that the American Arbitration Association (the “ AAA ”) choose the Expert, in which case the AAA’s choice will be binding and the expenses of the AAA will be paid by the Company. The Expert shall resolve any matter relating to the Early Termination Schedule or an amendment thereto within thirty calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement is due or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be made on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Company, subject to adjustment (by an increase or decrease in the amount of subsequent payments otherwise due under this Agreement) or amendment of such Tax Return upon resolution. The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne inversely based upon the relative success (in terms of percentages) of each party’s claims. For example, if the final determination reflects a 60-40 compromise of the parties’ claims, the costs and expenses would be allocated 40% to the party whose claim was determined to be 60% successful and 60% to the party whose claim was determined to be 40% successful. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.11 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.11 shall be final and binding on the Company, the TRA Party Representative and all TRA Parties absent manifest error and may be entered and enforced in any court having jurisdiction. The determination of the Expert with respect to any dispute that is submitted to it for determination pursuant to this Section 7.11 shall be based solely on presentations and materials provided by the parties hereto that are in accordance with the guidelines and procedures set forth in this Agreement (i.e., such determination shall not be made on the basis of an independent review by the Expert). The Expert shall not assign a value to any Reconciliation Dispute that is greater than the greatest value for such item assigned by the Company, on the one hand, or the TRA Party Representative, on the other hand, or less than the smallest value for such assigned by the Company, on the one hand, and the TRA Party Representative, on the other hand.

 

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Section 7.12          Withholding . The Company shall be entitled to deduct and withhold from any amount payable to any TRA Parties pursuant to this Agreement such amounts as the Company is required to deduct and withhold under any provision of applicable tax law, with respect to entering into or making payments under this Agreement. To the extent amounts are so withheld and paid over to the appropriate governmental authority by the Company, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the TRA Party in respect of whom such withholding was made. The Company shall provide evidence of such payment to such TRA Party. Notwithstanding the foregoing, if a withholding obligation arises as a result of a Change in Control or any other transaction that causes the Company (or its successor) to become a Person organized in a jurisdiction other than the Island of Jersey or tax resident outside of the United Kingdom, any amount payable to a TRA Party under this Agreement shall be increased such that after all required deductions and withholdings have been made (including such deductions and withholdings applicable to additional sums payable under this sentence) the TRA Party receives an amount equal to the sum that it would have received had no such deductions or withholdings been made. The Company and the TRA Parties agree that no withholding will be made as a result of or in connection with the parties’ entrance into this Agreement on the date hereof.

 

Section 7.13          Affiliated Corporations; Admission of the Company into a Consolidated Group; Transfers of Corporate Assets .

 

(a)          If the Company or any member of the Company Group was, is or becomes a member of an affiliated, combined, unitary or consolidated group of corporations that files a combined, unitary, consolidated or similar income tax return under any applicable provision of Tax law: (i) the provisions of this Agreement relating to the Company and the Company Group shall be applied with respect to the applicable group as a whole as of any date of determination; and (ii) Tax Benefit Payments shall be computed with reference to the consolidated taxable income of the applicable group as a whole.

 

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(b)          If an entity in the Company Group transfers one or more assets to an entity that is not wholly-owned by member(s) of the Company Group, such entity, for purposes of calculating the amount of any Tax Benefit Payment (e.g., calculating the gross income of the applicable member(s) of the Company Group and determining the Realized Tax Benefit) due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such transfer. The consideration deemed to be received by such entity shall be determined as if such transfer occurred on an arm’s length basis with an unrelated third party.

 

(c)           If an entity in the Company Group transfers, directly or indirectly, to a third party (other than a member of the Company Group) stock of any member of the Company Group that owns or otherwise holds Covered Tax Assets that have not previously given rise to a Tax Benefit Payment, then notwithstanding anything else in this Agreement such Covered Tax Assets shall be treated for purposes of this Agreement as having given rise to a Realized Tax Benefit of a member of the Company Group during the calendar year that includes the transfer date, with the amount of such Realized Tax Benefit being equal to the present value, discounted at the Early Termination Rate as of the date of such transfer, of all Tax Benefit Payments that would be required to be paid by the Company to the TRA Parties with respect to such Covered Tax Assets, applying the Valuation Assumptions (for this purpose, substituting in each case the term “the transfer date” for “Early Termination Date” in the definition of “Valuation Assumptions”).

 

Section 7.14          Tax Treatment . For U.S. federal income Tax purposes, the Company and the TRA Parties agree to treat the parties’ entrance into this Agreement as a distribution on the share capital of the Company that is governed by Section 301 of the Code. Neither the Company nor the TRA Parties shall take any position inconsistent with such treatment in any filing with the IRS or with any other United States Taxing Authority, except as otherwise required by Law or as required in good faith to settle a dispute with a Taxing Authority.

 

Section 7.15          TRA Party Representative .

 

(a)           Appointment. Without further action of any of the Company, the TRA Party Representative or any TRA Party, and as partial consideration of the benefits conferred by this Agreement, the TRA Party Representative is hereby irrevocably constituted and appointed, with full power of substitution, to act in the name, place and stead of each TRA Party with respect to the taking by the TRA Party Representative of any and all actions and the making of any decisions required or permitted to be taken by the TRA Party Representative under this Agreement. The power of attorney granted herein is coupled with an interest and is irrevocable and may be delegated by the TRA Party Representative. No bond shall be required of the TRA Party Representative and it shall receive no compensation for its services. In the event that the TRA Party Representative disposes of its entire interest in this Agreement, a majority of the remaining TRA Parties (determined by their relative Applicable Percentages) may elect another TRA Party to act as TRA Party Representative. In the event that the TRA Party Representative wishes to withdraw from its position under this Agreement as TRA Party Representative, a majority of the TRA Parties (determined by their relative Applicable Percentages), including the TRA Party Representative, may elect another TRA Party to act as TRA Party Representative.

 

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(b)           Expenses . If at any time a TRA Party Representative shall incur out-of-pocket expenses in connection with the exercise of its duties hereunder, upon written notice to the Company from the TRA Party Representative of documented out-of-pocket costs and expenses (including fees and disbursements of counsel and accountants) incurred by the TRA Party Representative in connection with the performance of its duties under this Agreement and the taking of any and all actions in connection therewith, the Company shall reduce any future payments (if any) due to the TRA Parties hereunder pro rata (based on their respective Applicable Percentages) by the amount of such expenses which it shall instead remit (subject to Section 3.1(a)(ii)) directly to the TRA Party Representative. In connection with the performance of its duties under this Agreement and the taking of any and all actions in connection therewith, the TRA Party Representative shall not be required to expend any of its own funds (though, for the avoidance of doubt, it may do so at any time and from time to time in its sole discretion).

 

(c)           Limitation on Liability . The TRA Party Representative shall not be liable to any TRA Party for any act of the TRA Party Representative arising out of or in connection with the acceptance or administration of its duties under this Agreement, except to the extent any liability, loss, damage, penalty, fine, cost or expense is actually incurred by such TRA Party as a result of the gross negligence, bad faith or willful misconduct of the TRA Party Representative (as finally determined by a court of competent jurisdiction); it being understood that any act done or omitted pursuant to the advice of legal counsel shall be conclusive evidence of such good faith and reasonable judgment. The TRA Party Representative shall not be liable for, and shall be indemnified by the TRA Parties (on a several but not joint basis and based on their respective Applicable Percentages) for, any liability, loss, damage, penalty or fine incurred by the TRA Party Representative (and any cost or expense incurred by the TRA Party Representative in connection therewith or herewith and not previously reimbursed pursuant to subsection (b)) arising out of or in connection with the acceptance or administration of its duties under this Agreement, except to the extent that any such liability, loss, damage, penalty, fine, cost or expense is the result of the gross negligence, bad faith or willful misconduct of the TRA Party Representative (as finally determined by a court of competent jurisdiction); it being understood that any act done or omitted pursuant to the advice of legal counsel shall be conclusive evidence of such good faith and reasonable judgment.

 

(d)           Actions of the TRA Party Representative . A decision, act, consent or instruction of the TRA Party Representative shall constitute a decision of all TRA Parties and shall be final, binding and conclusive upon each TRA Party, and the Company may rely upon any decision, act, consent or instruction of the TRA Party Representative as being the decision, act, consent or instruction of each TRA Party. The Company is hereby relieved from any liability to any person for any acts done by the Company in accordance with any such decision, act, consent or instruction of the TRA Party Representative, including, without limitation, any action taken by the Company in its dealings with the TRA Party Representative pursuant to and consistent with the terms of this Agreement (including, without limitation, complying with expense reimbursement requests pursuant to Section 7.15(b)). Each TRA Party hereby agrees that the TRA Party Representative may, at any time and in its sole discretion, elect to enter into a transaction which will result in the assignment, in whole or in part, of this Agreement to a Person (upon such election, an “ Approved Assignment ”), and each such TRA Party will raise no objections against such Approved Assignment, regardless of the consideration (if any) being paid in such Approved Assignment, so long as such Approved Assignment does not materially and adversely impact any TRA Party in a manner disproportionate to the other TRA Parties. Each TRA Party will take all actions requested by the TRA Party Representative in connection with the consummation of an Approved Assignment, including the execution of all agreements, documents and instruments in connection therewith requested by the TRA Party Representative of such TRA Party. Upon the consummation of the Approved Assignment, each TRA Party will receive its Applicable Percentage of such consideration, if any, relating to such Approved Assignment. Each TRA Party will bear its Applicable Percentage of the costs of any Approved Assignment (but not to exceed the amount of consideration received or receivable by such TRA Party relating to such Approved Assignment) to the extent such costs are incurred for the benefit of all TRA Parties

 

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Section 7.16          Non-Effect of Other Tax Receivable Agreements . The TRA Party Representative and the Company agree that if the Company or any of its Subsidiaries enters into any other agreement that obligates the Company or any of its Subsidiaries to make payments to another party in exchange for tax benefits conferred upon the Company or any of its Subsidiaries, such tax benefits and such payments shall be ignored for all purposes of this Agreement, including for purposes of calculating the Actual Tax Liability and the Non-Tax Benefit Tax Liability.

 

Section 7.17          Subsidiary Distributions . To the extent permitted by applicable law and the Financing Agreements (including any senior debt documents that may from time to time replace or refinance any Financing Agreements), the Company shall cause its Subsidiaries to make distributions to the Company sufficient to allow the Company to timely make any payments to the TRA Parties that are required pursuant to the terms of this Agreement.

 

Section 7.18          Tax Return Standards . Without limiting any of the other provisions of this Agreement, without the written approval of the Company (following the receipt of Board approval, which includes the affirmative vote of at least a majority of the Independent Directors), the Company and its Subsidiaries shall not take any Tax Return position that would materially increase the amounts owed to the TRA Parties pursuant to the terms of this Agreement unless such Tax Return position would “more likely than not” be sustained if challenged by an applicable Taxing Authority.

 

Section 7.19          Assumed State Rate . The parties intend that the determination of amounts payable to the TRA Parties under the terms of this Agreement with respect to U.S. state and local taxes shall not require separate “with and without” determinations in respect of each applicable jurisdiction and Covered Tax Period, but rather such calculations shall be based on the elections, methodologies and positions taken on the applicable U.S. federal income tax returns of the relevant members of the Corporate Group and the Assumed State Rate. The applicable provisions of this Agreement shall be interpreted consistent with this intent.

 

Section 7.20          Survival . The obligation of the Company to make Tax Benefit Payments hereunder shall (except as otherwise specifically provided in this Agreement) survive indefinitely.

 

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IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.

 

  COMPANY:
     
  CAMELOT HOLDINGS (JERSEY) LIMITED
     
  By:                 
  Name:  
  Title:  

 

  TRA REPRESENTATIVE:
     
  ONEX PARTNERS IV LP
     
  By:  Onex Partners IV GP LP, its General Partner
     
  By:  Onex Partners Manager LP, its Agent
     
  By:  Onex Partners Manager GP ULC, its General Partner
     
  By:  
  Name:  
  Title:  
     
  TRA PARTIES:
     
  [TRA PARTY]
     
  By:                 
  Name:  
  Title:  

 

[ Signature Page to Tax Receivable Agreement ]

 

 

 

 

SCHEDULE A

 

[To come]

 

 

 

 

Exhibit A

 

FORM OF JOINDER AGREEMENT

 

This JOINDER AGREEMENT, dated as of _________________, 20___ (this “ Joinder ”), is delivered pursuant to that certain Tax Receivable Agreement, dated as of [__________], 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Tax Receivable Agreement ”) by and among Camelot Holdings (Jersey) Limited, a limited company organized under the laws of the Island of Jersey (the “ Company ”), and each of the other parties from time to time party thereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Tax Receivable Agreement.

 

1. Joinder to the Tax Receivable Agreement . Upon the execution of this Joinder by the undersigned and delivery hereof to the Company, the undersigned hereby is and hereafter will be a TRA Party under the Tax Receivable Agreement, with all the rights, privileges and responsibilities of a TRA Party thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the Tax Receivable Agreement as if it had been a signatory thereto as of the date thereof.

 

2. Incorporation by Reference . All terms and conditions of the Tax Receivable Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.

 

3. Address . All notices under the Tax Receivable Agreement to the undersigned shall be direct to:

 

[Name]

[Address]

[City, State, Zip Code]

Attn:

Facsimile:

E-mail:

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.

 

  [NAME OF NEW PARTY]
     
  By:  
  Name:  
  Title:  

 

 

 

 

Acknowledged and agreed

as of the date first set forth above:

 

Camelot Holdings (Jersey) LIMITED  
     
By:    
Name:    
Title:    

 

 

 

Exhibit 10.9

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

among

 

Camelot UK Holdco Limited,
as Holdings,

 

Camelot UK Bidco Limited,
as UK Holdco,

 

Camelot Finance LP,
as the US Tower Borrower,

 

Camelot Cayman LP,
as the FHC Tower Borrower,

 

the Borrowers set forth on Schedule 1.1I ,
as the US Company Borrowers,

 

Camelot Finance S.A.,
as the Lux Company Borrower,

 

Certain Restricted Subsidiaries from time to time designated hereunder as Revolver Co-Borrowers,

 

the several Lenders from time to time parties hereto,

 

and

 

Credit Suisse AG, Cayman Islands Branch,
as Administrative Agent

 

Dated as of October 3, 2016

 

 

 

Credit Suisse Securities (USA) LLC,

Merrill Lynch, Pierce, Fenner & Smith Incorporated,

RBC Capital Markets 1 ,

Citigroup Global Markets Inc.,

Barclays Bank PLC,

Goldman Sachs Bank USA and

Guggenheim Securities Credit Partners, LLC,

as Joint Lead Arrangers and Joint Bookrunners

 

 

1 RBC Capital Markets is a brand name for the capital markets business of Royal Bank of Canada and its affiliates.

 

 

 

 

TABLE OF CONTENTS

 

      Page
       
SECTION 1. DEFINITIONS 2
       
1.1   Defined Terms 2
1.2   Other Interpretive Provisions 91
1.3   Accounting 92
1.4   Limited Condition Acquisitions 92
1.5   Currency Equivalents Generally 92
1.6   Change in Currency 93
1.7   Luxembourg Law Terms 93
1.8   Foreign Guarantor Provisions 94
       
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 94
       
2.1   Term Commitments 94
2.2   Procedure for Borrowing Term Loans 94
2.3   Repayment of Term Loans 94
2.4   Revolving Commitments 95
2.5   Procedure for Borrowing of Revolving Loans 96
2.6   Swingline Commitment 96
2.7   Procedure for Swingline Borrowing; Refunding of Swingline Loans 97
2.8   Facility Fees, etc 98
2.9   Termination or Reduction of Revolving Commitments 99
2.10   Optional Prepayments 99
2.11   Mandatory Prepayments and Commitment Reductions 100
2.12   Conversion and Continuation Options 103
2.13   Limitations on Eurocurrency Tranches 104
2.14   Interest Rates and Payment Dates 104
2.15   Computation of Interest and Fees 105
2.16   Inability to Determine Interest Rate; Illegality 106
2.17   Pro Rata Treatment and Payments 107
2.18   Requirements of Law 108
2.19   Taxes 110
2.20   [Reserved] 118
2.21   Indemnity 118
2.22   Change of Lending Office 118
2.23   Replacement of Lenders 119
2.24   Notes 119
2.25   Incremental Credit Extensions 119
2.26   Refinancing Amendments 124
2.27   Defaulting Lenders 125
2.28   Loan Modification Offers 127
2.29   Currency Equivalents 129
2.30   Additional Alternative Currencies 129
       
SECTION 3. LETTERS OF CREDIT 130
       
3.1   L/C Commitment 130

 

 

  - i -  

 

 

3.2   Procedure for Issuance of Letter of Credit 131
3.3   Fees and Other Charges 133
3.4   L/C Participations 133
3.5   Reimbursement Obligation of the Revolving Borrowers 134
3.6   Obligations Absolute 134
3.7   Letter of Credit Payments 135
3.8   Applications 135
3.9   Letter of Credit Amounts 135
3.10   Revaluation of Letters of Credit 135
       
SECTION 4. REPRESENTATIONS AND WARRANTIES 135
       
4.1   Financial Condition 136
4.2   No Change 136
4.3   Existence; Compliance with Law 136
4.4   Power; Authorization; Enforceable Obligations 137
4.5   No Legal Bar 137
4.6   Litigation 137
4.7   Ownership of Property; Liens 138
4.8   Intellectual Property 138
4.9   Taxes 138
4.10   Federal Regulations 138
4.11   Employee Benefit Plans 139
4.12   Investment Company Act 139
4.13   Environmental Matters 139
4.14   Accuracy of Information, etc. 140
4.15   Security Documents 140
4.16   Solvency 141
4.17   Patriot Act; FCPA; OFAC; Sanctions 141
4.18   Status as Senior Indebtedness 141
4.19   Use of Proceeds 142
4.20   Governing Law and Enforcement 142
4.21   Centre of Main Interests 142
4.22   Luxembourg Specific Representations 142
       
SECTION 5. CONDITIONS PRECEDENT 143
       
5.1   Conditions to Closing Date 143
5.2   Conditions to Each Borrowing Date 147
       
SECTION 6. AFFIRMATIVE COVENANTS 148
       
6.1   Financial Statements 148
6.2   Certificates; Other Information 149
6.3   Payment of Taxes 151
6.4   Maintenance of Existence; Compliance with Law 152
6.5   Maintenance of Property; Insurance 152
6.6   Inspection of Property; Books and Records; Discussions 152
6.7   Notices 152
6.8   Environmental Laws 153
6.9   Additional Collateral, etc. 153

 

  - ii -  

 

 

6.10   Credit Ratings 155
6.11   Further Assurances 155
6.12   Designation of Unrestricted Subsidiaries 155
6.13   Employee Benefit Plans 156
6.14   Use of Proceeds 156
6.15   Post-Closing Matters 156
6.16   FCPA; OFAC; Sanctions 156
6.17   Centre of Main Interests 156
6.18   Repayment of Tower Loans 156
6.19   Additional Covenants 157
       
Section 6.A AFFIRMATIVE COVENANTS OF THE TOWER BORROWERS 157
       
6.1.A   Information 158
6.2.A   Payment of Obligations 158
6.3.A   Maintenance of Existence; Compliance 158
6.4.A   Inspection of Property; Books and Records; Discussions 159
6.5.A   Notices 159
6.6.A   Additional Collateral, etc 160
6.7.A   Further Assurances 160
6.8.A   Employee Benefit Plans 160
       
SECTION 7. NEGATIVE COVENANTS 160
       
7.1   Total First Lien Net Leverage Ratio 161
7.2   Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock 161
7.3   Limitation on Restricted Payments 168
7.4   Dividend and Other Payment Restrictions Affecting Subsidiaries 176
7.5   Asset Sales 178
7.6   Transactions with Affiliates 179
7.7   Liens 183
7.8   Fundamental Changes 183
7.9   [Reserved] 184
7.10   Changes in Fiscal Periods 184
7.11   Negative Pledge Clauses 185
7.12   Lines of Business; Holding Company; Lux Company Borrower 185
7.13   Amendments to Organizational Documents 187
       
Section 7.A NEGATIVE COVENANTS OF THE TOWER BORROWERS 187
       
7.1.A   Indebtedness 187
7.2.A   Liens 187
7.3.A   Fundamental Changes 188
7.4.A   Disposition of Property 188
7.5.A   Restricted Payments 188
7.6.A   Consolidated Capital Expenditures 188
7.7.A   Investments 188
7.8.A   Transactions with Affiliates 189
7.9.A   Swap Agreements 189
7.10.A   Lines of Business 189

 

  - iii -  

 

 

7.11.A   Other Agreements 189
7.12.A   Amendments to Certain Agreements 189
       
SECTION 8. GUARANTEE 190
       
8.1   The Guarantee 190
8.2   Obligations Unconditional 190
8.3   Reinstatement 192
8.4   No Subrogation 192
8.5   Remedies 192
8.6   Instrument for the Payment of Money 192
8.7   Continuing Guarantee 192
8.8   General Limitation on Guarantor Obligations 192
8.9   Release of Subsidiary Guarantors 193
8.10   Right of Contribution 193
8.11   Keepwell 193
8.12   Limitations 194
       
SECTION 9. EVENTS OF DEFAULT 198
       
9.1   Company Events of Default 198
9.2   Tower Borrower Events of Default 201
9.3   Action in Event of Default 204
9.4   Right to Cure 205
9.5   Application of Proceeds 206
9.6   Clean-Up Period 207
       
SECTION 10. ADMINISTRATIVE AGENT 207
       
10.1   Appointment and Authority 207
10.2   Rights as a Lender 209
10.3   Exculpatory Provisions 209
10.4   Reliance by Administrative Agent 210
10.5   Delegation of Duties 210
10.6   Resignation and Removal of Administrative Agent 210
10.7   Non-Reliance on Administrative Agent and Other Lenders 212
10.8   No Other Duties, Etc. 212
10.9   Administrative Agent May File Proofs of Claim; Credit Bidding 212
10.10   Collateral and Guaranty Matters 214
10.11   Intercreditor Agreements 216
10.12   Withholding Tax Indemnity 216
10.13   Indemnification 217
10.14   Appointment of Incremental Arrangers, Refinancing Arrangers and Loan Modification Agents 217
       
SECTION 11. MISCELLANEOUS 218
       
11.1   Amendments and Waivers 218
11.2   Notices 221
11.3   No Waiver; Cumulative Remedies 223
11.4   Survival of Representations and Warranties 223

 

  - iv -  

 

 

11.5   Payment of Expenses 224
11.6   Successors and Assigns; Participations and Assignments 225
11.7   Release of Tower Group Members’ Obligations 233
11.8   Adjustments; Set-off 233
11.9   No Recourse Against Limited Partners 234
11.10   Counterparts; Electronic Execution 234
11.11   Severability 234
11.12   Integration 234
11.13   Governing Law 235
11.14   Submission To Jurisdiction; Waivers 235
11.15   Acknowledgements 236
11.16   Acknowledgement and Consent to Bail-In of EEA Financial Institutions 236
11.17   Confidentiality 237
11.18   Waivers Of Jury Trial 237
11.19   USA Patriot Act Notification 237
11.20   Maximum Amount 238
11.21   Lender Action 239
11.22   No Fiduciary Duty 239
11.23   Electronic Execution of Assignment and Certain Other Documents 239
11.24   Conduct of Business by the Lenders 240
       
SECTION 12. CO-BORROWER ARRANGEMENTS AND BORROWER REPRESENTATIVE 240
       
12.1   Addition of Co-Borrowers 240
12.2   Status of Co-Borrowers 241
12.3   Resignation of Co-Borrowers 242
12.4   Appointment of Borrower Representative; Nature of Relationship 242
12.5   Powers 242
12.6   Employment of Agents 242
12.7   Execution of Loan Documents 242

 

SCHEDULES:

 

1.1A-1 Commitments
1.1A-2 L/C Sublimit
1.1B Agreed Security Principles
1.1C Existing Debt Release/Repayment
1.1D-1 Foreign Security Documents
1.1D-2 Tower Security Documents
1.1E Permitted Investments
1.1F Permitted Liens
1.1G Existing Swap Agreements
1.1H Pro Forma Adjustments
1.1I US Company Borrowers
1.8 Foreign Guarantor Provisions
3.1 Existing Letters of Credit
4.9 Taxes
5.1(g) Local Counsel Opinions
6.15 Post-Closing Undertakings
7.2 Permitted Indebtedness

 

  - v -  

 

 

EXHIBITS:

 

A-1 Form of Onex GP Foreign Pledge Agreement
A-2 Form of Onex GP US Pledge Agreement
A-3 Form of Onex LP Foreign Pledge Agreement
A-4 Form of Onex LP US Pledge Agreement
A-5 Form of US Pledge Agreement
A-6 Form of US Security Agreement
B Form of Assignment and Assumption
C Form of Compliance Certificate
C-1 Form of Exemption Certificate
C-2 Form of Exemption Certificate
C-3 Form of Exemption Certificate
C-4 Form of Exemption Certificate
D [Reserved]
E Form of Prepayment Notice
F-1 Form of Revolving Loan Note
F-2 Form of Swingline Loan Note
F-3 Form of Term Loan Note
G Form of Guarantor Joinder Agreement
H Form of Borrowing and Conversion/Continuation Request
I Form of Solvency Certificate
J Form of Global Intercompany Note
K-1 Form of Tower Co Subordination Agreement
K-2 Form of Tower LLC Subordination Agreement
L Form of Swingline Borrowing Request
M Form of Co-Borrower Joinder

 

  - vi -  

 

 

CREDIT AGREEMENT (this “ Agreement ”), dated as of October 3, 2016, among Camelot UK Holdco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10314173 (“ Holdings ”), Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10267893 (“ UK Holdco ”), the borrowers listed on Schedule 1.1I hereto (collectively, the “ US Company Borrowers ”), Camelot Finance S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg (“ Luxembourg ”), having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg and registered with the Luxembourg Trade and Companies Register (the “ Companies Register ”) under number B 208514 (the “ Lux Company Borrower ” and, together with the US Company Borrowers, each a “ Company Borrower ” and, collectively, the “ Company Borrowers ”), Camelot Finance LP, a Delaware limited partnership (the “ US Tower Borrower ”), Camelot Cayman LP, a Cayman Islands exempted limited partnership acting by its general partner, 2530842 Ontario Inc. (the “ FHC Tower Borrower ” and, together with the US Tower Borrower, each a “ Tower Borrower ” and, collectively, the “ Tower Borrowers ”), certain Restricted Subsidiaries (this and each other capitalized term used herein without definition having the meaning assigned to such term in Section 1.1 ) from time to time designated hereunder as Revolver Co-Borrowers (together with the Lux Company Borrower, each a “ Revolving Borrower ” and, collectively, the “ Revolving Borrowers ” and the Revolving Borrowers, together with the Company Borrowers and the Tower Borrowers, each a “ Borrower ” and, collectively, the “ Borrowers ”), the Company Subsidiary Guarantors from time to time party hereto (including through delivery of a Guarantor Joinder Agreement in accordance with the terms of this Agreement), the Tower Subsidiary Guarantors from time to time party hereto, the several banks, financial institutions, institutional investors and other entities from time to time party hereto as lenders (the “ Lenders ”), the Issuing Lenders from time to time party hereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent.

 

WITNESSETH :

 

WHEREAS, pursuant to that certain Stock and Asset Purchase Agreement, dated as of July 10, 2016 (such agreement, together with all schedules and exhibits thereto, as amended, supplemented or otherwise modified from time to time in a manner that would not result in a failure of the condition precedent set forth in Section 5.1(b)(i) , the “ Acquisition Agreement ”), by and among UK Holdco and Thomson Reuters Global Resources, Thomson Reuters Corporation and Thomson Reuters U.S. LLC, as sellers (the “ Sellers ”), UK Holdco, directly or indirectly through one or more acquisition subsidiaries (such acquisition subsidiaries, collectively, with UK Holdco, “ Buyer ”), will acquire (the “ Acquisition ”) from the Sellers the Transferred Shares and the Transferred Assets including, for the avoidance of doubt, the acquisition of the Transferred Shares and the Transferred Assets in the Day 2 Countries (in each case, as defined in the Acquisition Agreement) (collectively, the “ Company ”);

 

WHEREAS, to finance a portion of the Acquisition and for other purposes described herein, the Lenders agreed to extend certain credit facilities consisting of (i) Term Loans made available to the Tower Borrowers and the Company Borrowers in an aggregate principal amount of $1,550,000,000 and (ii) Revolving Commitments (which Revolving Commitments include subfacilities as set forth herein with respect to L/C Commitments and Swingline Commitments) made available to the Lux Company Borrower and the Revolver Co-Borrowers in an aggregate principal amount of $175,000,000;

 

WHEREAS, each Borrower agreed to guarantee the obligations of each other Borrower (subject to certain limitations set forth in the Loan Documents and the Agreed Security Principles);

 

  1  

 

 

WHEREAS, each Borrower agreed to secure all of its respective Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a lien on substantially all of its assets (subject to certain limitations set forth in the Loan Documents and the Agreed Security Principles); and

 

WHEREAS, Holdings, UK Holdco, each Company Subsidiary Guarantor and each Tower Subsidiary Guarantor has agreed to guarantee the Obligations of each Borrower and to secure its respective Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a lien on substantially all of its assets (subject, in each case, to certain limitations set forth in the Loan Documents and the Agreed Security Principles).

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

SECTION 1.
DEFINITIONS

 

1.1            Defined Terms . As used in this Agreement (including the recitals hereof), the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1 .

 

ABR ”: for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus ½ of 1%, (b) the Prime Rate, and (c) the Eurocurrency Rate for Loans denominated in Dollars with an Interest Period of one month plus 1.0%.

 

ABR Loans ”: Loans the rate of interest applicable to which is based upon the ABR.

 

Acceptable Price ”: as defined in the definition of “Dutch Auction.”

 

Accepting Lenders ”: as defined in Section 2.28(a) .

 

Acquired Indebtedness ”: with respect to any specified Person:

 

(a)          Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary; and

 

(b)          Indebtedness secured by a Lien encumbering any asset acquired by such specified Person;

 

provided that any Indebtedness of such Person that is extinguished, redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transaction pursuant to which such other Person becomes a Subsidiary of the specified Person will not be Acquired Indebtedness.

 

Acquisition ”: as defined in the recitals hereto.

 

Acquisition Agreement ”: as defined in the recitals hereto.

 

Acquisition Agreement Representations ”: such of the representations and warranties made by or on behalf of the Company in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the Buyer has the right to terminate its obligations, or decline to consummate the Acquisition, under the Acquisition Agreement as a result of a breach of such representations and warranties.

 

  2  

 

 

Additional Lender ”: at any time, any bank or other financial institution that agrees to provide any portion of any (a) Revolving Commitment Increase or Incremental Term Loans pursuant to an Incremental Amendment in accordance with Section 2.25 or (b) Permitted Credit Agreement Refinancing Debt pursuant to a Refinancing Amendment in accordance with Section 2.26 ; provided that (i) the Administrative Agent, each Issuing Lender and the Swingline Lender shall have consented (not to be unreasonably withheld, conditioned or delayed) to such Additional Lender if such consent would be required under Section 11.6(b) for an assignment of Loans or Revolving Commitments, as applicable, to such Additional Lender, (ii) the applicable Borrower shall have consented to such Additional Lender, (iii) if such Additional Lender is an Affiliated Lender, such Additional Lender must comply with the limitations and restrictions set forth in Section 11.6(b)(iv) and (iv) such Additional Lender will become a party to this Agreement.

 

Additional/Replacement Revolving Commitments ”: as defined in Section 2.25(a) .

 

Administrative Agent ”: Credit Suisse, as the administrative agent for the Lenders this Agreement and the other Loan Documents, together with any of its successors in such capacity.

 

Affiliate ”: with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

Affiliated Lender ”: the Sponsor, any Debt Fund Affiliate or any Non-Debt Fund Affiliate.

 

Aggregate Exposure ”: with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.

 

Aggregate Exposure Percentage ”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

 

Agreed Security Principles ”: the Agreed Security Principles set forth on Schedule 1.1B hereto.

 

Agreement ”: as defined in the preamble hereto.

 

Alternative Currency ”: (i) Euros, Yen, Swiss Francs, Australian Dollars and Sterling and (ii) subject to Section 2.30 , any other currency.

 

Anti-Corruption Laws ”: Laws relating to anti-bribery or anti-corruption (governmental or commercial), including, without limitation, Laws that prohibit the corrupt payment, offer, promise, receipt, request or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010, any Law enacted in connection with, or arising under, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and any other Law of any foreign or domestic jurisdiction of similar effect or that relates to bribery or corruption.

 

  3  

 

 

Applicable Discount ”: as defined in the definition of “Dutch Auction.”

 

Applicable Jurisdiction ”: (i) with respect to the Revolving Facility and/or the Term Facility, the United States, Luxembourg and the Cayman Islands, (ii) with respect to the Revolving Facility, England and Wales, Germany and Spain or (iii) any other jurisdiction approved by the Revolving Lenders or the Term Lenders, as applicable, and the Administrative Agent, in each case, acting reasonably and in good faith.

 

Applicable Margin ”: with respect to:

 

(a)          any Revolving Loan, (i) initially, 3.25% per annum in the case of Eurocurrency Loans and 2.25% per annum in the case of ABR Loans and (ii) from and after the first Business Day immediately following the delivery to the Administrative Agent of a Compliance Certificate (pursuant to Section 6.2(c) ), commencing with the first full fiscal quarter of UK Holdco ending after the Closing Date, wherein the Total First Lien Net Leverage Ratio is (A) greater than 4.50 to 1.00, 3.25% per annum in the case of Eurocurrency Loans and 2.25% per annum in the case of ABR Loans, (B) less than or equal to 4.50 to 1.00 and greater than 4.00 to 1.00, 3.00% per annum in the case of Eurocurrency Loans and 2.00% per annum in the case of ABR Loans, and (C) less than or equal to 4.00 to 1.00, 2.75% per annum in the case of Eurocurrency Loans and 1.75% per annum in the case of ABR Loans;

 

(b)          any Term Loan, 3.75% per annum in the case of Eurocurrency Loans and 2.75% per annum in the case of ABR Loans;

 

(c)          any Incremental Term Loan, the Applicable Margin shall be as set forth in the Incremental Amendment relating to the Incremental Term Commitment in respect of such Incremental Term Loan;

 

(d)          any Other Term Loan or any Other Revolving Loan, the Applicable Margin shall be as set forth in the Refinancing Amendment relating to such Loan; and

 

(e)          any Extended Term Loan or any Extended Revolving Loan, the Applicable Margin shall be as set forth in the Loan Modification Agreement relating to such Loan.

 

Any increase or decrease in the Applicable Margin resulting from a change in the Total First Lien Net Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.2(c) ; provided that the pricing level as set forth above in clause (a)(ii)(A) and (b)(ii)(A) , as applicable, shall apply as of (x) the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the pricing level otherwise determined in accordance with this definition shall apply) and (y) at the option of the Required Lenders, the first Business Day after an Event of Default under Section 9.1(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the pricing level otherwise determined in accordance with this definition shall apply).

 

  4  

 

 

In the event that any financial statements delivered pursuant to Section 6.1 or a Compliance Certificate delivered pursuant to Section 6.2(c) are shown to be inaccurate at any time that this Agreement is in effect and any Loans or Commitments are outstanding hereunder when such inaccuracy is discovered and such inaccuracy, if corrected, would have led to a higher Applicable Margin for any period (an “ Applicable Period ”) than the Applicable Margin applied for such Applicable Period, then (i) the Borrower Representative shall promptly (and in no event later than five (5) Business Days thereafter) deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Margin shall be determined by reference to the corrected Compliance Certificate (but in no event shall the Lenders owe any amounts to the Borrowers) and (iii) the Borrower Representative shall pay to the Administrative Agent promptly upon demand (and in no event later than five (5) Business Days after demand) any additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof. Notwithstanding anything to the contrary in this Agreement, any additional interest hereunder shall not be due and payable until demand is made for such payment pursuant to clause (iii) above and accordingly, any nonpayment of such interest as result of any such inaccuracy shall not constitute a Default (whether retroactively or otherwise), and no such amounts shall be deemed overdue (and no amounts shall accrue interest at the Default Rate), at any time prior to the date that is five (5) Business Days following such demand.

 

Applicable Requirements ”: in respect of any Indebtedness, Indebtedness that satisfies the following requirements:

 

(a)          (i) if such Indebtedness is secured by the Collateral on a pari passu basis with the Obligations, such Indebtedness (x) does not mature prior to the then Latest Maturity Date and (y) does not have a Weighted Average Life to Maturity shorter than the Weighted Average Life to Maturity of the Term Loans; and (ii) for any other Indebtedness, including any Indebtedness that is secured by the Collateral on a junior basis to the Obligations, such Indebtedness does not mature or have scheduled amortization or payments of principal and is not subject to mandatory redemption or prepayment (except customary asset sale or change of control provisions), in each case prior to the date that is 91 days after the then Latest Maturity Date at the time such Indebtedness is incurred (excluding, for the avoidance of doubt, any Indebtedness repaid or satisfied and discharged on the date of such incurrence);

 

(b)          if such Indebtedness is secured by the Collateral, a Senior Representative acting on behalf of the holders of such Indebtedness has become party to an Intercreditor Agreement (or any Intercreditor Agreement has been amended or replaced in a manner reasonably acceptable to the Administrative Agent), which results in such Senior Representative having rights to share in the Collateral on a pari passu or junior basis, as applicable;

 

(c)          to the extent such Indebtedness is secured, it is not secured by any property or assets of any Loan Party or any other Restricted Subsidiary other than the Collateral (it being agreed that such Indebtedness shall not be required to be secured by all of the Collateral); provided that Indebtedness that may be incurred by Non-Guarantor Subsidiaries pursuant to Section 7.2 may be secured by assets of Non-Guarantor Subsidiaries;

 

(d)          if such Indebtedness is incurred by (i) any Non-Guarantor Subsidiary, such Indebtedness shall not be guaranteed by any Loan Party and (ii) any Borrower or any Guarantor, such Indebtedness shall not be guaranteed by any Person other than the Borrowers or Guarantors and shall not have any obligors other than the Borrowers or Guarantors; and

 

(e)          the other terms and conditions of such Indebtedness (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions and financial covenants) are (i) taken as a whole, not materially less favorable to the Borrowers of such Indebtedness than those set forth in the Loan Documents (when taken as a whole) or (ii) customary for “high yield” notes of the type being incurred at the time of incurrence (it being agreed that such Indebtedness may be in the form of notes or a credit agreement), except in each case for covenants or other provisions contained in such Indebtedness that are applicable only after the date that is 91 days after the then Latest Maturity Date;

 

  5  

 

 

provided that an Officer’s Certificate signed on behalf of the Borrower Representative delivered to the Administrative Agent at least five Business Days (or a shorter period acceptable to the Administrative Agent) prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower Representative has determined in good faith that such terms and conditions satisfy the requirements of this definition, shall be conclusive evidence that such terms and conditions satisfy the requirements of this definition, unless the Administrative Agent notifies the Borrower Representative within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

 

Application ”: an application, in such form as the applicable Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.

 

Approved Electronic Communications ”: as defined in Section 11.2.

 

Approved Fund ”: as defined in Section 11.6(b)(ii) .

 

Asset Sale ”:

 

(1)         the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale Leaseback Transaction) of the Top Borrowers, Tower LLC, Tower Co, UK Holdco or any Restricted Subsidiary (each referred to in this definition as a “disposition”); or

 

(2)         the issuance or sale of Equity Interests of Tower LLC, Tower Co or any Restricted Subsidiary (other than (1) directors’ qualifying shares or shares or interests required to be held by non-U.S. nationals or other third parties to the extent required by applicable law or (2) Preferred Stock or Disqualified Stock of Tower LLC, Tower Co or a Restricted Subsidiary issued in compliance with Section 7.2) , other than by Tower LLC to the FHC Tower Borrower, by Tower Co to the US Tower Borrower or by any Restricted Subsidiary to UK Holdco or another Restricted Subsidiary (whether in a single transaction or a series of related transactions), in each case other than:

 

(a)          a sale, exchange, transfer or other disposition of cash, Cash Equivalents or Investment Grade Securities or uneconomical, obsolete, damaged, unnecessary, surplus, unsuitable or worn out equipment or any sale or disposition of property or assets in connection with scheduled turnarounds, maintenance and equipment and facility updates or any disposition of inventory or goods (or other assets) held for sale or no longer used in the ordinary course of business;

 

(b)          the sale, conveyance, transfer or other disposition of all or substantially all of the assets of UK Holdco (on a consolidated basis) in a manner pursuant to Section 7.8 ;

 

(c)          any Permitted Investment or Restricted Payment that is permitted to be made, and is made, under Section 7.3 ;

 

(d)          any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary with an aggregate Fair Market Value of less than $15,000,000;

 

(e)          (i) any transfer or disposition of property or assets by a Restricted Subsidiary to UK Holdco or (ii) by UK Holdco or a Restricted Subsidiary to a Restricted Subsidiary;

 

  6  

 

 

(f)           sales of assets received by UK Holdco or any Restricted Subsidiary upon the foreclosure on a Lien;

 

(g)          any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

 

(h)          the unwinding of any Hedging Obligations;

 

(i)           the sale, lease, assignment, license or sublease of inventory, equipment, accounts receivable, notes receivable or other current assets held for sale in the ordinary course of business or the conversion of accounts receivable into a notes receivable;

 

(j)           the lease, assignment or sublease of any real or personal property in the ordinary course of business and dispositions to landlords of improvements made to leased real property pursuant to customary terms of leases entered into in the ordinary course of business;

 

(k)          a sale of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions;

 

(l)           a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

 

(m)         any financing transaction with respect to property built or acquired by UK Holdco or any Restricted Subsidiary, including Sale Leaseback Transactions permitted under this Agreement;

 

(n)          any exchange of assets for assets (including a combination of assets and Cash Equivalents) related to a Similar Business of comparable or greater market value or usefulness to the business of UK Holdco and the Restricted Subsidiaries, as a whole, as determined in good faith by the Borrower Representative, which in the event of an exchange of assets with a Fair Market Value in excess of (i) $20,000,000 shall be evidenced by an Officer’s Certificate signed on behalf of the Borrower Representative and (ii) $30,000,000 shall be set forth in a resolution approved in good faith by at least a majority of the Board of Directors of the Borrower Representative (or any direct or indirect parent thereof);

 

(o)          the grant in the ordinary course of business of any license or sub-license of patents, trademarks, know-how and any other intellectual property;

 

(p)          any sale or other disposition deemed to occur with creating, granting or perfecting a Lien not otherwise prohibited by this Agreement or the Loan Documents;

 

(q)          the surrender or waiver of contract rights or settlement, release or surrender of a contract, tort or other litigation claim in the ordinary course of business;

 

(r)           foreclosures, condemnations or any similar action on assets;

 

(s)           the sale (without recourse) of receivables (and related assets) pursuant to factoring arrangements entered into in the ordinary course of business;

 

  7  

 

 

(t)           sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(u)          transfers of property pursuant to a Recovery Event; and

 

(v)          the lapse, abandonment or other disposition of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of the Borrower Representative are no longer commercially reasonable to maintain or are not material to the conduct of the business of UK Holdco and the Restricted Subsidiaries taken as a whole;

 

provided that, in each case of paragraphs (a) to (v) above, that if any asset subject to a disposal or transfer to any Loan Party is subject to a Lien created by any Security Document at the time of such disposal or transfer to any Loan Party, it shall be disposed of or transferred on the basis that it shall remain subject to, or otherwise become subject to equivalent, Liens under a Security Document immediately following such disposal (subject to the Agreed Security Principles).

 

Asset Sale Percentage ”: 100%.

 

Assignee ”: as defined in Section 11.6(b)(i) .

 

Assignment and Assumption ”: an Assignment and Assumption, substantially in the form of Exhibit B .

 

Auction Purchase ”: a purchase of Loans or Commitments pursuant to a Dutch Auction (x) in the case of a Permitted Auction Purchaser, in accordance with the provisions of Section 11.6(b)(iii) or (y) in the case of an Affiliated Lender, in accordance with the provisions of Section 11.6(b)(iv) .

 

Auditors’ Determination ”: as defined in Section 8.12(d) .

 

Australian Dollars ”: the lawful currency of Australia.

 

Available Revolving Commitment ”: as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) the aggregate Outstanding Amount of such Lender’s Revolving Extensions of Credit at such time.

 

Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

Bank Levy ”: (a) the UK bank levy as set out in the United Kingdom Finance Act 2011, (b) the bank levy imposed by the French Government under the “ taxe bancaire de risque systémique ” as set out in Article 235 ter ZE of the French tax code ( Code Général des Impôts ), (c) the bank levy imposed by the German Government under the Bank Restructuring Fund Regulation ( Restrukturierungsfonds-Verordnung ) which has been issued pursuant to the provisions of the Bank Restructuring Fund Act ( Restrukturierungsfondsgesetz ), (d) the bank levy imposed by the French Government under the “ taxe pour le financement du fonds de soutien aux collectivités territoriales ” as set out in Article 235 ter ZE bis of the French tax code ( Code Général des Impôts ) and (e) any other Tax of a similar nature in any jurisdiction, which is imposed by reference to some or all of the assets, liabilities and/or equity of a financial institution or other entity carrying out financial transactions and which is in force or has been publicly announced at the date of this Agreement or (if applicable), in respect of any Lender, which becomes a party to this Agreement after the day on which this Agreement is entered into, as at the date that Lender becomes a party to this Agreement.

 

  8  

 

 

Bankruptcy Code ”: Title 11 of the United States Code entitled “Bankruptcy”, as now and hereinafter in effect, or any successor statute.

 

Basel III ”: the Basel Committee on Banking Supervision’s (the “Committee”) revised rules relating to capital requirements set out in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Guidance for national authorities operating the countercyclical capital buffer” and “Basel III: International framework for liquidity risk measurement, standards and monitoring” published by the Committee in December 2010, “Revisions to the Basel II market risk framework” published by the Committee in February 2011, the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Committee in November 2011, as amended, supplemented or restated, and any further guidance or standards published by the Committee in connection with these rules.

 

Beneficially Own ”: as defined within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act; “ Beneficial Ownership ” shall have a correlative meaning.

 

Benefited Lender ”: as defined in Section 11.8(a) .

 

Board ”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

Board of Directors ”: as to any Person, the board of directors or managers, sole member, managing member or other governing body, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

 

Borrower ” or “ Borrowers ”: as defined in the preamble hereto.

 

Borrower DTTP Filing ” means an HM Revenue & Customs’ Form DTTP2, duly completed and filed by the relevant UK Borrower, which:

 

(a)          where it relates to a UK Treaty Lender that is a Lender on the day this Agreement is entered into, contains the scheme reference number and jurisdiction of tax residence stated opposite that Lender's name in Schedule 1.1A-1 , and is filed with HM Revenue & Customs within 30 days of the date on which that UK Borrower becomes a Borrower; or

 

(b)          where it relates to a UK Treaty Lender that is not a party to this Agreement on the date on which this Agreement is entered into, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the relevant Assignment and Assumption, Incremental Amendment or Refinancing Amendment pursuant to which such Lender becomes a party hereto or as otherwise notified to the UK Borrower in writing within 15 days of the relevant UK Treaty Lender becoming a party to this Agreement and:

 

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(i)          where the UK Borrower is a Borrower as at the relevant assignment date or the date on which the Incremental Revolving Loans described in the relevant Incremental Amendment take effect or the date on which the relevant Refinancing Amendment take effect (as applicable) is filed with HM Revenue & Customs within 30 days of that date; or

 

(ii)         where the UK Borrower is not a Borrower as at the relevant assignment date or the date on which the Incremental Revolving Loans described in the relevant Incremental Amendment take effect or the date on which the relevant Refinancing Amendment take effect (as applicable) is filed with HM Revenue & Customs within 30 days of the date on which that UK Borrower becomes a Borrower.

 

Borrowing ” a Revolving Borrowing, a Swingline Borrowing or a Term Borrowing, as the context may require.

 

Borrowing Date ”: any Business Day specified by any Borrower as a date on which such Borrower requests the relevant Lenders to make Loans hereunder.

 

Borrowing Request ”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit H .

 

Business ”: as defined in Section 4.13(b) .

 

Business Day ”:

 

(1)         any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York City, the United States of America, Grand Cayman, the Cayman Islands, London, United Kingdom or Luxembourg City, Luxembourg, as applicable; and

 

(2)         (a) if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in Dollars, any fundings and disbursements in Dollars in respect of any such Eurocurrency Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan, means any such day described in clause (1) above that is also a London Banking Day;

 

(b)          if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in an Alternative Currency other than Euros, any fundings and disbursements in such Alternative Currency and, solely with respect to Eurocurrency Loans denominated in Sterling, settlements and payments in Sterling, in respect of any such Eurocurrency Loan, or any other dealings in such Alternative Currency to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan, means any such day described in clause (1) above which is also a day on which dealings in deposits in such Alternative Currency are conducted by and between banks in the London interbank market;

 

(c)          if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in Euros, any fundings, disbursements, settlements and payments in Euros in respect of any such Eurocurrency Loan, or any other dealings in Euros to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan, means any such day described in clause (1) above that is also a TARGET Day; and

 

(d)          if such day relates to a Eurocurrency Loan denominated in an Alternative Currency other than Euros or Sterling, any fundings, disbursements, settlements or payments in such Alternative Currency, or any other dealings in such Alternative Currency to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

 

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Buyer ”: as defined in the recitals hereto.

 

Calculation Date ”: (i) with respect to Section 7.1 and the determination of “Applicable Margin”, “Asset Sale Percentage”, “Facility Fee Rate” and “ECF Percentage”, the last day of the applicable period of four consecutive fiscal quarters and (ii) otherwise, the applicable date that the Fixed Charge Coverage Ratio, Total First Lien Net Leverage Ratio or Total Net Leverage Ratio is tested.

 

Cancellation ” or “ Cancelled ”: the cancellation, termination and forgiveness by Permitted Auction Purchaser of all Loans, Commitments and related Obligations acquired in connection with an Auction Purchase or other acquisition of Term Loans, which cancellation shall be consummated as described in Section 11.6(b)(iii)(C) and the definition of “Eligible Assignee.”

 

Capital Expenditures ”: for any period, with respect to any Person, the aggregate of all expenditures by such Person or any Restricted Subsidiary thereof during such period for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that, in conformity with GAAP, are required to be included as capital expenditures in the consolidated statement of cash flows of UK Holdco and the Restricted Subsidiaries.

 

Capital Stock ”: (1) in the case of a corporation or a company, corporate stock or share capital; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of an exempted company, shares; (4) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (5) 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.

 

Capitalized Lease Obligations ”: at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP. For the avoidance of doubt, “Capitalized Lease Obligations” shall not include obligations or liabilities of any Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations would be required to be classified and accounted for as an operating lease under GAAP as existing on the Closing Date.

 

Captive Insurance Subsidiary ”: any direct or indirect Subsidiary of UK Holdco that bears financial risk or exposure relating to insurance or reinsurance activities and any segregated accounts associated with any such Person.

 

Cash Collateral ”: as defined in the definition of “Collateralize.”

 

Cash Collateral Account ” means a blocked, non-interest bearing deposit account of one or more of the Loan Parties at Credit Suisse or another commercial bank in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner satisfactory to the Administrative Agent.

 

Cash Collateralize ”: as defined in Section 3.2(b) .

 

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Cash Contribution Amount ”: the aggregate amount of cash contributions made to the capital of any Borrower or any Guarantor described in the definition of “Contribution Indebtedness.”

 

Cash Equivalents ”:

 

(1)         Dollars, Alternative Currencies and other local currencies held by UK Holdco and the Restricted Subsidiaries from time to time in the ordinary course of business in connection with any business conducted by such Person in such jurisdiction;

 

(2)         securities issued or directly and fully guaranteed or insured by the government of the United States, Canada, any country that is a member of the European Union, Switzerland or the United Kingdom or any agency or instrumentality thereof in each case with maturities not exceeding two years from the date of acquisition;

 

(3)         certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year, and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000, in the case of U.S. banks, and $100,000,000 (or the foreign currency equivalent thereof), in the case of non-U.S. banks, and whose long-term debt is rated with an Investment Grade Rating by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

 

(4)         repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)         commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least “P-1/A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

 

(6)         readily marketable direct obligations issued by any state or commonwealth of the United States of America, Canada, any country that is a member of the European Union, the United Kingdom or Switzerland or any political subdivision of the foregoing having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

 

(7)         Indebtedness or Preferred Stock issued by Persons (other than the Sponsors or any of their respective Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s in each case with maturities not exceeding two years from the date of acquisition;

 

(8)          investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

 

(9)          instruments equivalent to those referred to in clauses (1) through (7) above denominated in Alternative Currencies or any other currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with (a) any business conducted by any Restricted Subsidiary or any Tower Group Member organized in such jurisdiction or (b) any Investment in the jurisdiction where such Investment is made.

 

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Cash Management Agreement ”: any agreement to provide Cash Management Services.

 

Cash Management Obligations ”: all obligations, including guarantees thereof, of any Group Member to a Cash Management Provider that has appointed in writing the Administrative Agent as its collateral agent in a manner reasonably acceptable to the Administrative Agent and has agreed in writing with the Administrative Agent that it is providing Cash Management Services to one or more Group Members arising from transactions in the ordinary course of business of any Group Member, to the extent such obligations are primary obligations of a Loan Party or are guaranteed by a Loan Party.

 

Cash Management Provider ”: any Person that, as of the Closing Date or as of the date it enters into any Cash Management Agreement, is the Administrative Agent, a Lender or an Affiliate of the Administrative Agent or a Lender, in its capacity as a counterparty to such Cash Management Agreement.

 

Cash Management Services ”: any cash management facilities or services, including (i) treasury, depositary and overdraft services, automated clearinghouse transfer of funds and (ii) purchase cards, credit or debit cards, electronic funds transfer, automated clearinghouse arrangements or similar services.

 

CFC ”: any “controlled foreign corporation” within the meaning of Section 957 of the Code that is a direct or indirect Subsidiary of a US Subsidiary.

 

Change in Law ”: the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act, the European Capital Requirements Directive IV and in each case all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III and/or CRD IV, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

Change of Control ”: at any time, (a) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of UK Holdco and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders, (b) the Borrower Representative becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of UK Holdco, or any direct or indirect parent of UK Holdco that holds directly or indirectly an amount of Voting Stock of UK Holdco such that UK Holdco is a Subsidiary of such holding company, (c) Holdings shall fail to Beneficially Own, directly or indirectly, Capital Stock of UK Holdco representing 100% of the total voting power represented by the issued and outstanding Capital Stock of UK Holdco, (d) UK Holdco shall fail to Beneficially Own, directly or indirectly, Capital Stock of the Lux Company Borrower representing 100% of the total voting power represented by the issued and outstanding Capital Stock of the Lux Company Borrower, (e) UK Holdco shall fail to Beneficially Own, directly or indirectly, Capital Stock of any US Company Borrower representing 100% of the total voting power represented by the issued and outstanding Capital Stock of such US Company Borrower; provided that any Disposition of an Opco Borrower (including, for the avoidance of doubt, pursuant to Section 7.8(a) ) that is not prohibited under the terms of this Agreement shall not constitute a “Change of Control” or (f) a “change of control” or similar event shall occur under the Senior Notes or other Indebtedness of any Group Member the outstanding principal amount of which exceeds $75,000,000 in the aggregate.

 

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Class ”: (a) with respect to Commitments or Loans, those of such Commitments or Loans that have the same terms and conditions and (b) with respect to Lenders, those of such Lenders that have Commitments or Loans of a particular Class.

 

Clean-Up Period ”: (a) with respect to the Acquisition, the period from the Closing Date until the date that is 90 days after the Closing Date or (b) with respect to any Permitted Acquisition or any other Permitted Clean-Up Investment, the period from the date of the consummation of such Permitted Acquisition or Permitted Clean-Up Investment until the date that is 90 days after such closing date.

 

Closing Date ”: October 3, 2016.

 

Co-Borrower Joinder ”: a joinder agreement, in substantially the form of Exhibit M hereto or otherwise reasonably acceptable to the Administrative Agent, pursuant to which a Co-Borrower agrees to become an obligor in respect of Borrowings under this Agreement.

 

Co-Borrowers ”: Wholly Owned Restricted Subsidiaries organized in any Applicable Jurisdiction from time to time designated by the Borrower Representative to the Administrative Agent as “borrowers” with respect to Borrowings in accordance with Section 12 , and “ Co-Borrower ” means any one of them.

 

Code ”: the Internal Revenue Code of 1986, as amended from time to time (except as indicated otherwise with respect to the definition of FATCA).

 

Collateral ”: all of the assets and property of the Loan Parties and any other Person, now owned or hereafter acquired, whether real, personal or mixed, upon which a Lien is purported to be created by any Security Document; provided , however , that the Collateral shall not include (i) any Excluded Assets or (ii) any assets that would be excluded pursuant to the Agreed Security Principles.

 

Collateral Agent ”: Credit Suisse, as the sole and exclusive collateral agent for the Secured Parties under this Agreement and the other Loan Documents, together with any of its successors in such capacity.

 

Collateralize ”: to (i) pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Lenders and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances (“ Cash Collateral ”) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent or (ii) issue back to back letters of credit for the benefit of the Issuing Lenders in a form and substance reasonably satisfactory to the Administrative Agent, in each case, in an amount not less than 100% of the outstanding L/C Obligations.

 

Commitment ”: as to any Lender, the sum of the Term Commitment and the Revolving Commitment of such Lender.

 

Commitment Letter ”: the amended and restated commitment letter, dated as of July 21, 2016, among the Joint Lead Arrangers, UK Holdco and the other parties thereto.

 

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Commodity Exchange Act ”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

Commonly Controlled Entity ”: an entity, whether or not incorporated, that is under common control with Holdings or any Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes Holdings or any Borrower and that is treated as a single employer under Section 414 of the Code.

 

Company ”: as defined in the recitals hereto.

 

Company Borrower Default ”: any of the events specified in Section 9.1 , whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Company Borrower Event of Default ”: any of the events specified in Section 9.1 ; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Company Borrowers ”: as defined in the preamble hereto.

 

Company Group Member ”: the collective reference to Holdings, the Opco Borrowers, UK Holdco and its Restricted Subsidiaries.

 

Company Group Member Permitted Liens ”: with respect to any Company Group Member:

 

(1)         pledges or deposits by such Person in connection with workmen’s compensation, employment or unemployment insurance and other types of social security legislation, employee source deductions, goods and services Taxes, sales Taxes, municipal Taxes, or good faith deposits, prepayments or cash pledges to secure bids, tenders, contracts (other than for the payment of Indebtedness) or leases, subleases, licenses, sublicenses or similar agreements to which such Person is a party, performance and return of money bonds and other similar obligations incurred in the ordinary course of business, or deposits to secure public or statutory obligations of such Person or deposits of cash or government bonds to secure surety, stay, customs or appeal bonds or statutory bonds to which such Person is a party, or deposits as security for contested Taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

(2)         Liens imposed by law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s, construction contractors’ and mechanics’ and other like Liens, in each case for sums not overdue for a period of more than 30 days (other than with respect to Subsidiaries formed in Germany) or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are being maintained in accordance with GAAP;

 

(3)         Liens for Taxes, assessments or other governmental charges, corporate Taxes and pension fund obligations (i) not overdue for more than 60 days or (ii) which are being contested in good faith by appropriate proceedings if (a) adequate reserves with respect thereto are being maintained on the books of such Person in accordance with GAAP (or, in the case of any Foreign Subsidiary, the accounting principles applicable in the relevant jurisdiction) or (b) they are immaterial to UK Holdco and its Restricted Subsidiaries taken as a whole;

 

(4)         Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements, or letters of credit or bankers’ acceptances issued, and completion guarantees provided for, in each case pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

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(5)         survey exceptions, encumbrances, leases, subleases, encroachments, protrusions, easements or reservations of, or rights of others for, sublicenses, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which, in each case, do not in the aggregate materially impair their use in the operation of the business of such Person taken as a whole;

 

(6)         Liens Incurred to secure Other Obligations in respect of Indebtedness permitted to be Incurred pursuant to Section 7.2(b)(i) , (b)(iv) , (b)(vi) , (b)(vii) , (b)(xv) or (b)(xvi) ; provided that, (A) in the case of Section 7.2(b)(vii) , such Lien extends only to the assets and/or Capital Stock, the acquisition, lease, construction, repair, replacement or improvement of which is financed thereby and any income or profits thereof; provided that individual financings provided by a lender may be cross collateralized to other financings provided by such lender or its Affiliates, (B) in the case of Section 7.2(b)(vi) such Indebtedness complies with the Applicable Requirements, and (C) in the case of Section 7.2(b)(xv) , such guarantee may only be subject to Liens to the extent the underlying Indebtedness may be subject to any Liens;

 

(7)         Liens (i) securing the Obligations and (ii) existing on the Closing Date and set forth on Schedule 1.1F ;

 

(8)         Liens on assets, property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Restricted Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by UK Holdco or any Restricted Subsidiary (other than the proceeds or products of such assets, property or shares of stock or improvements thereon);

 

(9)         Liens on assets or on property at the time UK Holdco or any Restricted Subsidiary acquired such assets or property, including any acquisition by means of a merger or consolidation with or into UK Holdco or any Restricted Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens may not extend to any other assets or property owned by UK Holdco or any Restricted Subsidiary (other than the proceeds or products of such assets or property or shares of stock or improvements thereon);

 

(10)        Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to UK Holdco or another Restricted Subsidiary permitted to be Incurred pursuant to Section 7.2 ;

 

(11)        Liens securing Hedging Obligations in an amount not to exceed the greater of $20,000,000 and 0.50% of Total Assets;

 

(12)        Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

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(13)        leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of UK Holdco or any Restricted Subsidiaries;

 

(14)        Liens arising from UCC financing statement filings (or similar filings in any other jurisdiction) regarding operating leases or consignments entered into by UK Holdco and its Restricted Subsidiaries in the ordinary course of business;

 

(15)        Liens in favor of UK Holdco or any Restricted Subsidiary;

 

(16)        Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

 

(17)        pledges and deposits made in the ordinary course of business to secure liability to insurance carriers, insurance companies and brokers;

 

(18)        Liens on the Equity Interests and Indebtedness of Unrestricted Subsidiaries and joint ventures that are not Restricted Subsidiaries;

 

(19)        grants of software and other technology licenses in the ordinary course of business;

 

(20)        judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(21)        Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(22)        Liens Incurred to secure Cash Management Obligations in the ordinary course of business;

 

(23)        Liens on equipment of UK Holdco or any Restricted Subsidiary granted in the ordinary course of business to UK Holdco’s or such Restricted Subsidiary’s client at which such equipment is located;

 

(24)        Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (11) and (15) of this definition of “Company Group Member Permitted Liens;” provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien ( plus proceeds or products of such property or improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) of this definition of “Company Group Member Permitted Liens” at the time the original Lien became a Permitted Lien under this Agreement, and (B) an amount necessary to pay accrued and unpaid interest, any fees and expenses, including any premium and defeasance costs, related to such refinancing, refunding, extension, renewal or replacement;

 

(25)        other Liens securing obligations which obligations do not exceed the greater of $200,000,000 and 5.00% of Total Assets at any one time outstanding;

 

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(26)        Liens arising under the Tower Security Documents;

 

(27)        Liens on receivables and related assets including proceeds thereof being sold in factoring arrangements entered into in the ordinary course of business;

 

(28)        Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of UK Holdco or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of UK Holdco and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of UK Holdco or any of its Restricted Subsidiaries in the ordinary course of business;

 

(29)        Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(30)        Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 7.2 ; provided that such Liens do not extend to any assets other than those assets that are the subject of such repurchase agreement;

 

(31)        restrictions on dispositions of assets to be disposed of pursuant to merger agreements, stock or asset purchase agreements and similar agreements;

 

(32)        customary options, put and call arrangements, rights of first refusal and similar rights relating to Investments in joint ventures, partnerships and similar investment vehicles;

 

(33)        any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of UK Holdco or any of its Restricted Subsidiaries;

 

(34)        Liens (i) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business or (ii) on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

 

(35)        Liens not given in connection with the issuance of Indebtedness for borrowed money (i) of a collection bank arising under Section 4-210 of the UCC (or similar filings in any other jurisdiction) on items in the course of collection; (ii) attaching to a commodity trading account in the ordinary course of business; and (iii) in favor of a banking or other financial institution arising as a matter of law or under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and which are within the general parameters customary in the banking industry (including, without limitation, any Lien arising by entering into standard banking arrangements ( AGB-Banken oder AGB-Sparkassen ) in Germany);

 

(36)        (i) Liens solely on any cash earnest money deposits made in connection with any letter of intent or purchase agreement in connection with an Investment permitted hereunder and (ii) Liens on advances of cash or Cash Equivalents in favor of the seller of any property to be acquired in a Permitted Investment to be applied against the purchase price for such Investment;

 

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(37)        customary Liens on deposits required in connection with the purchase of property, equipment and inventory, in each case incurred in the ordinary course of business;

 

(38)        Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge, repayment or redemption of Indebtedness; provided that such defeasance, discharge, repayment or redemption is permitted hereunder;

 

(39)        Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets;

 

(40)        Liens given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of UK Holdco or a Restricted Subsidiary thereof in the ordinary course of business; provided that such Liens do not materially interfere with the operations of UK Holdco and its Restricted Subsidiaries, taken as a whole;

 

(41)        Liens on assets of Non-Guarantor Subsidiaries, provided such Liens secure obligations of Non-Guarantor Subsidiaries that are otherwise permitted hereunder and such Liens only encumber assets of such Non-Guarantor Subsidiaries;

 

(42)        Liens arising out of or deemed to exist in connection with any financing transaction of the type described in clause (m) of the definition of “Asset Sale;” and

 

(43)        (i) pledges, deposits or Liens arising as a matter of law in the ordinary course of business in connection with workers’ compensation schemes, payroll Taxes, unemployment insurance and other social security legislation and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to UK Holdco or any Restricted Subsidiary (including, without limitation, any Liens Incurred pursuant to Section 8a of the German Old Age Employees Part Time Act ( Altersteilzeitgesetz ) or Section 7e of the Fourth Book of the German Social Code ( Sozialgesetzbuch IV )).

 

The Borrower Representative may classify (or later reclassify) any Lien (or any portion thereof) in one or more of the above categories. For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

 

Company Guaranteed Obligations ”: as defined in Section 8.1(b) .

 

Company Guarantors ”: the collective reference to the Tower Borrowers, Holdings, UK Holdco, the Company Subsidiary Guarantors and the Tower Subsidiary Guarantors.

 

Company Loan Party ”: the collective reference to each Loan Party that is a Company Group Member.

 

Company Subsidiary Guarantor ”: each Restricted Subsidiary other than, in each case, (i) each Non-Guarantor Subsidiary, (ii) each Company Borrower and (iii) each Co-Borrower.

 

Compliance Certificate ”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit C .

 

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Consolidated Current Assets ”: at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of UK Holdco and its Restricted Subsidiaries at such date.

 

Consolidated Current Liabilities ”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of UK Holdco and its Restricted Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of UK Holdco and its Restricted Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Loans to the extent otherwise included therein.

 

Consolidated EBITDA ”: with respect to UK Holdco and its Restricted Subsidiaries for any period, the Consolidated Net Income of UK Holdco and its Restricted Subsidiaries for such period:

 

(1)         increased (without duplication) by:

 

(a)          provision for Taxes based on income or profits or capital, including, without limitation, state, franchise and similar Taxes and foreign withholding Taxes of such Person paid or accrued during such period deducted (and not added back) in computing Consolidated Net Income and payroll taxes related to stock compensation costs, including (i) an amount equal to the amount of Tax distributions actually made to the holders of Capital Stock of such Person or any direct or indirect parent of such Person in respect of such period in accordance with Section 7.3(b)(xii) which shall be included as though such amounts had been paid as income Taxes directly by such Person and (ii) penalties and interest related to such taxes or arising from any tax examinations; plus

 

(b)          consolidated Fixed Charges of UK Holdco and its Restricted Subsidiaries for such period (including (x) bank fees and (y) costs of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges), together with items excluded from the definition of “Consolidated Interest Expense” pursuant to clauses (1)(t) through (1)(z) thereof, in each case, to the extent the same was deducted (and not added back) in calculating such Consolidated Net Income; plus

 

(c)          Consolidated Non-Cash Charges of UK Holdco and its Restricted Subsidiaries for such period to the extent such non-cash charges were deducted (and not added back) in computing Consolidated Net Income; plus

 

(d)          any expenses (including without limitation legal and professional expenses) or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the Incurrence of Indebtedness permitted to be Incurred by this Agreement, including a refinancing thereof, and any amendment or modification to the terms of any such transaction (in each case, (i) including any such transactions consummated prior to the Closing Date if disclosed to the Administrative Agent prior to the Closing Date, (ii) whether or not such transaction is undertaken but not completed, (iii) if unsuccessful, whether or not such transaction is permitted by this Agreement (if such transaction would have been permitted if successful) and (iv) including any such transaction incurred by any direct or indirect parent company of UK Holdco), including such fees, expenses or charges related to the Transactions, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

 

(e)          the amount of any restructuring charges, accruals or reserves and business optimization expense deducted (and not added back) in such period in computing Consolidated Net Income, including any such costs Incurred in connection with acquisitions after the Closing Date (including entry into new market/channels and new service or product offerings) and costs related to the closure, reconfiguration and/or consolidation of facilities and costs to relocate employees, integration and transaction costs, retention charges, severance, contract termination costs, recruiting and signing bonuses and expenses, future lease commitments, systems establishment costs, conversion costs and excess pension charges and consulting fees, expenses attributable to the implementation of costs savings initiatives, costs associated with tax projects/audits and costs consisting of professional consulting or other fees relating to any of the foregoing; plus

 

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(f)          any other non-cash charges, including any write offs or write downs, reducing Consolidated Net Income for such period ( provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

 

(g)          the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly Owned Subsidiary of UK Holdco deducted (and not added back) in such period in calculating Consolidated Net Income; plus

 

(h)          the amount of management, monitoring, consulting and advisory fees (including termination fees) and related expenses paid or accrued in such period to the Sponsors to the extent otherwise permitted under Section 7.6 to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(i)          the “run rate” cost savings, operating expense reductions, restructuring charges and expenses and synergies that are expected in good faith to be realized as a result of actions taken or expected to be taken within 24 months after the date of any acquisition, disposition, divestiture, restructuring or the implementation of a cost savings or other similar initiative, as applicable (calculated on a pro forma basis as though such cost savings, operating expense reductions, restructuring charges and expenses and synergies had been realized on the first day of such period as if such cost savings, operating expense reductions, restructuring charges and expenses and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such actions are expected to be taken within 24 months after the consummation of the acquisition, disposition, restructuring or the implementation of an initiative, as applicable, which is expected to result in cost savings, operating expense reductions, restructuring charges and expenses or synergies and (B) no cost savings, operating expense reductions, restructuring charges and expenses or synergies shall be added pursuant to this defined term to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”); plus

 

(j)          the “run rate” expected cost savings, operating expense reductions including, without limitation, costs and expenses related to information and technology systems establishment, modernization or modification, restructuring charges and expenses and synergies related to the Transactions projected by the Borrower Representative in good faith to result from actions with respect to which substantial steps have been, will be, or are expected to be, taken (in the good faith determination of the Borrower Representative) within 24 months after the Closing Date, calculated on a pro forma basis as though such cost savings, operating expense reductions, restructuring charges and expenses and synergies had been realized on the first day of such period as if such cost savings, operating expense reductions, restructuring charges and expenses and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions and which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”; plus

 

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(k)          the amount of loss or discount on sale of receivables and related assets to the Receivables Subsidiary in connection with a Receivables Facility, to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(l)          any costs or expenses incurred by UK Holdco or any of its Restricted Subsidiaries pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement or any accelerated vesting of awards in anticipation of the Transactions, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of UK Holdco or net cash proceeds of an issuance of Equity Interest of UK Holdco (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in Section 7.3(a)(3) to the extent deducted (and not added back) in computing Consolidated Net Income; plus

 

(m)         for purposes of determining compliance with the maximum Total First Lien Net Leverage Ratio required under Section 7.1 , the Cure Amount, if any, received by UK Holdco for such period and permitted to be included in Consolidated EBITDA pursuant to Section 9.4 ; plus

 

(n)          the Tax effect of any items excluded from the calculation of Consolidated Net Income pursuant to clauses (1), (3), (4) and (8) of the definition thereof; plus

 

(o)          to the extent not already otherwise included herein, amounts included on Schedule 1.1H , attached hereto, to the extent such amounts, or amounts of similar type and nature to those listed on Schedule 1.1H , without duplication, continue to be applicable during such period; plus

 

(p)          earn-out obligations incurred in connection with any permitted acquisition or other Investment permitted hereunder and paid or accrued during such period; plus

 

(2)         decreased by (without duplication) non-cash gains increasing Consolidated Net Income of UK Holdco and its Restricted Subsidiaries for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDA in any prior period; and

 

(3)         increased (by losses) or decreased (by gains) by (without duplication) the application of FASB Interpretation No. 45 (Guarantees).

 

Notwithstanding the foregoing, Consolidated EBITDA (a) for the fiscal quarter ended September 30, 2015, shall be deemed to be $66,800,000, (b) for the fiscal quarter ended December 31, 2015, shall be deemed to be $83,800,000, (c) for the fiscal quarter ended March 31, 2016, shall be deemed to be $65,100,000 and (d) for the fiscal quarter ended June 30, 2016, shall be deemed to be $78,000,000, as may be subject to add-backs and adjustments (without duplication) pursuant to clauses (1)(i) and (j) above and the definitions of “Pro Forma Basis” and “Fixed Charge Coverage Ratio” for the applicable period.

 

Consolidated Interest Expense ”: with respect to UK Holdco and its Restricted Subsidiaries for any period, the sum, without duplication, of

 

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(1)         consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments and receipts (if any) pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (t) any expense resulting from the discounting of any Indebtedness in connection with the application of purchase accounting in connection with the Transactions or any acquisition, (u) penalties and interest relating to Taxes, (v) any “additional interest” or “penalty interest” with respect to any securities, (w) any accretion or accrued interest of discounted liabilities, (x) amortization of deferred financing fees, debt issuance costs, commissions, discounts, fees and expenses, (y) any expensing of bridge, commitment and other financing fees, cost of surety bonds, charges owed with respect to letters of credit, bankers’ acceptances or similar facilities and (z) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Financing); plus

 

(2)         consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

 

(3)         interest income for such period;

 

provided that, for purposes of calculating Consolidated Interest Expense, no effect shall be given to the discount and/or premium resulting from the bifurcation of derivatives under FASB ASC 815 and related interpretations as a result of the terms of the Indebtedness to which such Consolidated Interest Expense relates.

 

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

 

Notwithstanding the foregoing, any additional changes arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges.

 

Consolidated Net Income ”: with respect to UK Holdco and its Restricted Subsidiaries for any period, the aggregate of the Net Income of UK Holdco and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided , however , that, without duplication:

 

(1)         any after-Tax effect of infrequent, non-recurring, non-operating or unusual gains, losses, income or expenses (including all fees and expenses relating thereto) (including costs and expenses relating to the Transactions), severance, relocation costs, consolidation and closing costs, integration and facilities opening costs, business optimization costs, transition costs, restructuring costs, signing, retention or completion bonuses or payments and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded,

 

(2)         the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period, whether effected through a cumulative effect adjustment or a retroactive application in each case in accordance with GAAP, shall be excluded,

 

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(3)         any net after-Tax effect of income or loss from disposed, abandoned or discontinued operations and any net after-Tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded,

 

(4)         any net after-Tax effect of gains or losses (including all fees and expenses relating thereto) attributable to business dispositions or asset dispositions or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by the Borrower Representative, shall be excluded,

 

(5)         the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting (other than a Guarantor), shall be excluded; provided that the Consolidated Net Income of UK Holdco shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

 

(6)         solely for the purpose of the definition of Excess Cash Flow and determining the amount available for Restricted Payments under Section 7.3(a)(3)(A) , the Net Income for such period of any Restricted Subsidiary (other than any Company Borrower or any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of UK Holdco will be increased by the amount of dividends or other distributions or other payments actually paid in cash or Cash Equivalents (or to the extent converted into cash or Cash Equivalents) to UK Holdco or any of its Restricted Subsidiaries in respect of such period, to the extent not already included therein,

 

(7)         effects of adjustments (including the effects of such adjustments pushed down to UK Holdco and its Restricted Subsidiaries) in any line item in such Person’s consolidated financial statements (including, but not limited to, any step-ups with respect to re-valuing assets and liabilities) pursuant to GAAP and related authoritative pronouncements resulting from the application in accordance with GAAP of purchase accounting in relation to the Transactions or any investment, acquisition, merger or consolidation (or reorganization or restructuring) that is consummated after the Closing Date or the depreciation, amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

 

(8)         any net after-Tax income (loss) from the early extinguishment of (i) Indebtedness, (ii) Hedging Obligations or (iii) other derivative instruments shall be excluded,

 

(9)         any impairment charge or expense, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets or investments in debt and equity securities or as a result of a change in law or regulations, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded,

 

(10)        any non-cash compensation charge or expense, including any such charge arising from grants of stock appreciation or similar rights, phantom equity, stock options, restricted stock or other rights, and any cash charges associated with the rollover, acceleration or payout of Equity Interests by management of UK Holdco or any of its direct or indirect parent companies in connection with the Transactions, including any expense resulting from the application of Statement of Financial Accounting Standards No. 123R shall be excluded, provided that any subsequent settlement in cash shall reduce Consolidated Net Income for the period in which such payment occurs,

 

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(11)        any fees and expenses or other charges (including any make-whole premium or penalties) incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, recapitalization, Asset Sale, issuance or repayment of Indebtedness, Equity Offering, refinancing transaction or amendment or modification of any debt instrument (in each case, (i) including any such transactions consummated prior to the Closing Date, (ii) whether or not such transaction is undertaken but not completed, (iii) if unsuccessful, whether or not such transaction is permitted by this Agreement (if such transaction would have been permitted if successful) and (iv) including any such transaction incurred by any direct or indirect parent company of UK Holdco) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded,

 

(12)        accruals and reserves that are established and not reversed within 12 months after the Closing Date that are so required to be established as a result of the Transactions (or within 12 months after the closing of any acquisition that are so required to be established as a result of such acquisition) in accordance with GAAP shall be excluded,

 

(13)        [reserved],

 

(14)        any charges resulting from the application of Accounting Standards Codification Topic 805 “Business Combinations,” Accounting Standards Codification Topic 350 “Intangibles—Goodwill and Other,” Accounting Standards Codification Topic 360-10-35-15 “Impairment or Disposal of Long-Lived Assets,” Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” or Accounting Standards Codification Topic 820 “Fair Value Measurements and Disclosures” shall be excluded,

 

(15)        non-cash interest expense resulting from the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition” shall be excluded,

 

(16)        any non-cash interest expense and non-cash interest income, in each case to the extent there is no associated cash disbursement or receipt, as the case may be, before the earlier of the maturity date of any then outstanding Class of Term Loans, shall be excluded;

 

(17)        the net after-Tax effect of carve-out related items (including, without limitation, elimination of duplicative costs (including with respect to transaction services agreements) and costs and expenses related to information and technology systems establishment or modification), in each case in connection with the performance of the rights and obligations under the Transition Services Agreement referred to in the Acquisition Agreement, shall be excluded; and

 

(18)        the following items shall be excluded:

 

(a)          any net unrealized gain or loss (after any offset) resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic 815 “Derivatives and Hedging”; and

 

(b)          any net foreign exchange gains or losses (whether or not realized) resulting from the impact of foreign currency changes on the valuation of assets and liabilities on the consolidated balance sheet of UK Holdco and its Restricted Subsidiaries (in each case, including any net loss or gain resulting from hedge arrangements for currency exchange risk).

 

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Solely for purposes of calculating Consolidated EBITDA, the Net Income of UK Holdco and its Restricted Subsidiaries shall be calculated without deducting the income attributable to the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties.

 

In addition, to the extent not already accounted for in the Consolidated Net Income of UK Holdco and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include (i) the amount of proceeds received during such period from business interruption insurance in respect of insured claims for such period, (ii) the amount of proceeds as to which the Borrower Representative has determined there is reasonable evidence it will be reimbursed by the insurer in respect of such period from business interruption insurance (with a deduction for any amount so added back to the extent denied by the applicable carrier in writing within 180 days or not so reimbursed within 365 days) and (iii) reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any Permitted Investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder.

 

Notwithstanding the foregoing, (x) for the purpose of Section 7.3 only (other than clauses (a)(3)(E) and (a)(3)(F) therein), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by UK Holdco and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from UK Holdco and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by UK Holdco or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under such covenant pursuant to clauses (a)(3)(E) and (a)(3)(F) therein and (y) for the purpose of the definition of Excess Cash Flow only, there shall be excluded the income (or deficit) of any Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with UK Holdco or any Restricted Subsidiary thereof.

 

Consolidated Non-Cash Charges ”: with respect to UK Holdco and its Restricted Subsidiaries for any period, the aggregate depreciation, amortization (including amortization of intangibles, deferred financing fees, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees, the non-cash portion of interest expense resulting from the reduction in the carrying value under purchase accounting of UK Holdco’s or any Restricted Subsidiary’s outstanding Indebtedness and commissions, discounts, yield and other fees and charges but excluding amortization of prepaid cash expenses that were paid in a prior period), non-cash impairment, non-cash compensation, non-cash rent and other non-cash expenses of UK Holdco and its Restricted Subsidiaries reducing Consolidated Net Income of UK Holdco and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided that if any non-cash charges referred to in this definition represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period to such extent paid.

 

Consolidated Total Indebtedness ”: as of any date of determination, the aggregate principal amount of Indebtedness described in clauses (a)(i) , (a)(ii) (excluding, for the avoidance of doubt, surety bonds, performance bonds and similar instruments) and (a)(iv) of the definition of “Indebtedness” of UK Holdco and the Restricted Subsidiaries outstanding on such date, determined on a consolidated basis, to the extent required to be recorded on a balance sheet in accordance with GAAP, including, without duplication, the outstanding principal amount of the Term Loans; provided , that the amount of revolving Indebtedness under this Agreement and any other revolving credit facility shall be computed based upon the period-ending value of such Indebtedness during the applicable period; provided , further , that Consolidated Total Indebtedness shall not include (x) Indebtedness in respect of any Qualified Receivables Financing permitted pursuant to Section 7.2(b)(xxiii) or (y) obligations in respect of letters of credit (including Letters of Credit), except to the extent of unreimbursed amounts thereunder.

 

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Consolidated Working Capital ”: at any date, the excess of Consolidated Current Assets on such date over Consolidated Current Liabilities on such date.

 

Consolidated Working Capital Adjustment ”: for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than (in which case the Consolidated Working Capital Adjustment will be a negative number)) Consolidated Working Capital as of the end of such period.

 

Contingent Obligations ”: with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, any obligation of such Person, whether or not contingent:

 

(1)         to purchase any such primary obligation or any property constituting direct or indirect security therefor,

 

(2)         to advance or supply funds:

 

(a)          for the purchase or payment of any such primary obligation; or

 

(b)          to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

 

(3)         to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

Contractual Obligation ”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

Contribution Indebtedness ”: Indebtedness of any Borrower or any Guarantor in an aggregate principal amount not greater than the aggregate amount of cash contributions (other than the Equity Contribution, Excluded Contributions, any contributions received in connection with the exercise of the Cure Right or any such cash contributions that have been used to make a Restricted Payment) made to the equity capital of UK Holdco after the Closing Date, provided that such Contribution Indebtedness (1) shall be Indebtedness with a Stated Maturity Date that is not prior to the date that is 91 days after the then Latest Maturity Date at the time such Contribution Indebtedness is incurred, (2) is Incurred within 210 days after the making of such cash contributions and (3) is so designated as Contribution Indebtedness pursuant to an Officer’s Certificate on the Incurrence date thereof.

 

Control ”: the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

 

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CRD IV ”: (i) Regulation (EU) No 575/2013 of the European Parliament of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and (ii) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; or any law, rules or guidance by which either of them is implemented.

 

Credit Suisse ”: Credit Suisse AG, Cayman Islands Branch, and its successors.

 

CTA 2009 ” means the United Kingdom Corporation Tax Act 2009.

 

Cure Amount ”: as defined in Section 9.4(a) .

 

Cure Period ”: as defined in Section 9.4(a) .

 

Cure Right ”: as defined in Section 9.4(a) .

 

Customary Bridge Financings ”: bridge financing having a final maturity date (including by giving effect to automatic rollovers and extensions) no later than one year following the date of issuance or incurrence thereof (without giving effect to any amendments, waivers or extensions) and otherwise on customary market terms for bridge financings in connection with the issuance of “high yield” securities at the relevant time.

 

Day 2 Assets ”: the Deferred Assets as defined in the Acquisition Agreement. The definition of “Deferred Assets” in the Acquisition Agreement refers to certain assets which are expected to be acquired from Thomson Reuters following the Closing Date.

 

Day 2 Countries ”: the Deferred Closing Countries as defined in the Acquisition Agreement. The definition of “Deferred Closing Countries” in the Acquisition Agreement refers to countries in which the Day 2 Assets, Day 2 Liabilities and Day 2 Subsidiaries are located or organized.

 

Day 2 Liabilities ”: the Deferred Liabilities as defined in the Acquisition Agreement. The definition of “Deferred Liabilities” in the Acquisition Agreement refers to certain liabilities which are expected to be acquired from Thomson Reuters following the Closing Date.

 

Day 2 Subsidiaries ”: the Deferred Subsidiaries as defined in the Acquisition Agreement. The definition of “Deferred Subsidiaries” in the Acquisition Agreement refers to certain subsidiaries which are expected to be acquired from Thomson Reuters following the Closing Date.

 

Debt Fund Affiliate ”: an Affiliate of any Sponsor (other than Holdings and any of its Subsidiaries) that is a bona fide debt fund or an investment vehicle that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business with respect to which any Sponsor and its Affiliates (other than Debt Fund Affiliates) do not directly or indirectly possess the power to direct or cause the direction of the investment policies of such entity.

 

Debtor Relief Laws ”: the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

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Declined Proceeds ”: as defined in Section 2.11(f) .

 

Default ”: any Company Borrower Default or any Tower Borrower Default.

 

Defaulting Lender ”: any Lender that (a) has refused (whether verbally or in writing) to fund (and has not retracted such refusal), or has failed to fund, any portion of the Term Loans, Revolving Loans, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder (collectively, its “ Funding Obligations ”) within one (1) Business Day of the date required to be funded by such Lender hereunder unless such Lender notifies the Administrative Agent and the Borrower Representative in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing), (b) has notified the Administrative Agent or the Borrower Representative in writing that it does not intend to (or will not be able to) satisfy such Funding Obligations or has made a public statement to that effect with respect to its Funding Obligations or generally under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, (d) has failed, within three (3) Business Days after written request by the Administrative Agent, to confirm in a manner reasonably satisfactory to the Administrative Agent that it will comply with its Funding Obligations; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (d) upon the Administrative Agent’s receipt of such confirmation, or (e) has, or has a direct or indirect parent company that has, (i) admitted in writing that it is insolvent or pay its debts as they become due, (ii) become the subject of a proceeding under any Debtor Relief Law, (iii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a substantial part of its assets or a custodian appointed for it, (iv) is or becomes subject to a forced liquidation, (v) makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such person or its assets to be insolvent or bankrupt, (vi) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or action or (vii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender under this clause (e) solely by virtue of the ownership or acquisition of any equity interest in that Lender or the existence of an Undisclosed Administration in respect of that Lender (or, in such any case, any direct or indirect parent company thereof) by a Governmental Authority so long as such ownership interest or Undisclosed Administration does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

Defaulting Lender Fronting Exposure ”: at any time there is a Defaulting Lender, (a) with respect to an Issuing Lender, such Defaulting Lender’s Pro Rata Share of the Outstanding Amount of L/C Obligations of such Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata Share of Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

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Designated Non-cash Consideration ”: the Fair Market Value of non-cash consideration received by UK Holdco or any of its Restricted Subsidiaries in connection with an Asset Sale that is determined by the Borrower Representative to be Designated Non-cash Consideration pursuant to an Officer’s Certificate setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

Designated Preferred Stock ”: Preferred Stock of UK Holdco or any direct or indirect parent of UK Holdco, as applicable (other than Disqualified Stock), that is issued for cash (other than to UK Holdco or any of the Subsidiaries or an employee stock ownership plan or trust established by UK Holdco or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate signed on behalf of the Borrower Representative, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 7.3(a)(3) .

 

Discharge of Senior Obligations ”: has the meaning assigned to such term in the Tower Subordination Agreements.

 

Disposition ”: with respect to any property (including Capital Stock of UK Holdco or any Restricted Subsidiary), any sale, lease, Sale Leaseback Transaction, assignment, conveyance, transfer or other disposition thereof (including by merger or consolidation or amalgamation and excluding the granting of a Lien permitted hereunder) and any issuance of Capital Stock of any Restricted Subsidiary. The terms “ Dispose ” and “ Disposed of ” shall have correlative meanings.

 

Disqualified Lender ”: (i) each bank, financial institution, other institutional lenders and investors and other entities identified on a list made available to the Administrative Agent on or prior to the date of the Commitment Letter and (ii) each competitor of UK Holdco or any of its Subsidiaries that is in the same or a similar line of business as UK Holdco and its Subsidiaries (after giving effect to the consummation of the Transactions) identified by name and designated in writing from time to time to the Administrative Agent and (iii) as to any entity referenced in clause (ii) above (the “ Primary Disqualified Lender ”), any of such Primary Disqualified Lender’s Affiliates readily identifiable as such by name, but excluding any Affiliate that is primarily engaged in, or that advises bona fide debt funds, or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Lender does not, directly or indirectly, possess the power to direct or cause the direction of such entity; provided that any Person that is a Lender and subsequently becomes a Disqualified Lender (but was not a Disqualified Lender on the Closing Date or at the time it became a Lender) shall be deemed to not be a Disqualified Lender hereunder. The list of Disqualified Lenders shall be made available to all Lenders by posting such list to IntraLinks or another similar electronic system.

 

Disqualified Stock ”: with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable, in each case at the option of the holder thereof), or upon the happening of any event:

 

(1)         matures or is mandatorily redeemable (other than as a result of a change of control or asset sale), pursuant to a sinking fund obligation or otherwise,

 

(2)         is convertible or exchangeable for Indebtedness or Disqualified Stock, or

 

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(3)         is redeemable at the option of the holder thereof, in whole or in part, in each case prior to 91 days after the maturity date of the Term Facility (other than as a result of a change of control or asset sale to the extent permitted under clause (1) above); provided , however , that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any plan for the benefit of employees of UK Holdco or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by UK Holdco or any Restricted Subsidiary in order to satisfy applicable statutory or regulatory obligations; provided , further , however , that any Capital Stock held by any future, current or former employee, director, manager or consultant (or their respective trusts, estates, investment funds, investment vehicles or immediate family members), of UK Holdco, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which UK Holdco or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors of the Borrower Representative (or the compensation committee thereof), in each case pursuant to any stockholders’ agreement, management equity plan, stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because it may be required to be repurchased by UK Holdco or any Restricted Subsidiary; provided , further , however , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

Dollar Amount ”: at any time:

 

(a)          with respect to any Loan denominated in Dollars, the principal amount thereof then outstanding (or in which such participation is held); and

 

(b)          with respect to any Loan denominated in an Alternative Currency, the principal amount thereof then outstanding in the relevant Alternative Currency, converted to Dollars in accordance with Section 1.5 .

 

Dollars ” and “ $ ”: dollars in lawful currency of the United States.

 

DPTA ”: as defined in Section 8.12(d) .

 

Dutch Auction ”: one or more purchases (each, a “ Purchase ”) by a Permitted Auction Purchaser or an Affiliated Lender (either, a “ Purchaser ”) of Term Loans; provided that, each such Purchase is made on the following basis:

 

(a)          (i) the Purchaser will notify the Administrative Agent in writing (a “ Purchase Notice ”) (and the Administrative Agent will deliver such Purchase Notice to each relevant Lender) that such Purchaser wishes to make an offer to purchase from each Term Lender and/or each Lender with respect to any Class of Term Loans on an individual tranche basis Term Loans, in an aggregate principal amount as is specified by such Purchaser (the “ Term Loan Purchase Amount ”) with respect to each applicable tranche, subject to a range or minimum discount to par expressed as a price at which range or price such Purchaser would consummate the Purchase (the “ Offer Price ”) of such Term Loans to be purchased (it being understood that different Offer Prices and/or Term Loan Purchase Amounts, as applicable, may be offered with respect to different tranches of Term Loans and, in such an event, each such offer will be treated as a separate offer pursuant to the terms of this definition); provided that the Purchase Notice shall specify that each Return Bid (as defined below) must be submitted by a date and time to be specified in the Purchase Notice, which date shall be no earlier than the second Business Day following the date of the Purchase Notice and no later than the fifth Business Day following the date of the Purchase Notice and (ii) the Term Loan Purchase Amount specified in each Purchase Notice delivered by such Purchaser to the Administrative Agent shall not be less than $10,000,000 in the aggregate;

 

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(b)          such Purchaser will allow each Lender holding the Class of Term Loans subject to the Purchase Notice to submit a notice of participation (each, a “ Return Bid ”) which shall specify (i) one or more discounts to par of such Lender’s tranche or tranches of Term Loans subject to the Purchase Notice expressed as a price (each, an “ Acceptable Price ”) (but in no event will any such Acceptable Price be greater than the highest Offer Price for the Purchase subject to such Purchase Notice) and (ii) the principal amount of such Lender’s tranches of Term Loans at which such Lender is willing to permit a purchase of all or a portion of its Term Loans to occur at each such Acceptable Price (the “ Reply Amount ”);

 

(c)          based on the Acceptable Prices and Reply Amounts of the Term Loans as are specified by the Lenders, such Purchaser will determine the applicable discount (the “ Applicable Discount ”), which will be the lower of (i) the lowest Acceptable Price at which such Purchaser can complete the Purchase for the entire Term Loan Purchase Amount and (ii) in the event that the aggregate Reply Amounts relating to such Purchase Notice are insufficient to allow such Purchaser to complete a purchase of the entire Term Loan Purchase Amount or the highest Acceptable Price that is less than or equal to the Offer Price;

 

(d)          such Purchaser shall purchase Term Loans from each Lender with one or more Acceptable Prices that are equal to or less than the Applicable Discount at the Applicable Discount (such Term Loans being referred to as “ Qualifying Loans ” and such Lenders being referred to as “ Qualifying Lenders ”), subject to clauses (e), (f), (g) and (h) below;

 

(e)          such Purchaser shall purchase the Qualifying Loans offered by the Qualifying Lenders at the Applicable Discount; provided that if the aggregate principal amount required to purchase the Qualifying Loans would exceed the Term Loan Purchase Amount, such Purchaser shall purchase Qualifying Loans ratably based on the aggregate principal amounts of all such Qualifying Loans tendered by each such Qualifying Lender;

 

(f)          the Purchase shall be consummated pursuant to and in accordance with Section 11.6(b) and, to the extent not otherwise provided herein, shall otherwise be consummated pursuant to procedures (including as to timing, rounding and minimum amounts, Interest Periods, and other notices by such Purchaser) reasonably acceptable to the Administrative Agent ( provided that, subject to the proviso of clause (g) of this definition, such Purchase shall be required to be consummated no later than five Business Days after the time that Return Bids are required to be submitted by Lenders pursuant to the applicable Purchase Notice);

 

(g)          upon submission by a Lender of a Return Bid, subject to the foregoing clause (f), such Lender will be irrevocably obligated to sell the entirety or its pro   rata portion (as applicable pursuant to clause (e) above) of the Reply Amount at the Applicable Discount plus accrued and unpaid interest through the date of purchase to such Purchaser pursuant to Section 11.6(b) and as otherwise provided herein; provided that as long as no Return Bids have been submitted each Purchaser may rescind its Purchase Notice by notice to the Administrative Agent; and

 

(h)          purchases by a Permitted Auction Purchaser of Qualifying Loans shall result in the immediate Cancellation of such Qualifying Loans.

 

EBITDA ”: for any period for any Person, the aggregate (without double counting) earnings before interest, tax, depreciation and amortization attributable to such Person for such period (calculated on the same basis as Consolidated EBITDA mutatis mutandis but on an unconsolidated basis and excluding intercompany items (other than intercompany profit margins), as applicable).

 

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ECF Percentage ”: 50%; provided that the ECF Percentage shall be reduced to (i) 25% if the Total First Lien Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 4.50 to 1.00 and greater than 4.00 to 1.00 and (ii) 0% if the Total First Lien Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 4.00 to 1.00, in each case, based on internally available financial statements for each such period.

 

EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having the authority to exercise Write-Down and Conversion Powers.

 

Eligible Assignee ”: (a) any Lender, any Affiliate of a Lender and any Approved Fund (any two or more Approved Funds with respect to a particular Lender being treated as a single Eligible Assignee for all purposes hereof), and (b) any commercial bank, insurance company, financial institution, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys commercial loans in the ordinary course; provided that “Eligible Assignee” (x) shall include (i) Debt Fund Affiliates and Affiliated Lenders, subject to the provisions of Section 11.6(b)(iv) and (ii) Permitted Auction Purchasers, subject to the provisions of Section 11.6(b)(iii) , and solely to the extent that such Permitted Auction Purchasers purchase or acquire Term Loans pursuant to a Dutch Auction and effect a Cancellation immediately upon such contribution, purchase or acquisition pursuant to documentation reasonably satisfactory to the Administrative Agent and (y) shall not include any Disqualified Lender, any natural person or any Company Borrower, any Tower Borrower, Holdings or any of their Affiliates (other than as set forth in this definition).

 

EMU Legislation ”: the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

 

Environmental Laws ”: any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning Materials of Environmental Concern, human health and safety with respect to exposure to Materials of Environmental Concern, and protection or restoration of the environment as now or may at any time hereafter be in effect.

 

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Equity Contribution ”: equity contributions, exchanges or substitutions (including (i) rollover equity converted into or exchanged for Capital Stock of Holdings (or any direct or indirect parent of Holdings), (ii) rollover equity for which Capital Stock of Holdings (or any direct or indirect parent of Holdings) is issued in substitution and (iii) Capital Stock committed to be issued in respect of compensation plans existing on the Closing Date) in the form of (a) common stock or preferred stock or convertible preferred stock that is not Disqualified Stock, in each case having customary provisions and treated as equity by Moody’s and S&P or (b) other Capital Stock having terms reasonably acceptable to the Joint Lead Arrangers, in each case (other than in the case of rollover equity and Capital Stock committed to be issued in respect of compensation plans existing on the Closing Date) made in cash directly or indirectly to Holdings (or any direct or indirect parent of Holdings) by the Permitted Holders and further contributed in one or more steps to the Buyer, and in an aggregate amount (rounded to the nearest percentage point, but without giving effect to (i) any Indebtedness incurred to fund any OID or upfront fees pursuant to the exercise of “market flex” under the Fee Letter and (ii) Letters of Credit outstanding as of the Closing Date) of not less than 30.0% of the sum of the pro forma total debt and equity capitalization of Holdings and its Subsidiaries after giving effect to the Transactions (the “ Total Capitalization ”); provided that the Sponsors’ investment on the Closing Date shall constitute more than 50% of the Equity Contribution.

 

Equity Interests ”: Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

Equity Offering ”: any public or private sale after the Closing Date of common stock or Preferred Stock of UK Holdco or any direct or indirect parent of UK Holdco, as applicable (other than Disqualified Stock), other than:

 

(1)         public offerings with respect to such Person’s common stock registered on Form S-8;

 

(2)         an issuance to any Restricted Subsidiary; and

 

(3)         any such public or private sale that constitutes an Excluded Contribution.

 

ERISA ”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

EU Lender ”: in respect of a Spanish Borrower, a Lender which (a) is resident for Tax purposes in a member state of the European Union (other than Spain) acting directly or through a permanent establishment located in another a member state of the European Union (other than Spain), provided that it does not act in respect of the Loan through a permanent establishment located in Spain or in a jurisdiction other than a member state of the European Union; and (b) does not obtain the relevant income through a state or territory treated as a tax haven pursuant to Spanish laws and regulations (currently set out in Royal Decree 1080/1991, of 5 July - Real Decreto 1080/1991, de 5 de julio -, as amended or restated).

 

Eurocurrency Base Rate ”: for any Interest Period,

 

(a)          in the case of any Eurocurrency Loan denominated in Dollars:

 

(i)          the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate administered by ICE Benchmark Administration Limited (or any person which takes over the administration of that rate) that appears on the Reuters Screen LIBOR01 (or any successor thereto) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

 

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(ii)         if the rate referenced in the preceding clause (a)(i) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays the London interbank offered rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

 

(iii)        if the rates referenced in the preceding clauses (a)(i) and (a)(ii) are not available, the rate per annum equal to the rate determined by the Administrative Agent as the rate which results from interpolating on a linear basis between (x) the offered rate administered by ICE Benchmark Administration Limited (or any person which takes over the administration of that rate) that appears on the Reuters Screen LIBOR01 (or any successor thereto) for deposits in Dollars (for delivery on the first day of such Interest Period) for the longest period (for which such rate is available) which is less than such Interest Period and (y) the offered rate administered by ICE Benchmark Administration Limited (or any person which takes over the administration of that rate) that appears on the Reuters Screen LIBOR01 (or any successor thereto) for deposits in Dollars (for delivery on the first day of such Interest Period) for the shortest period (for which such rate is available) which exceeds such Interest Period, in each case determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

 

(b)          in the case of any Eurocurrency Loan denominated in Euros:

 

(i)          the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate administered by the European Money Markets Institute that appears on Reuters Page EURIBOR01 (or any successor thereto) for deposits in Euros (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (Brussels time) two Business Days prior to the first day of such Interest Period; or

 

(ii)         if the rate referenced in the preceding clause (b)(i) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average Banking Federation of the European Union Interest Settlement Rate (or any successor thereto) for deposits in Euros (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

 

(iii)        if the rates referenced in the preceding clauses (b)(i) and (b)(ii) are not available, the rate per annum equal to the rate determined by the Administrative Agent as the rate which results from interpolating on a linear basis between (x) the offered rate administered by the European Money Markets Institute that appears on Reuters Page EURIBOR01 (or any successor thereto) for deposits in Euros (for delivery on the first day of such Interest Period) for the longest period (for which such rate is available) which is less than such Interest Period and (y) the offered rate administered by the European Money Markets Institute that appears on Reuters Page EURIBOR01 (or any successor thereto) for deposits in Euros (for delivery on the first day of such Interest Period) for the shortest period (for which such rate is available) which exceeds such Interest Period, in each case determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

 

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(c)          in the case of any Eurocurrency Loan denominated in an Alternative Currency other than Euros:

 

(i)          the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on Reuters Page LIBOR01, LIBOR02 or BBSY, as applicable (in each case or any successor thereto), that displays an offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), that appears for deposits in such Alternative Currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of (A) approximately 11:00 a.m. (London time) or (with respect to Australian Dollars) 10:30 a.m. (Sydney time) (B) two Business Days prior to (or, if such Alternative Currency is Sterling or Australian Dollars, on) the first day of such Interest Period; or

 

(ii)         if the rate referenced in the preceding clause (c)(i) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), for deposits in such Alternative Currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) or (with respect to Australian Dollars) 10:30 a.m. (Sydney time) two Business Days prior to (or, if such Alternative Currency is Sterling or Australian Dollars, on) on the first day of such Interest Period; or

 

(iii)        if the rates referenced in the preceding clauses (c)(i) and (c)(ii) are not available, the rate per annum equal to the rate determined by the Administrative Agent as the rate which results from interpolating on a linear basis between (x) the offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), that appears on Reuters Page LIBOR01, LIBOR02 or BBSY, as applicable (in each case or any successor thereto), that displays an offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), that appears for deposits in such Alternative Currency (for delivery on the first day of such Interest Period) for the longest period (for which such rate is available) which is less than such Interest Period and (y) the offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), that appears on Reuters Page LIBOR01, LIBOR02 or BBSY, as applicable (in each case or any successor thereto), that displays an offered rate administered by ICE Benchmark Administration Limited or (with respect to Australian Dollars) Thomson Reuters Benchmark Services Limited, as applicable (or, in each case, any person which takes over the administration of that rate), that appears for deposits in such Alternative Currency (for delivery on the first day of such Interest Period) for the shortest period (for which such rate is available) which exceeds such Interest Period, in each case determined as of approximately 11:00 a.m. (London time) or (with respect to Australian Dollars) 10:30 a.m. (Sydney time) two Business Days prior to (or, if such Alternative Currency is Sterling or Australian Dollars, on) the first day of such Interest Period; and

 

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(d)          for any interest calculation with respect to clause (c) of the definition of ABR, to the extent applicable, on any date:

 

(i)          the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the Reuters Screen LIBOR01 (or any successor thereto) for one-month deposits in Dollars offered in the London interbank market commencing on such date, determined as of approximately 11:00 a.m. (London time) on such date; or

 

(ii)         if the rate referenced in preceding clause (d)(i) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an offered rate administered by ICE Benchmark Administration Limited (or any person which takes over the administration of that rate) for one-month deposits in Dollars offered in the London interbank market (for delivery on the first day of such Interest Period) commencing on such date, determined as of approximately 11:00 a.m. (London time) two Business Days prior to such date; or

 

(iii)        if the rates referenced in the preceding clauses (d)(i) and (d)(ii) are not available, the rate per annum equal to the rate determined by the Administrative Agent as the rate which results from interpolating on a linear basis between (x) the offered rate that appears on the Reuters Screen LIBOR01 (or any successor thereto) for one-month deposits in Dollars offered in the London interbank market (for delivery on the first day of such Interest Period) for the longest period (for which such rate is available) which is less than such Interest Period and (y) the offered rate that appears on the Reuters Screen LIBOR01 (or any successor thereto) for one-month deposits in Dollars offered in the London interbank market (for delivery on the first day of such Interest Period) for the shortest period (for which such rate is available) which exceeds such Interest Period, in each case determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or, if different, the date on which quotations would customarily be provided by leading banks in the London interbank market for deposits of amounts in Dollars for delivery on the first day of such Interest Period;

 

provided, that, in each case, the Eurocurrency Rate with respect to any Eurocurrency Loan that is a Term Loan shall not be deemed to be less than 1.00% per annum.

 

Eurocurrency Loans ”: Loans that bear interest at a rate based on clauses (a) – (c) of the definition of Eurocurrency Base Rate.

 

Eurocurrency Rate ”: (i) with respect to Loans denominated in an Alternative Currency, the Eurocurrency Base Rate and (ii) with respect to Loans denominated in Dollars, (a) for any Interest Period with respect to such Eurocurrency Loan and (b) for any ABR Loan bearing interest at a rate based on the Eurocurrency Rate, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Eurocurrency Base Rate
1.00 - Eurocurrency Reserve Percentage

 

provided , that, in each case, in the event the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of Revolving Loans and any other Loans that do not have an interest rate floor.

 

Eurocurrency Reserve Percentage ”: for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurocurrency Rate for each outstanding Eurocurrency Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

 

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Eurocurrency Tranche ”: the collective reference to Eurocurrency Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

 

Euros ”, “ EUR ” and “ ”: the single currency of the Participating Member States; provided , that if any member state or states ceases to have such single currency as its lawful currency (such member state(s) being the “ Exiting State(s) ”), EUR, Euro and € shall, for the avoidance of doubt, mean for all purposes the single currency adopted and retained as the lawful currency of the remaining member states and shall not include any successor currency introduced by the Exiting State(s).

 

Event of Default ”: any of the events specified in Section 9.1 ; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Excess Cash Flow ”: for any Excess Cash Flow Period, the excess, if positive, of

 

(a)          the sum, without duplication, of

 

(i)          Consolidated Net Income for such Excess Cash Flow Period,

 

(ii)         the amount of Consolidated Non-Cash Charges deducted in arriving at such Consolidated Net Income, but excluding any such Consolidated Non-Cash Charges representing an accrual or reserve for a potential cash item in any future period,

 

(iii)        the Consolidated Working Capital Adjustment for such Excess Cash Flow Period,

 

(iv)        the aggregate net amount of non-cash loss on the Disposition of property by UK Holdco and the Restricted Subsidiaries during such Excess Cash Flow Period (other than sales in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income,

 

(v)         the amount of Tax expense in excess of the amount of Taxes paid in cash during such Excess Cash Flow Period to the extent such Tax expense was deducted in determining Consolidated Net Income for such period, and

 

(vi)        cash receipts in respect of Swap Contracts during such Excess Cash Flow Period to the extent not otherwise included in Consolidated Net Income, over

 

(b)          the sum, without duplication, of

 

(i)          the amount of all non-cash credits included in arriving at such Consolidated Net Income (but excluding any non-cash credit to the extent representing a reversal of an accrual or reserve described in clause (a)(ii)),

 

(ii)         the aggregate amount actually paid by UK Holdco and the Restricted Subsidiaries in cash during such Excess Cash Flow Period on account of Capital Expenditures (excluding the principal amount of Indebtedness incurred in connection with such expenditures other than Indebtedness under the Revolving Loans (or any other revolving facility) and Capital Expenditures made in such Excess Cash Flow Period where a certificate in the form contemplated by the following clause (iii) was previously delivered),

 

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(iii)        Capital Expenditures, Permitted Acquisitions and other Investments permitted hereunder that any Company Group Member shall, during such Excess Cash Flow Period, become obligated to make within the 100 day period following the end of such Excess Cash Flow Period but that are not made during such Excess Cash Flow Period; provided that the Borrower Representative shall deliver an Officer’s Certificate to the Administrative Agent not later than 100 days after the end of such Excess Cash Flow Period, certifying that such Capital Expenditure, Permitted Acquisition or other Investment permitted hereunder, as applicable, will be made in the following Excess Cash Flow Period; provided , further , however , that if such Capital Expenditures, Permitted Acquisition or other Investment permitted hereunder, as applicable, are not actually made in cash within 100 days after the end of such Excess Cash Flow Period, such amount shall be added back to Excess Cash Flow for the subsequent Excess Cash Flow Period,

 

(iv)        to the extent not deducted in determining Consolidated Net Income, Permitted Tax Distributions and Taxes of any Company Group Member that were paid in cash with respect to such Excess Cash Flow Period,

 

(v)         all mandatory prepayments of the Term Loans pursuant to Section 2.11 made during such Excess Cash Flow Period as a result of any Asset Sale or Recovery Event, but only to the extent that such Asset Sale or Recovery Event resulted in a corresponding increase in Consolidated Net Income,

 

(vi)        the aggregate amount actually paid by UK Holdco and the Restricted Subsidiaries in cash during such Excess Cash Flow Period on account of Permitted Acquisitions or other Permitted Investments (including any earn-out payments, but excluding (x) the principal amount of Indebtedness incurred in connection with such expenditures (other than Indebtedness under any revolving credit facility) and (y) the proceeds of equity contributions to, or equity issuances by, UK Holdco which are contributed to any Restricted Subsidiary to finance such expenditures),

 

(vii)       to the extent not funded with the proceeds of Indebtedness (other than Indebtedness under any revolving credit facility (other than the Revolving Facility or any other revolving facility)), the aggregate amount of all regularly scheduled principal amortization payments of Funded Debt made on their due date during such Excess Cash Flow Period (including payments in respect of Capitalized Lease Obligations to the extent not deducted in the calculation of Consolidated Net Income),

 

(viii)      to the extent not funded with the proceeds of Indebtedness (other than Indebtedness under any revolving credit facility), the aggregate amount of all optional prepayments, repurchases and redemptions of Indebtedness (other than (x) the Loans (and the Tower Loans) and (y) in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder) made during the Excess Cash Flow Period,

 

(ix)         the aggregate net amount of non-cash gains on the Disposition of property by UK Holdco and the Restricted Subsidiaries during such Excess Cash Flow Period (other than sales of inventory in the ordinary course of business), to the extent included in arriving at such Consolidated Net Income,

 

(x)          to the extent not funded with proceeds of Indebtedness (other than Indebtedness under any revolving credit facility), the aggregate amount of all Restricted Payments made in cash pursuant to Section 7.3(a) during such Excess Cash Flow Period,

 

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(xi)        any cash payments that are made during such Excess Cash Flow Period and have the effect of reducing an accrued liability that was not accrued during such period,

 

(xii)       the amount of Taxes paid in cash during such Excess Cash Flow Period to the extent they exceed the amount of Tax expense deducted in determining Consolidated Net Income for such period,

 

(xiii)      to the extent not funded with the proceeds of Indebtedness (other than Indebtedness under any revolving credit facility) or deducted in determining Consolidated Net Income, Restricted Payments made under Section 7.3(b)(iv) , (b)(v) , (b)(vi) , (b)(viii) , (b)(xii) and (b)(xiii) ,

 

(xiv)      the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by UK Holdco and any Restricted Subsidiary during such period that are required to be made in connection with any prepayment or satisfaction and discharge of Indebtedness,

 

(xv)       cash expenditures in respect of Swap Contracts during such fiscal year to the extent not deducted in arriving at such Consolidated Net Income,

 

(xvi)      the amount of cash payments made in respect of pensions and other post-employment benefits in such period to the extent not deducted in arriving at such Consolidated Net Income,

 

(xvii)     the amount of cash and Cash Equivalents subject to cash collateral or other deposit arrangements made with respect to Letters of Credit or Swap Contracts; provided , that if such cash and Cash Equivalents cease to be subject to those arrangements, such amount shall be added back to Excess Cash Flow for the subsequent Excess Cash Flow Period when such arrangements cease,

 

(xviii)    a reserve established by UK Holdco or any Restricted Subsidiary in good faith in respect of deferred revenue that any Company Group Member generated during such Excess Cash Flow Period; provided that, to the extent all or any portion of such deferred revenue is not returned to customers during the immediately succeeding Excess Cash Flow Period or otherwise included in the Consolidated Net Income in the immediately subsequent year, such deferred revenue shall be added back to Excess Cash Flow for such subsequent Excess Cash Flow Period,

 

(xix)       cash payments by UK Holdco and its Restricted Subsidiaries in respect of long-term liabilities to the extent not deducted in arriving at such Consolidated Net Income; provided that no such payments are with respect to long-term liabilities with an Affiliate of UK Holdco (or are guaranteed by an Affiliate of UK Holdco), and

 

(xx)        amounts added to Consolidated Net Income pursuant to clauses (1), (3), (4) and (11) of the definition of “Consolidated Net Income.”

 

Excess Cash Flow Application Date ”: as defined in Section 2.11(b) .

 

Excess Cash Flow Period ”: each fiscal year of UK Holdco beginning with the fiscal year ending December 31, 2017.

 

Exchange Act ”: the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

 

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Exchange Rate ”: on any day with respect to any Alternative Currency, the Administrative Agent’s spot rate of exchange for the purchase of such Alternative Currency with Euros in the London foreign exchange market at approximately 11:00 a.m. (London time) on such day.

 

Excluded Assets ”: shall mean, with respect to any US Loan Party (or as it relates to clauses (i) , (iv) , (vi) , (xi) , (xiii) , (xiv) and (xv) , any Loan Party), (i) fee owned real property and all leasehold property (and, for the avoidance of doubt, in no event shall landlord lien waivers, estoppels and collateral access letters be required to be delivered with respect to any such leasehold property), (ii) any vehicles and other assets subject to certificates of title (other than to the extent perfection of the security interest in such assets is accomplished solely by the filing of UCC financing statement), (iii) chattel paper, letter of credit rights and tort claims (other than to the extent perfection of the security interest therein is accomplished solely by the filing of UCC financing statement), (iv) any assets the granting of a security interest in which(1) is prohibited by law (including restrictions in respect of margin stock and financial assistance, fraudulent conveyance, preference, thin capitalization or other similar laws or regulations), (2) requires government or third-party consents (after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, the granting or assignment of which is expressly deemed effective under the UCC or other applicable law notwithstanding any applicable prohibition); provided , that UK Holdco has used commercially reasonable efforts to procure the relevant consents but has been unable to obtain them despite its commercially reasonable efforts and provided further that any damages, compensation, remuneration, profit, rent or income that may be earned, awarded or derived from such assets shall not constitute an Excluded Asset and to the extent any assignment of such asset is prohibited, the asset shall be subject to a pledge or charge or other security interest for which no such consent is required or (3) subject to Section 6.9(c) , results in material adverse accounting, regulatory or U.S. Tax consequences as reasonably determined by the Borrower Representative, (v) (A) any margin stock and (B) subject to Section 6.9(c) , Equity Interests in an Excluded Subsidiary (other than a CFC or a FSHCO) or an Immaterial Subsidiary, (vi) any assets where the cost of obtaining a security interest in, or perfection of a security interest in, such assets exceeds the practical benefit to the Secured Parties afforded thereby (as reasonably determined by the Borrower Representative), (vii) any governmental licenses or state or local franchises, charters and authorizations, to the extent a security interest in any such license, franchise, charter or authorization is prohibited or restricted thereby, (viii) any lease, license, agreement or similar arrangement or any property subject thereto (including pursuant to a purchase money security interest or similar arrangement) to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money arrangement or create a right of termination in favor of any other party thereto (other than the Loan Parties) after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, the assignment of which is expressly deemed effective under the UCC or other applicable law notwithstanding such prohibition, (ix) any cash and Cash Equivalents (other than proceeds of Collateral as to which perfection of the security interest in such proceeds is accomplished solely by the filing of UCC financing statement), deposit and securities accounts (including securities entitlements and related assets) and any other assets requiring perfection through control agreements or perfection by “control” (other than in respect of certificated equity interests in the Borrowers and material wholly-owned Restricted Subsidiaries thereof otherwise required to be pledged), (x) any intent-to-use trademark application prior to the filing and acceptance by the United States Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application, or any registration issuing therefrom, under applicable federal law, (xi) subject to Section 6.9(c) , any assets of any Excluded Subsidiary or any Immaterial Subsidiary, (xii) any property subject to a capital lease, purchase money security interest or, in the case of property of a Loan Party acquired after the Closing Date, pre-existing secured indebtedness not incurred in anticipation of the acquisition by the applicable Loan Party, to the extent that the granting of a security interest in such property would be prohibited under the terms of such capital lease, purchase money financing or secured indebtedness, (xiii) any Equity Interests of any Unrestricted Subsidiary or any Captive Insurance Subsidiary, (xiv) subject to Section 6.9(c) , any Equity Interests of a CFC or of a FSHCO, other than 65% of the total outstanding voting Equity Interests and 100% of the total outstanding non-voting Equity Interests of such CFC or FSHCO that, in each case, are directly owned by a Loan Party, (xv) receivables and related assets (A) sold to any Receivables Subsidiary or (B) otherwise pledged in connection with any Qualified Receivables Financing and (xvi) any assets which are subject to a security interest in respect of Acquired Indebtedness and such security interest constitutes a Permitted Lien.

 

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Excluded Contributions ”: the net cash proceeds and Cash Equivalents or Fair Market Value of assets or property received by or contributed to UK Holdco or the Company Subsidiary Guarantors after the Closing Date (other than (i) such amounts provided by or contributed to UK Holdco or the Company Subsidiary Guarantors from or by any Restricted Subsidiary and (ii) Permitted Cure Securities) from:

 

(a)          contributions to its common or preferred equity capital, and

 

(b)          the sale (other than to UK Holdco or a Restricted Subsidiary or management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Refunding Capital Stock, Disqualified Stock and Designated Preferred Stock) of UK Holdco or any direct or indirect parent,

 

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate signed on behalf of the Borrower Representative on or about the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, the proceeds of which are excluded from the calculation set forth in Section 7.3(a)(3) .

 

Excluded ECP Guarantor ”: in respect of any Swap Obligation, any Loan Party that is not a Qualified ECP Guarantor at the time such Swap Obligation is incurred.

 

Excluded Subsidiary ”: any Subsidiary of UK Holdco that is, at any time of determination, (i) not a Wholly Owned Subsidiary (excluding joint ventures as at the Closing Date), provided that such Subsidiary shall cease to be an Excluded Subsidiary at the time such Subsidiary becomes a Wholly Owned Subsidiary, (ii) a special purpose securitization vehicle (or similar entity), including any Receivables Subsidiary created pursuant to a transaction permitted under this Agreement, (iii) a joint venture, (iv) a not-for-profit Subsidiary, (v) a Captive Insurance Subsidiary, (vi) incorporated in China or India, (vii) a CFC, (viii) a FSHCO, (ix) a Subsidiary of a CFC or of a FSHCO, (x) an Unrestricted Subsidiary, (xi) any Foreign Subsidiary for which the providing of a guarantee could reasonably be expected (A) to result in any violation or breach of, or conflict with, fiduciary duties of such subsidiary’s officers, directors or managers or (B) to result in material adverse Tax consequences as reasonably determined by the Borrower Representative after consulting in good faith with the Administrative Agent or (xii) any Subsidiary to the extent excluded by the application of the Agreed Security Principles.

 

Excluded Swap Obligation ”: any obligation (a “ Swap Obligation ”) of any Excluded ECP Guarantor to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act.

 

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Existing Debt Release/Repayment ”: collectively, the release of the Company and its Subsidiaries as borrowers, issuers, grantors and guarantors, as applicable, and, if applicable, the termination and release of all security interests and Liens granted by the Company and its Subsidiaries in connection therewith, to the extent set forth in the Acquisition Agreement and listed on Schedule 1.1C .

 

Existing Letter of Credit ”: as defined in Section 3.1(c) .

 

Existing Swap Agreement ”: each Swap Agreement listed on Schedule 1.1G .

 

Export Control Laws ”: such export-control Laws as are administered or enforced by the U.S. Government, the European Union, or other export control authority with jurisdiction over any Loan Party, or any subsidiary or joint venture thereof, including, without limitation, the Export Administration Regulations, the International Traffic in Arms Regulations, and the European Union Dual Use Regulation (Council Regulation EC 428/2009 (as amended)).

 

Extended Revolving Commitments ”: one or more Classes of extended Revolving Commitments that result from a Permitted Amendment.

 

Extended Revolving Loans ”: the Revolving Loans made pursuant to any Extended Revolving Commitment or otherwise extended pursuant to a Permitted Amendment.

 

Extended Term Commitments ”: one or more Classes of extended Term Commitments hereunder that result from a Permitted Amendment.

 

Extended Term Loans ”: one or more classes of extended Term Loans that result from a Permitted Amendment.

 

Facility ”: (a) any Term Facility and (b) any Revolving Facility, as the context may require.

 

Facility Fee ”: as defined in Section 2.8(a) .

 

Facility Fee Rate ”: initially, 0.50% per annum, and from and after the first Business Day immediately following the delivery to the Administrative Agent of a Compliance Certificate (pursuant to Section 6.2(c) ), commencing with the Compliance Certificate delivered in respect of the first full fiscal quarter of UK Holdco ending after the Closing Date, wherein the Total First Lien Net Leverage Ratio is (x) greater than 4.50 to 1.00, 0.50% per annum and (y) less than or equal to 4.50 to 1.00, 0.375% per annum.

 

Fair Market Value ”: with respect to any Investment, asset, property or transaction, the price which could be negotiated in an arm’s length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction (as determined in good faith by the Borrower Representative).

 

FATCA ”: as defined in Section 2.19(a) .

 

Federal Funds Rate ”: for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Credit Suisse on such day on such transactions as determined by the Administrative Agent.

 

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Fee Letter ”: the Amended and Restated Fee Letter, dated July 21, 2016, among UK Holdco, the Joint Lead Arrangers and the other parties thereto, as amended, restated, modified or supplemented from time to time in accordance with the terms thereof.

 

Fee Payment Date ”: (a) the last Business Day of each March, June, September and December (commencing on December 31, 2016), (b) the Revolving Termination Date and (c) the date the Total Revolving Commitments are reduced to zero.

 

FHC Tower Borrower ”: as defined in the recitals hereto.

 

FHC Tower Borrower Documents ”: the Tower Co Term Loan Credit Agreement and the Tower Co Subordination Agreement.

 

Financial Compliance Date ”: any date on which the aggregate Outstanding Amount of all Revolving Loans, Swingline Loans and undrawn L/C Obligations (excluding (i) non-Collateralized, issued and undrawn L/C Obligations in an amount up to $10,000,000 and (ii) Collateralized Letters of Credit) of the Revolving Borrowers exceeds 30% of the Revolving Commitments as of such date.

 

Financial Covenant Event of Default ”: as defined in Section 9.3(b) .

 

Financial Definitions ”: the definitions of Consolidated Interest Expense, Consolidated Net Income, Total First Lien Net Leverage Ratio, Total Net Leverage Ratio, Consolidated Total Indebtedness, Consolidated EBITDA, Fixed Charge Coverage Ratio, Fixed Charges, Net Income and Total Assets, and any defined term or section reference included in such definitions.

 

First Priority Refinancing Revolving Facility ”: as defined in the definition of “Permitted First Priority Refinancing Debt.”

 

First Priority Refinancing Term Facility ”: as defined in the definition of “Permitted First Priority Refinancing Debt.”

 

Fixed Charge Coverage Ratio ”: with respect to UK Holdco and its Restricted Subsidiaries for any period, the ratio of Consolidated EBITDA of UK Holdco and its Restricted Subsidiaries for such period to the Fixed Charges of UK Holdco and its Restricted Subsidiaries for such period. In the event that UK Holdco or any of its Restricted Subsidiaries Incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than in the case of revolving advances under any Qualified Receivables Financing in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Fixed Charge Coverage Ratio Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

 

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For purposes of making the computation referred to above, Investments (including any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary), acquisitions, dispositions, mergers (including the Transactions), consolidations and disposed or discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and operational changes, that UK Holdco or any of its Restricted Subsidiaries has both determined to make and made after the Closing Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “ pro forma event ”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers (including the Transactions), consolidations, discontinued operations and operational changes (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If, since the beginning of such period, any Person that subsequently became a Restricted Subsidiary or was merged with or into UK Holdco or any Restricted Subsidiary since the beginning of such period shall have made or effected any Investment, acquisition, disposition, merger, consolidation or discontinued operation, in each case with respect to an operating unit of a business, or operational change that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, discontinued operation, or operational change had occurred at the beginning of the applicable four-quarter period.

 

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative to the extent identifiable and supportable. Any such pro forma calculation may include, without duplication, (1) adjustments appropriate to reflect cost savings, operating expense reductions, restructuring charges and expenses and synergies reasonably expected to result from the applicable event to the extent set forth in the definition of “Consolidated EBITDA” and (2) all adjustments of the nature set forth on Schedule 1.1H to the extent such adjustments, without duplication, continue to be applicable to the reference period.

 

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower Representative may designate. In connection with any Limited Condition Acquisition, the Borrower Representative may determine baskets and ratios in accordance with Section 1.4 .

 

Fixed Charges ”: with respect to UK Holdco and the Restricted Subsidiaries for any period, the sum of:

 

(1)         Consolidated Interest Expense of such Person for such period; and

 

(2)         all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of UK Holdco and the Restricted Subsidiaries;

 

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provided , however , that, notwithstanding the foregoing, any charges arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred Stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges.

 

Fixed GAAP Date ”: the Closing Date; provided that at any time after the Closing Date, the Borrower Representative may by written notice to the Administrative Agent elect to change the Fixed GAAP Date and upon such notice, the Fixed GAAP Date shall be, at the election of the Borrower Representative, either the first day of the fiscal quarter in which such notice is delivered or the first day of fiscal quarter beginning after delivery of such notice, and for all periods thereafter.

 

Fixed GAAP Terms ”: (a) the definitions of the terms “Capitalized Lease Obligation,” “Consolidated Interest Expense,” “Consolidated Net Income,” “Total First Lien Net Leverage Ratio,” “Total Net Leverage Ratio,” “Consolidated Total Indebtedness,” “Consolidated EBITDA,” “EBITDA” and “Indebtedness,” (b) all defined terms in this Agreement to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions, and (c) any other term or provision of this Agreement that, at the Borrower Representative’s election, may be specified by the Borrower Representative by written notice to the Administrative Agent from time to time.

 

Foreign Plan ”: any pension plan, benefit plan, fund or other similar program established, maintained or contributed to by a Loan Party or any Subsidiary of a Loan Party primarily for the benefit of individuals residing outside the United States (other than plans, funds or similar programs that are maintained exclusively by a Governmental Authority), and which is not subject to ERISA or the Code.

 

Foreign Benefit Plan Event ”: with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make the required contributions or payments, under any applicable law or the terms of the Foreign Plan, on or before the due date for such contributions or payments, (c) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, (d) the incurrence of any liability by a Loan Party or any of Subsidiary of a Loan Party on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, (e) the occurrence of any transaction that could result in a Loan Party or any Subsidiary of a Loan Party incurring, or the imposition on a Loan Party or any Subsidiary of a Loan Party of, any fine, excise tax or penalty resulting from any noncompliance with applicable law or (f) any other event or condition with respect to a Foreign Plan that could result in liability of a Loan Party or any Subsidiary of a Loan Party.

 

Foreign Guarantor Provisions ”: the Foreign Guarantor Provisions set forth on Schedule 1.8 .

 

Foreign Loan Party ”: any Loan Party that is not a US Loan Party.

 

Foreign Subsidiary ”: any Subsidiary of Holdings that is not a US Subsidiary.

 

Forms ”: as defined in Section 2.19(j) .

 

FRB ”: the Board of Governors of the Federal Reserve System of the United States.

 

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FSHCO ”: any Subsidiary of Holdings, substantially all the assets of which consist of Equity Interests of one or more CFCs or other FSHCOs.

 

Funded Debt ”: as to any Person, all Indebtedness described in clauses (1)(a), (1)(b) (excluding, for the avoidance of doubt, surety bonds, performance bonds and similar instruments) and (1)(d) of the definition of “Indebtedness” of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Opco Borrowers, Indebtedness in respect of the Loans.

 

Funding Default ”: as defined in Section 2.17(d) .

 

Future Guarantor ”: as defined in Section 8.12(g) .

 

GAAP ”: generally accepted accounting principles in the United States of America that are in effect on the Fixed GAAP Date (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement); provided , that at any date after the Closing Date the Borrower Representative may make an irrevocable election to establish that GAAP shall mean GAAP as in effect on a date that is on or prior to the date of such election. At any time after the date of this Agreement, the Borrower Representative may elect to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided that any calculation or determination in this Agreement that requires the application of GAAP for periods that include fiscal quarters ended prior to the Issuer’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.

 

German Borrower ”: a Revolver Co-Borrower resident for tax purposes in Germany.

 

German Collateral ”: as defined in Section 10.1(c) .

 

“German GmbH & Co. KG Guarantor ”: as defined in Section 8.12(d) .

 

German GmbH Guarantor ”: as defined in Section 8.12(d) .

 

German Guarantor ”: as defined in Section 8.12(d) .

 

German Qualifying Lender ”: a Lender which is beneficially entitled to interest payable to that Lender in respect of any amounts hereunder and is:

 

(a)          resident for tax purposes in Germany;

 

(b)          lending through a Facility Office in Germany to which the relevant interest payment is effectively attributable for tax purposes; or

 

(c)          a German Treaty Lender.

 

German Treaty ”: as defined in the definition of “ German Treaty State ”.

 

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German Treaty Lender ”: a Lender which (a) is treated as a resident of a German Treaty State for the purposes of the German Treaty and (b) does not carry on a business in Germany through a permanent establishment with which that Lender’s participation in the Loan is effectively connected.

 

German Treaty Stat e”: a jurisdiction having a double taxation agreement with Germany (a “ German Treaty ”) which makes provision for full exemption from tax imposed by Germany on interest.

 

Global Intercompany Note ”: a note substantially in the form of Exhibit J .

 

Governmental Approval ”: any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

 

Governmental Authority ”: any nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank, administrative tribunal or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies exercising such powers or functions, such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

 

Group ”: as defined in Section 6.19 .

 

Group Members ”: the collective reference to the Company Group Members and the Tower Group Members.

 

guarantee ”: as to any Person, a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness of another Person.

 

Guarantee ”: as defined in Section 8.2 .

 

Guarantee Obligation ”: as to any Person (the “ guaranteeing person ”), any obligation (including obligations arising by way of parallel debt), including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees, any Indebtedness (the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower Representative in good faith.

 

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Guaranteed Loan Party ”: as defined in Section 8.12(d).

 

Guarantor Joinder Agreement ”: an agreement substantially in the form of Exhibit G .

 

Guarantor Obligations ”: as defined in Section 8.1(b) .

 

Guarantors ”: the collective reference to the Tower Guarantors and the Company Guarantors (in each case, except to the extent released in accordance with this Agreement).

 

Hedging Obligations ”: with respect to any Person, the obligations of such Person under Swap Agreements.

 

Holding Company ”: in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

 

Holdings ”: as defined in the preamble hereto.

 

Honor Date ”: as defined in Section 3.5 .

 

IFRS ”: International Financial Reporting Standards (formerly International Accounting Standards) as issued by the International Accounting Standards Board and its predecessor as in effect from time to time.

 

Immaterial Subsidiary ”: each Subsidiary which, as of the most recent fiscal quarter of UK Holdco, for the period of four consecutive fiscal quarters then ended, for which financial statements have been or were required to have been delivered pursuant to Section 6.1 (or, prior to delivery of the financial statements for the fiscal year of UK Holdco ending December 31, 2016, the financial statements for the six-month period ending June 30, 2016), contributed five percent (5%) or less of Consolidated EBITDA for such period; provided that, if at any time the aggregate amount of EBITDA attributable to all Subsidiaries that are Immaterial Subsidiaries exceeds ten percent (10%) of Consolidated EBITDA for any such period, the Borrower Representative (or, in the event the Borrower Representative has failed to do so within 30 days, the Administrative Agent) shall designate sufficient Subsidiaries to eliminate such excess, and such designated Subsidiaries shall no longer constitute Immaterial Subsidiaries under this Agreement.

 

Incremental Amendment ”: as defined in Section 2.25(c) .

 

Incremental Arranger ”: as defined in Section 2.25(a) .

 

Incremental Facility ”: any Class of Incremental Term Commitments or Revolving Commitment Increases and the extensions of credit made thereunder, as the context may require.

 

Incremental Facility Closing Date ”: as defined in Section 2.25(c) .

 

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Incremental Lender ”: an Incremental Term Lender or Incremental Revolving Lender, as the context may require.

 

Incremental Loan ”: any Class of Incremental Term Loans or Incremental Revolving Loans, as the context may require.

 

Incremental Revolving Lender ”: as defined in Section 2.25(a) .

 

Incremental Revolving Loans ”: as defined in Section 2.25(a) .

 

Incremental Term Commitments ”: as defined in Section 2.25(a) .

 

Incremental Term Lender ”: as defined in Section 2.25(a) .

 

Incremental Term Loan Maturity Date ”: the date on which an Incremental Term Loan matures as set forth in the Incremental Amendment relating to such Incremental Term Loan.

 

Incremental Term Loans ”: as defined in Section 2.25(a) .

 

Incremental Term Percentage ”: as to any Incremental Term Lender at any time, the percentage which such Lender’s Incremental Term Commitments then constitutes of the aggregate Incremental Term Commitments then outstanding.

 

Incremental Yield Differential ”: as defined in Section 2.25(a)(vii) .

 

Incur ”: with respect to any Indebtedness, issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

 

Indebtedness ”: with respect to any Person:

 

(a)          the principal and premium (if any) of any Indebtedness of such Person, whether or not contingent, (i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (iii) representing the deferred and unpaid purchase price of any property, asset or business, except (x) any such balance that constitutes a trade payable, accrued expense or similar obligation to a trade creditor and (y) any acquisition earn-out obligations, (iv) in respect of Capitalized Lease Obligations or (v) representing any Hedging Obligations, other than Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP, provided that Indebtedness of any direct or indirect parent of UK Holdco appearing upon the balance sheet of UK Holdco solely by reason of push-down accounting under GAAP shall be excluded;

 

(b)          to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations described in clause (a) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

 

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(c)          to the extent not otherwise included, obligations described in clause (a) of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of (i) the Fair Market Value of such asset at such date of determination, and (ii) the amount of such Indebtedness of such other Person;

 

provided that (a) Contingent Obligations Incurred in the ordinary course of business, (b) obligations under or in respect of Receivables Financings, (c) Other Obligations associated with other post-employment benefits and pension plans, (d) any operating leases as such an instrument would be determined in accordance with GAAP on the Closing Date, (e) in connection with the purchase by UK Holdco or any Restricted Subsidiary of any business, post-closing payment adjustments to which the seller may be entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing until 30 days after any such obligation becomes contractually due and payable, (f) deferred or prepaid revenues, (g) any Capital Stock (other than Disqualified Stock), (h) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, and (i) premiums payable to, and advance commissions or claims payments from, insurance companies, shall not constitute Indebtedness.

 

Indemnitee ”: as defined in Section 11.5 .

 

Indemnified Liabilities ”: as defined in Section 11.5 .

 

Independent Financial Advisor ”: an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing that is, in the good faith determination of Holdings or its direct or indirect parent, qualified to perform the task for which it has been engaged.

 

Initial Term Loan ”: a Loan made pursuant to Section 2.1(b) .

 

Insolvency ”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

Insolvent ”: pertaining to a condition of Insolvency.

 

Intellectual Property Security Agreements ”: collectively, the US Intellectual Property Security Agreements and each other intellectual property security agreement or intellectual property security agreement supplement executed and delivered pursuant to Section 6.9 , Section 6.11 , Section 6.15 or Schedule 1.1D-1 (as such schedule may be amended or supplemented from time to time in accordance with the Agreed Security Principles), in each case as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with its terms.

 

Intercreditor Agreement ”: an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent, as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with its terms.

 

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Interest Payment Date ”: (a) as to any ABR Loan (including any Swingline Loan), the last Business Day of each March, June, September and December (commencing on December 31, 2016) and the final maturity date of such Loan, (b) as to any Eurocurrency Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurocurrency Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period, (d) as to any Eurocurrency Loan (except in the case of the repayment or prepayment of all Loans or, as to any Revolving Loan, the Revolving Termination Date or such earlier date on which the Revolving Commitments are terminated), the date of any repayment or prepayment made in respect thereof and (e) as to any Swingline Loan, the last Business Day of each March, June, September and December (commencing on December 31, 2016), and the Revolving Termination Date.

 

Interest Period ”: as to any Eurocurrency Loan, the period commencing on the borrowing, continuation or conversion date, as the case may be, with respect to such Eurocurrency Loan and ending (i) one, two, three or six (in each case, subject to availability) months thereafter or (ii) if approved by all Lenders under the relevant Facility, twelve months thereafter, one week thereafter or such other period as all relevant Lenders shall agree, in each case as selected by the Borrower Representative in its irrevocable notice of borrowing, continuation or conversion, substantially in the form of Exhibit H , or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(i)          if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)         the Borrower Representative may not select an Interest Period under any Revolving Facility that would extend beyond the Revolving Termination Date and the Opco Borrowers (with respect to the Term Loans other than the Incremental Term Loans) and the Borrowers (with respect to the Incremental Term Loans) may not select an Interest Period under the Term Facility beyond the date final payment is due on the Term Loans;

 

(iii)        any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month;

 

(iv)        if the Borrower Representative shall fail to specify the Interest Period in any notice of borrowing of, conversion to, or continuation of, Eurocurrency Loans, the Borrower Representative shall be deemed to have selected an Interest Period of one month; and

 

(v)         the Borrower Representative shall be permitted to select an Interest Period of one week on no more than ten (10) instances per annum.

 

Investment Grade Rating ”: a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

 

Investment Grade Securities ”:

 

(1)         securities issued or directly and fully guaranteed or insured by the government or any agency or instrumentality thereof (other than Cash Equivalents) of the U.S., Canada, any country that is a member of the European Union, the United Kingdom, Japan or Switzerland;

 

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(2)         securities that have an Investment Grade Rating;

 

(3)         investments in any fund that invests at least 95% of its assets in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

 

(4)         corresponding instruments in countries other than the United States customarily utilized for high quality investments.

 

Investments ”: with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances or extensions of credit to customers and, vendors, commission, travel and similar advances to officers, directors, employees and consultants made in the ordinary course of business) and purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person. For purposes of the definition of “Unrestricted Subsidiary” and Section 7.3 :

 

(1)         “Investments” shall include the portion (proportionate to UK Holdco’s direct or indirect equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of UK Holdco at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, UK Holdco shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

 

(a)          UK Holdco’s direct or indirect “Investment” in such Subsidiary at the time of such redesignation less

 

(b)          the portion (proportionate to UK Holdco’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

 

(2)         any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Borrower Representative.

 

For the avoidance of doubt, a guarantee by UK Holdco or a Restricted Subsidiary of the obligations of another Person (the “primary obligor”) shall not be deemed to be an Investment by UK Holdco or such Restricted Subsidiary in the primary obligor to the extent that such obligations of the primary obligor are in favor of UK Holdco or any Restricted Subsidiary, and in no event shall (x) a guarantee of an operating lease or other business contract of UK Holdco or any Restricted Subsidiary or (y) intercompany indebtedness among UK Holdco and the Restricted Subsidiaries made in the ordinary course of business and having a term not exceeding 364 days be deemed an Investment.

 

IRS ”: as defined in Section 11.6(c)(i) .

 

Issuing Lender ”: (i) Credit Suisse, Bank of America, N.A., Royal Bank of Canada, Citibank, N.A., Barclays Bank PLC, Goldman Sachs Bank USA or in each case any of their respective affiliates, each in its capacity as issuer of any Letter of Credit and (ii) such other Revolving Lenders or Affiliates of Revolving Lenders that are reasonably acceptable to the Administrative Agent and the Borrower Representative that agrees, pursuant to an agreement with and in form and substance reasonably satisfactory to the Administrative Agent and the Borrower Representative, to be bound by the terms hereof applicable to such Issuing Lender. “ ITA 2007 ” means the United Kingdom Income Tax Act 2007.

 

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Joint Bookrunners ”: collectively, the Joint Bookrunners listed on the cover page hereof.

 

Joint Lead Arrangers ”: collectively, the Joint Lead Arrangers listed on the cover page hereof.

 

Junior Indebtedness ”: collectively, (i) Subordinated Indebtedness and (ii) Indebtedness that is secured on a junior lien basis to the Obligations.

 

Latest Maturity Date ”: at any date of determination, the latest maturity or expiration date applicable to any Loan or Commitment hereunder at such time, including the latest maturity or expiration date of any Incremental Term Loans, Other Term Loan, any Other Term Commitment, any Other Revolving Loan or any Other Revolving Commitment.

 

Laws ”: collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

L/C Advance ”: with respect to each L/C Participant, such L/C Participant’s funding of its participation in any Letter of Credit in accordance with Section 3.4(a) .

 

L/C Borrowing ”: an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or Refinanced as a Revolving Borrowing.

 

L/C Commitment ”: $25,000,000.

 

L/C Credit Extension ”: with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

 

L/C Obligations ”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5 . For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 3.9 and, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

L/C Participants ”: the collective reference to all the Revolving Lenders other than each Issuing Lender.

 

L/C Sublimit ”: with respect to any Issuing Lender, (i) the amount set forth opposite the name of such Issuing Lender on Schedule 1.1A-2 or (ii) such other amount specified in the agreement by which such Issuing Lender becomes an Issuing Lender hereunder.

 

Legal Reservations ”:

 

(1)         the principle that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law);

 

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(2)         the time barring of claims under any applicable law (including the Limitation Acts) of any Relevant Jurisdiction, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void and defenses of set-off or counterclaim;

 

(3)         the principle that in certain circumstances Liens granted by way of fixed charge may be re-characterized as a floating charge or that Liens purported to be constituted as an assignment may be re-characterized as a charge;

 

(4)         the principle that additional interest imposed pursuant to any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and therefore void;

 

(5)         the principle that a court may not give effect to an indemnity for legal costs incurred by an unsuccessful litigant;

 

(6)         the principle that the creation or purported creation of a Lien over any contract or agreement which is subject to a prohibition on transfer, assignment or charging may be void, ineffective or invalid and may give rise to a breach of the contract or agreement over which a Lien has purportedly been created;

 

(7)         similar principles, rights and defenses under the laws of any Relevant Jurisdiction; and

 

(8)         any other matters which are set out as qualifications or reservations as to matters of law of general application in the legal opinions delivered pursuant to this Agreement.

 

Lenders ”: as defined in the preamble hereto; provided that, unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include the Issuing Lenders.

 

Letter of Credit Expiration Date ”: the day that is five (5) Business Days prior to the scheduled Revolving Termination Date (or, if such day is not a Business Day, the immediately preceding Business Day).

 

Letters of Credit ”: as defined in Section 3.1(a) .

 

Lien ”: any mortgage, deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

 

Limitation Acts ” means the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and the Prescription and Limitation (Scotland) Act 1973, in each case of the United Kingdom.

 

Limited Condition Acquisition ”: any acquisition or other Investment permitted hereunder, including by way of merger, amalgamation or consolidation, by UK Holdco or one or more of the Restricted Subsidiaries, whose consummation is not conditioned upon the availability of, or on obtaining, third party financing from a Person that is not an Affiliate of UK Holdco; provided that the Consolidated Net Income (and any other financial term derived therefrom), other than for purposes of calculating any ratios in connection with the Limited Condition Acquisition, shall not include any Consolidated Net Income of, or attributable to, the target company or assets associated with any such Limited Condition Acquisition unless and until the closing of such Limited Condition Acquisition shall have actually occurred.

 

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Loan ”: any loan made or maintained by any Lender pursuant to this Agreement.

 

Loan Documents ”: this Agreement, any Intercreditor Agreement, the Notes, the Security Documents, the Tower Borrower Documents, any Refinancing Amendment, any Incremental Amendment, any Loan Modification Agreement, any Co-Borrower Joinder and any other document designated as a “Loan Document” by the Administrative Agent and the Borrower Representative from time to time.

 

Loan Modification Agent ”: as defined in Section 2.28(a) .

 

Loan Modification Agreement ”: as defined in Section 2.28(b) .

 

Loan Modification Offer ”: as defined in Section 2.28(a) .

 

Loan Note Instrument (Notes) ”: the Loan Note Instrument constituting $500,000,000 Principal Amount Floating Rate Unsecured Loan Notes Due 2024 , dated as of the Closing Date, issued by UK Holdco.

 

Loan Note Instrument (Term Loans) ”: the Loan Note Instrument constituting $ 908,500,000 Principal Amount Floating Rate Secured Loan Notes Due 2024 , dated as of the Closing Date, issued by UK Holdco.

 

Loan Note Instruments ”: the collective reference to the Loan Note Instrument (Notes) and the Loan Note Instrument (Term Loans).

 

Loan Parties ”: the collective reference to the Borrowers and the Guarantors.

 

London Banking Day ”: any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market.

 

Lux Company Borrower ”: as defined in the recitals hereto.

 

Luxembourg Borrower ”: any Borrower whose registered office/place of central administration is in Luxembourg and whose centre of main interest (as that term is used in Article 3(1) of the Council Regulation (EC) n° 1346/2000 of 29 May 2000 on insolvency proceedings) is in Luxembourg.

 

Luxembourg Exempt Lender ”: in relation to a Luxembourg Borrower, a Lender which is (otherwise than by reason of being a Luxembourg Treaty Lender) able to receive interest from that Borrower without a deduction or withholding for, or on account of, Tax imposed by Luxembourg.

 

Luxembourg Guarantor ”: any Guarantor whose registered office/place of central administration is in Luxembourg and whose centre of main interest (as that term is used in Article 3(1) of the Council Regulation (EC) n° 1346/2000 of 29 May 2000 on insolvency proceedings) is in Luxembourg.

 

Luxembourg Insolvency Event ”: in relation to any Luxembourg Loan Party or any of its assets, any corporate action, legal proceedings or other procedure or step in relation to bankruptcy ( faillite ), insolvency, judicial or voluntary liquidation ( liquidation judiciaire ou volontaire ), composition with creditors ( concordat préventif de la faillite ), moratorium or reprieve from payment ( sursis de paiement ), controlled management ( gestion contrôlée ) and fraudulent conveyance ( action paulienne ), general settlement with creditors, reorganization or similar laws affecting the rights of creditors generally.

 

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Luxembourg Loan Party ”: any Loan Party whose registered office/place of central administration is in Luxembourg and whose centre of main interest (as that term is used in Article 3(1) of the Council Regulation (EC) n° 1346/2000 of 29 May 2000 on insolvency proceedings) is in Luxembourg.

 

Luxembourg Qualifying Lender ”: in respect of amounts payable by any Luxembourg Borrower, a Lender which is beneficially entitled to interest payable to that Lender in respect of a Loan or Letter of Credit and is (i) lending through (A) an entity tax resident in Luxembourg, or (B) a permanent establishment in Luxembourg to which the relevant interest payment is effectively attributable for tax purposes, (ii) a Luxembourg Exempt Lender or (iii) a Luxembourg Treaty Lender.

 

Luxembourg Treaty ”: as defined in the definition of “Luxembourg Treaty State”.

 

Luxembourg Treaty Lender ”: a Lender which (i) is treated as a resident of a Luxembourg Treaty State for the purposes of the Luxembourg Treaty, (ii) does not carry on a business in Luxembourg through a permanent establishment with which that Lender's participation in the Loan or Letter of Credit is effectively connected and (iii) fulfils any other conditions which must be fulfilled under the relevant Luxembourg Treaty and the laws of Luxembourg to obtain exemption from taxation imposed by Luxembourg on interest.

 

Luxembourg Treaty State ”: a jurisdiction having a double taxation agreement with Luxembourg which makes provision for full exemption from tax imposed by Luxembourg on interest (a “ Luxembourg Treaty ”).

 

Majority Facility Lenders ”: (a) with respect to any Revolving Facility, the Majority Revolving Lenders with respect to such Revolving Facility and (b) with respect to any Term Facility, the Majority Term Lenders with respect to such Term Facility.

 

Majority Revolving Lenders ”: at any time with respect to any Revolving Facility, (i) prior to the termination of all Revolving Commitments with respect to such Revolving Facility, non-Defaulting Lenders holding more than 50% of the Total Revolving Commitments and (ii) after the termination of all the Revolving Commitments with respect to such Revolving Facility, non-Defaulting Lenders holding more than 50% of the Total Revolving Extensions of Credit with respect to such Revolving Facility.

 

Majority Term Lenders ”: at any time with respect to any Term Facility, Term Lenders that are non-Defaulting Lenders having Term Loans and unused and outstanding Term Commitments with respect to such Term Facility representing more than 50% of the sum of all Term Loans outstanding and unused and outstanding Term Commitments with respect to such Term Facility at such time.

 

Management Agreement ”: one or more management services or consulting services agreements, dated on or about the Closing Date between UK Holdco or any direct or indirect parent company or any Restricted Subsidiary and the Sponsors and any other beneficial owner in the equity in the Borrower Representative or any direct or indirect parent company of the Borrower Representative as of the Closing Date, or a successor agreement between the Borrower Representative or any of its Affiliates and such parties, as may be amended, supplemented or otherwise modified from time to time; provided that such amendments, supplements or modifications are not materially adverse to the Lenders as determined in good faith by the Borrower Representative.

 

Management Determination ”: as defined in Section 8.12(d) .

 

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Management Investor ”: any Person who is a director, officer or otherwise a member of management of UK Holdco, any of its Restricted Subsidiaries or any of UK Holdco’s direct or indirect parent companies on the Closing Date immediately after giving effect to the Transactions.

 

Margin Stock ”: as set forth in Regulation U of the Board of Governors of the United States Federal Reserve System, or any successor thereto.

 

Master Agreement ”: as defined in the definition of “Qualified Counterparty.”

 

Material Adverse Effect ”: a material adverse effect on (a) the business, assets, liabilities, operations, financial condition or operating results of UK Holdco and the Restricted Subsidiaries taken as a whole, (b) the ability of the Loan Parties (taken as a whole) to perform their obligations under the Loan Documents or (c) the rights, remedies and benefits available to, or conferred upon, the Administrative Agent, any Lender or any Secured Party hereunder or thereunder.

 

Material Restricted Subsidiary ”: at any date, a Restricted Subsidiary which is a Material Subsidiary.

 

Material Subsidiary ”: at any date, a Subsidiary which is not an Immaterial Subsidiary.

 

Materials of Environmental Concern ”: any chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, any petroleum or petroleum products, asbestos, polychlorinated biphenyls, lead or lead-based paints or materials, radon, urea-formaldehyde insulation, molds fungi, mycotoxins, and radioactivity, or radiofrequency radiation that are regulated pursuant to Environmental Law or may have an adverse effect on human health or the environment.

 

Maximum Amount ”: as defined in Section 11.20(a) .

 

Minimum Extension Condition ”: as defined in Section 2.28(c) .

 

Minimum Guarantor Coverage Threshold ”: (a) the aggregate EBITDA of the Loan Parties (other than the Tower Group Members) equals or exceeds 80% of the Consolidated EBITDA of UK Holdco and its Restricted Subsidiaries and (b) the aggregate gross assets of the Loan Parties (other than the Tower Group Members) (calculated on an unconsolidated basis and excluding intercompany items (other than intercompany profit margins)) equals or exceeds 80% of Total Assets of UK Holdco and its Restricted Subsidiaries; provided that the determination of Consolidated EBITDA and Total Assets pursuant to this definition shall exclude (i) the EBITDA and gross assets of any Subsidiary of UK Holdco that is an Excluded Subsidiary (other than one that is an “Excluded Subsidiary” by reason of clauses (vii) through (ix) and (xi)(B) of the definition thereof) and (ii) the EBITDA of Restricted Subsidiaries that have an EBITDA of less than $0.

 

Moody’s ”: Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

 

Multiemployer Plan ”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

Net Assets ”: as defined in Section 8.12(d) .

 

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Net Cash Proceeds ”: (a) in connection with any Asset Sale, any Recovery Event or any other sale of assets the proceeds thereof actually received in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of (i) attorneys’ fees, accountants’ fees, investment banking fees, and other bona fide fees, costs and expenses actually incurred in connection therewith, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale, Recovery Event or other sale of assets (other than any Lien pursuant to a Security Document), (iii) Taxes paid and the Borrower Representative’s reasonable and good faith estimate of income, franchise, sales, and other applicable Taxes required to be paid by any Company Group Member in connection with such Asset Sale, Recovery Event or other sale of assets, (iv) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to the seller’s indemnities and representations and warranties to the purchaser in respect of such Asset Sale, Recovery Event or other sale of assets owing by any Company Group Member in connection therewith and which are reasonably expected to be required to be paid; provided that to the extent such indemnification payments are not made and are no longer reserved for, such reserve amount shall constitute Net Cash Proceeds, (v) cash escrows to any Company Group Member from the sale price for such Asset Sale, Recovery Event or other sale of assets; provided that any cash released from such escrow shall constitute Net Cash Proceeds upon such release, (vi) in the case of a Recovery Event, costs of preparing assets for transfer upon a taking or condemnation and (vii) other customary fees and expenses actually incurred in connection therewith and net of Taxes paid or reasonably estimated to be payable as a result thereof (after taking into account the reduction in Tax liability resulting from any available operating losses and net operating loss carryovers, Tax credits, and Tax credit carry forwards, and similar Tax attributes or deductions and any Tax sharing arrangements), and (b) in connection with any issuance or sale of Capital Stock or any incurrence or issuance of Indebtedness, the cash proceeds received from any such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other bona fide fees and expenses actually incurred in connection therewith.

 

Net Income ”: with respect to any Person, the net income (loss) attributable to such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

 

Non-Debt Fund Affiliate ”: any Affiliate of Holdings other than (i) Holdings, the Borrowers or any Subsidiary of Holdings or the Borrowers, (ii) any Debt Fund Affiliate and (iii) any natural person.

 

Non-Excluded Taxes ”: as defined in Section 2.19(a) .

 

Non-Guarantor Subsidiary ”: any Subsidiary that is not a Subsidiary Guarantor.

 

Non-U.S. Lender ”: as defined in Section 2.19(j) .

 

Note ”: a Term Loan Note, a Revolving Loan Note or a Swingline Loan Note.

 

Notice of Intent to Cure ”: an Officer’s Certificate signed on behalf of the Borrower Representative delivered to the Administrative Agent, with respect to each period of four consecutive fiscal quarters for which a Cure Right will be exercised, on the earlier of the date the financial statements required under Section 6.1(a) or (b) have been or were required to have been delivered with respect to the most recent end of such period of four fiscal quarters, which Officer’s Certificate shall contain a computation of the applicable Event of Default and notice of intent to cure such Event of Default through the issuance of Permitted Cure Securities as contemplated under Section 9.4 .

 

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Obligations ”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans or the maturity of Cash Management Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Borrower or any Guarantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, and all other obligations and liabilities (including obligations arising by way of parallel debt) of any Borrower or any other Loan Party (including with respect to guarantees) to the Administrative Agent, any Lender or any other Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, or any other Loan Document or any other document made, delivered or given in connection herewith or therewith or any Specified Swap Agreement (other than, in the case of any Excluded ECP Guarantor, any Excluded Swap Obligations arising thereunder) or any Specified Cash Management Agreement, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by any Borrower or any Guarantor pursuant to any Loan Document), guarantee obligations or otherwise.

 

OFAC ”: the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

Offer Price ”: as defined in the definition of “Dutch Auction.”

 

Officer’s Certificate ”: a certificate signed on behalf of the Borrower Representative or any other Group Member by any Responsible Officer thereof.

 

OID ”: with respect to any Term Loan or Revolving Facility (or repricing thereof), or any Incremental Term Loan or Revolving Commitment Increase, as the case may be, the amount of any original issue discount or upfront fees (which shall be deemed to constitute a like amount of original issue discount), but excluding any arrangement, structuring, commitment or other fees payable in connection therewith that are not shared with all Lenders in the primary syndication thereof, which excluded fees shall not be included and equated to the interest rate.

 

Onex ”: Onex Corporation.

 

Onex GP Foreign Pledge Agreement ”: the Onex GP Foreign Pledge Agreement, dated as of the Closing Date, in substantially in the form of Exhibit A-1 .

 

Onex GP US Pledge Agreement ”: the Onex GP US Pledge Agreement, dated as of the Closing Date, in substantially in the form of Exhibit A-2 .

 

Onex LP Foreign Pledge Agreement ”: the Onex LP Foreign Pledge Agreement, dated as of the Closing Date, in substantially in the form of Exhibit A-3 .

 

Onex LP US Pledge Agreement ”: the Onex LP US Pledge Agreement, dated as of the Closing Date, in substantially in the form of Exhibit A-4 .

 

Opco Borrowers ”: the Company Borrowers and the Co-Borrowers.

 

Organizational Document ”: (i) relative to each Person that is a corporation, its charter and its by-laws (or similar documents), (ii) relative to each Person that is a limited liability company, its certificate of formation and its operating agreement (or similar documents), (iii) relative to each Person that is a limited partnership, its certificate of formation or registration and its limited partnership agreement (or similar documents), (iv) relative to each Person that is a general partnership, its partnership agreement (or similar document), (v) relative to each Person that is an exempted limited partnership, its exempted limited partnership agreement, (vi) relative to each Person that is an exempted company, its memorandum and articles of association and (vii) relative to any Person that is any other type of entity, such documents as shall be comparable to the foregoing.

 

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Other Applicable Indebtedness ”: as defined in Section 2.11(c) .

 

Other Guarantor ”: as defined in Section 8.12(f) .

 

Other Obligations ”: any principal, interest, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Other Obligations with respect to the Loans shall not include fees or indemnification in favor of third parties other than the Secured Parties.

 

Other Revolving Commitments ”: one or more Classes of revolving credit commitments hereunder or extended Revolving Commitments hereunder that result from a Refinancing Amendment.

 

Other Revolving Loans ”: the Revolving Loans made pursuant to any Other Revolving Commitment.

 

Other Taxes ”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including any penalties, interest and additional amounts with respect thereto) arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

 

Other Term Commitments ”: one or more Classes of term loan commitments hereunder that result from a Refinancing Amendment.

 

Other Term Loans ”: one or more Classes of Term Loans that result from a Refinancing Amendment.

 

Outstanding Amount ”: (a) with respect to the Term Loans, Revolving Loans and Swingline Loans on any date, the Dollar Amount of the aggregate outstanding principal amount thereof on such date after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Loans (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Borrowing) and Swingline Loans, as the case may be, occurring on such date and (b) with respect to any L/C Obligations on any date, the Dollar Amount of the aggregate outstanding amount thereof on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes thereto as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Borrowing) or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

Overnight Rate ”: for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Rate and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of the Administrative Agent in the applicable offshore interbank market for such currency to major banks in such interbank market.

 

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Parent Holding Company ”: any direct or indirect parent entity of Holdings which holds directly or indirectly 100% of the Equity Interest of Holdings and which does not hold Equity Interests in any other Person (except for any other Parent Holding Company).

 

Participant ”: as defined in Section 11.6(c) .

 

Participant Register ”: as defined in Section 11.6(c) .

 

Participating Member State ”: any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

Patriot Act ”: USA PATRIOT Improvement and Reauthorization Act, Pub. L. 109-177 (signed into law March 9, 2009), as amended.

 

PBGC ”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

Perfection Requirements ”: the making or procuring of appropriate registrations, filings, endorsements, stampings, intimation in accordance with local laws and/or notifications of the Security Documents and/or the Liens created thereunder.

 

Permitted Acquisition ”: as defined in clause (23) of the definition of “Permitted Investments.”

 

Permitted Amendment ”: an amendment to this Agreement and the other Loan Documents, effected in connection with a Loan Modification Offer pursuant to Section 2.28 , providing for an extension of the maturity date applicable to the Loans and/or Commitments of the Accepting Lenders and, in connection therewith, (a) a change to the Applicable Margin with respect to the Loans and/or Commitments of the Accepting Lenders, (b) a change to the fees payable to, or the inclusion of new fees to be payable to, the Accepting Lenders and/or (c) any other changes permitted by the terms of Section 2.28 .

 

Permitted Asset Swap ”: the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between UK Holdco or any of the Restricted Subsidiaries and another Person; provided that any cash or Cash Equivalents received must be applied in accordance with Section 7.5 .

 

Permitted Auction Purchaser ”: any Company Borrower, UK Holdco or Holdings.

 

Permitted Clean-Up Investment ”: any Investment referred to in clauses (3), (9), (22) and (23) of the definition of “Permitted Investments.”

 

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Permitted Credit Agreement Refinancing Debt ”: (a) Permitted First Priority Refinancing Debt, (b) Permitted Second Priority Refinancing Debt, (c) Permitted Unsecured Refinancing Debt or (d) Indebtedness incurred or Other Revolving Commitments obtained pursuant to a Refinancing Amendment, in each case, issued, incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace or Refinance, in whole or part, existing Term Loans, outstanding Revolving Loans or (in the case of Other Revolving Commitments obtained pursuant to a Refinancing Amendment) Revolving Commitments hereunder (including any successive Permitted Credit Agreement Refinancing Debt) (any such extended, renewed, replaced or Refinanced Term Loans, Revolving Loans or Revolving Commitments, “ Refinanced Credit Agreement Debt ”); provided that (i) such extending, renewing or refinancing Indebtedness (including, if such Indebtedness includes or relates to any Other Revolving Commitments, the unused portion of such Other Revolving Commitments) is in an original aggregate principal amount (or accreted value, if applicable) not greater than the aggregate principal amount (or accreted value, if applicable) of the Refinanced Credit Agreement Debt (and, in the case of Refinanced Credit Agreement Debt consisting, in whole or in part, of unused Revolving Commitments or Other Revolving Commitments, the amount thereof) plus an amount equal to unpaid and accrued interest and premium thereon plus other reasonable and customary fees and expenses (including upfront fees and original issue discount), (ii) in the case of Other Revolving Commitments and Other Revolving Loans, there shall be no required repayment thereof (other than in connection with a voluntary reduction of commitments or availability thereunder) prior to the maturity thereof, and (iii) such Refinanced Credit Agreement Debt shall be repaid, defeased or satisfied and discharged, and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, on the date such Permitted Credit Agreement Refinancing Debt is issued, incurred or obtained; provided that to the extent that such Refinanced Credit Agreement Debt consists, in whole or in part, of Revolving Commitments or Other Revolving Commitments (or Revolving Loans or Other Revolving Loans incurred pursuant to any Revolving Commitments or Other Credit Revolving Commitments), such Revolving Commitments or Other Revolving Commitments, as applicable, shall be terminated, and all accrued fees in connection therewith shall be paid, on the date such Permitted Credit Agreement Refinancing Debt is issued, incurred or obtained.

 

Permitted Cure Securities ”: any Qualified Equity Interest in Holdings.

 

Permitted First Priority Refinancing Debt ”: any secured Indebtedness incurred by any Borrower in the form of one or more series of senior secured notes or senior secured term loans (each, a “ First Priority Refinancing Term Facility ”) or one or more senior secured revolving credit facilities (each, a “ First Priority Refinancing Revolving Facility ”); provided that (i) such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations, (ii) such Indebtedness constitutes Permitted Credit Agreement Refinancing Debt in respect of Term Loans (including portions of Classes of Term Loans, Other Term Loans or Incremental Term Loans) or outstanding Revolving Loans and (iii) such Indebtedness complies with the Permitted Refinancing Requirements; provided that an Officer’s Certificate signed on behalf of the Borrower Representative delivered to the Administrative Agent at least five (5) Business Days (or such shorter period acceptable to the Administrative Agent) prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower Representative has determined in good faith that such terms and conditions satisfy the requirement of this definition shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent notifies the Borrower Representative within such five (5) Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees)). Permitted First Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Permitted Holders ”: (i) the Sponsors, (ii) the Management Investors, (iii) any Person that has no material assets other than the Capital Stock of UK Holdco and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings or any direct or indirect Parent Holding Company, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any Permitted Holder specified in clause (i) above, holds more than 50% of the total voting power of the Voting Stock thereof, (iv) any other beneficial owner in the equity in Holdings or any direct or indirect Parent Holding Company as of the Closing Date and (v) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any Permitted Holder specified in clauses (i) or (iv) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings or any direct or indirect Parent Holding Company or of a Permitted Holder specified in clause (iii) above (a “ Permitted Holder Group ”), so long as no Person or other “group” (other than a Permitted Holder specified in clauses (i) and (iii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group.

 

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Permitted Investments ”:

 

(1)         any Investment in UK Holdco or any Restricted Subsidiary;

 

(2)         any Investment in Cash Equivalents or Investment Grade Securities;

 

(3)         (x) any Investment by UK Holdco or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, UK Holdco or a Restricted Subsidiary and (y) any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

 

(4)         any Investment in securities or other assets, including earnouts, not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to Section 7.5 or any other disposition of assets not constituting an Asset Sale;

 

(5)         any Investment (x) existing on the Closing Date and set forth on Schedule 1.1E , (y) made pursuant to binding commitments in effect on the Closing Date and set forth on Schedule 1.1E and (z) that replaces, Refinances, refunds, renews or extends any Investment described under either of the immediately preceding clauses (x) or (y), provided that any such Investment is in an amount that does not exceed the amount replaced, Refinanced, refunded, renewed or extended except to the extent required by the terms of such Investment on the Closing Date;

 

(6)         loans and advances to, and guarantees of Indebtedness of, employees of UK Holdco (or any of its direct or indirect parent companies) or a Restricted Subsidiary not in excess of the greater of $20,000,000 and 0.50% of Total Assets (at the time such Investment is made) outstanding at any one time, in the aggregate;

 

(7)         any Investment acquired by UK Holdco or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by UK Holdco or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of UK Holdco of such other Investment or accounts receivable, (b) in good faith settlement of delinquent obligations of, and other disputes with Persons who are not Affiliates or (c) as a result of a foreclosure by UK Holdco or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(8)         Hedging Obligations permitted under Section 7.2(b)(xii) ;

 

(9)         additional Investments by UK Holdco or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) that are at the time outstanding, not to exceed the greater of $110,000,000 and 2.75% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value)) at any one time outstanding; provided , however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

 

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(10)        loans and advances to (or guarantees of Indebtedness of) future, present or former officers, directors, employees and consultants for business related travel expenses (including entertainment expense), moving and relocation expenses, Tax advances, payroll advances and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such Person’s purchase or other acquisition for value of Equity Interests of UK Holdco or any direct or indirect parent company thereof under compensation plans approved by the Board of Directors of UK Holdco (or any direct or indirect parent company thereof) in good faith;

 

(11)        Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under Section 7.3(a)(3) ;

 

(12)        any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 7.6 (except transactions described in clauses (b)(ii) , (b)(v) , (b)(ix)(B) , (b)(xxiii) and (b)(xxiv) therein);

 

(13)        Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(14)        guarantees issued in accordance with Section 7.2 and Section 6.9 ;

 

(15)        Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment (including without limitation prepayments to suppliers in the ordinary course of business) or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

 

(16)        any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided , however , that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest;

 

(17)        Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 7.5 ;

 

(18)        (x) Investments in joint ventures UK Holdco or any of its Restricted Subsidiaries existing on the Closing Date, (y) additional Investments in joint ventures in an aggregate amount not to exceed the greater of $110.0 million and 2.75% of Total Assets at any one time outstanding (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value) and (z) additional Investments in Similar Businesses in an aggregate amount not to exceed the greater of $100.0 million and 2.50% of Total Assets at any one time outstanding (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary;

 

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(19)        Investments of a Restricted Subsidiary acquired after the Closing Date or of an entity merged into or consolidated with a Restricted Subsidiary in a transaction that is not prohibited by Section 7.8 after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

(20)        advances, loans, rebates and extensions of credit (including the creation of receivables) to suppliers, customers and vendors, and performance guarantees, in each case in the ordinary course of business;

 

(21)        the acquisition of assets or Capital Stock solely in exchange for the issuance of common equity securities of Holdings (or any direct or indirect parent of Holdings);

 

(22)        Investments by Lux Company Borrower in UK Holdco evidenced by each Loan Note Instrument; and

 

(23)        acquisitions by UK Holdco or any Restricted Subsidiary of the majority of the Capital Stock of Persons or of assets constituting a division or business unit of, or all or substantially all of the assets of a Person (each a “ Permitted Acquisition ”); provided that (i) no Default or Event of Default has occurred or is continuing (or, in the case of any Limited Condition Acquisition, no Event of Default under Section 9.1(a) or 9.1(g) has occurred or is continuing) both before and after giving effect to such Permitted Acquisition, (ii) the line of business of the acquired entity shall be similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses conducted by UK Holdco and the Restricted Subsidiaries, (iii) any Person acquired shall become, and any Person acquiring assets shall be, a Restricted Subsidiary (unless designated as an Unrestricted Subsidiary) and (iv) UK Holdco or such Restricted Subsidiary, as applicable, shall take, and shall cause such Person to take, all actions required under Section 6.9 in connection therewith.

 

Permitted Liens ”: the collective reference to the Company Group Member Permitted Liens and the Tower Group Member Permitted Liens.

 

Permitted Priority Liens ”: with respect to Collateral other than Capital Stock, Permitted Liens.

 

Permitted Refinancing Requirements ”: with respect to any Indebtedness incurred by any Borrower to Refinance, in whole or part, any other Indebtedness (such other Indebtedness, “ Refinanced Debt ”):

 

(a)          with respect to all such Indebtedness:

 

(i)          the other terms and conditions of such Indebtedness (excluding pricing, fees, rate floors and optional prepayment or redemption terms) are not materially more restrictive on the Group Members than those applicable to the Refinanced Debt (except for (x) financial covenants or other covenants or provisions applicable only to periods after the Latest Maturity Date at the time of such Refinancing, as may be agreed by the Borrower Representative and the providers of such Indebtedness or (y) terms that are conformed (or added) to the Loan Documents for the benefit of the applicable Lender pursuant to an amendment between the Administrative Agent and the applicable Borrowers);

 

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(ii)         if such Indebtedness is guaranteed, it is not guaranteed by any Restricted Subsidiary other than the Subsidiary Guarantors; and

 

(iii)        the proceeds of such Indebtedness are applied, substantially concurrently with the incurrence thereof, to the prepayment (or satisfaction and discharge) of the outstanding amount (and, if such Indebtedness constitutes Refinancing Revolving Debt, reductions of the Revolving Commitments) of the Refinanced Debt in accordance with its terms;

 

(b)          if such Indebtedness constitutes Refinancing Revolving Debt, (i) such Indebtedness does not mature (or require commitment reductions or amortization) prior to the final stated maturity date of the Refinanced Debt and (ii) if such Indebtedness is provided or guaranteed by a Person (who is not a Loan Party) that is an Affiliate of UK Holdco, such Indebtedness includes provisions providing for the pro   rata treatment of payment, repayment, borrowings, participations and commitment reductions of the Revolving Facility and such Indebtedness;

 

(c)          if such Indebtedness constitutes Refinancing Term Debt (other than Customary Bridge Financing):

 

(i)          (x) in the case of Refinancing Term Debt incurred under any First Priority Refinancing Term Facility or any Second Priority Refinancing Term Facility, such Indebtedness (A) does not mature prior to the maturity date of the Refinanced Debt and (B) does not have a Weighted Average Life to Maturity shorter than the Weighted Average Life to Maturity of the Refinanced Debt and (y) in the case of Refinancing Term Debt incurred under an Unsecured Refinancing Term Facility, such Indebtedness does not mature or have scheduled amortization or payments of principal and is not subject to mandatory redemption or prepayment (except customary asset sale or change of control provisions), in each case prior to the date that is 91 days after the then Latest Maturity Date at the time such Indebtedness is incurred; and

 

(ii)         such Indebtedness shares not greater than ratably in (or, if such Indebtedness constitutes Unsecured Refinancing Term Debt or Second Priority Refinancing Term Debt, on a junior basis with respect to) any voluntary or mandatory prepayments of any Term Loans then outstanding; and

 

(d)          if such Indebtedness is secured:

 

(i)          such Indebtedness is not secured by any assets other than the Collateral (it being understood that such Indebtedness shall not be required to be secured by all of the Collateral); provided that Indebtedness that may be incurred by Non-Guarantor Subsidiaries pursuant to Section 7.2 may be secured by assets of Non-Guarantor Subsidiaries; and

 

(ii)         a Senior Representative acting on behalf of the providers of such Indebtedness shall have become party to an Intercreditor Agreement (or the Intercreditor Agreement shall have been amended or replaced in a manner reasonably acceptable to the Administrative Agent), which results in such Senior Representative having rights to share in the Collateral as provided in the definition of Permitted First Priority Refinancing Debt, in the case of a First Priority Refinancing Revolving Facility or a First Priority Refinancing Term Facility, or in the definition of Permitted Second Priority Refinancing Debt, in the case of a Second Priority Refinancing Revolving Facility or a Second Priority Refinancing Term Facility.

 

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Permitted Second Priority Refinancing Debt ”: any secured Indebtedness incurred by any Borrower in the form of one or more series of second lien secured notes or second lien secured term loans (each, a “ Second Priority Refinancing Term Facility ”) or one or more revolving credit facilities (each, a “ Second Priority Refinancing Revolving Facility ”); provided that (i) such Indebtedness is secured by the Collateral on a second lien, subordinated basis (with respect to liens only) to the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt, (ii) such Indebtedness constitutes Permitted Credit Agreement Refinancing Debt in respect of Term Loans (including portions of Classes of Term Loans, Other Term Loans or Incremental Term Loans) or outstanding Revolving Loans and (iii) such Indebtedness complies with the Permitted Refinancing Requirements; provided that an Officer’s Certificate signed on behalf of the Borrower Representative delivered to the Administrative Agent at least five Business Days (or such shorter period acceptable to the Administrative Agent) prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower Representative has determined in good faith that such terms and conditions satisfy the requirement of this definition shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent notifies the Borrower Representative within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees)). Permitted Second Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Permitted Tax Distributions ”: payments made pursuant to Section 7.3(b)(xii) .

 

Permitted Unsecured Refinancing Debt ”: any unsecured Indebtedness incurred by any Borrower in the form of one or more series of senior unsecured notes or term loans (each, an “ Unsecured Refinancing Term Facility ”) or one or more revolving credit facilities (each, an “ Unsecured Refinancing Revolving Facility ”); provided that (i) such Indebtedness constitutes Permitted Credit Agreement Refinancing Debt in respect of Term Loans (including portions of Classes of Term Loans, Other Term Loans or Incremental Term Loans) or outstanding Revolving Loans and (ii) such Indebtedness complies with the Permitted Refinancing Requirements; provided that an Officer’s Certificate signed on behalf of the Borrower Representative delivered to the Administrative Agent at least five Business Days (or such shorter period acceptable to the Administrative Agent) prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower Representative has determined in good faith that such terms and conditions satisfy the requirement of this definition shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent notifies the Borrower Representative within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees)). Permitted Unsecured Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Person ”: any natural person, corporation, limited partnership, exempted limited partnership, exempted company, general partnership, limited liability company, limited liability partnership, joint venture, association, joint stock company, trust, bank trust company, land trust, business trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity whether legal or not.

 

Plan ”: at a particular time, any employee benefit plan that is covered by Title IV of ERISA and in respect of which Holdings or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

Platform ”: as defined in Section 6.2(a) .

 

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Preferred Stock ”: any Equity Interest with preferential right of payment of dividends or redemptions upon liquidation, dissolution, or winding up.

 

Prime Rate ”: (a) the rate of interest determined by the Administrative Agent from time to time at its principal office in New York City as its “prime rate,” and notified to the Borrower Representative with the understanding that the “prime rate” is one of the Administrative Agent’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its determination in such internal publications as the Administrative Agent may designate or (b) if the Administrative Agent has no “prime rate,” the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as reasonably determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as reasonably determined by the Administrative Agent). The “prime rate” referred to in clause (a) is a rate set by the Administrative Agent based upon various factors including Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate. Any change in such prime rate announced by the Administrative Agent shall take effect at the opening of business on the day of such change.

 

Private Lender Information ”: any information and documentation that is not Public Lender Information.

 

Pro Forma Balance Sheet ”: as defined in Section 4.1(a) .

 

Pro Forma Basis ”: (i) if, during such Reference Period, UK Holdco or any Restricted Subsidiary shall have made any Disposition (or discontinued any operations) of at least a division of a business unit, the Consolidated EBITDA and Total Assets for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA and Total Assets (if positive) attributable to the property that is the subject of such Disposition or discontinuation for such Reference Period or increased by an amount equal to the Consolidated EBITDA and Total Assets (if negative) attributable thereto for such Reference Period (for the avoidance of doubt, including (without duplication) pro forma adjustments, if any, to the extent set forth in the definition of Consolidated EBITDA);

 

(ii)         if, during such Reference Period, UK Holdco or any Restricted Subsidiary shall have made an Investment or acquisition of assets, in each case constituting at least a division of a business unit of, or all or substantially all of the assets of, any Person (whether by way of merger, asset acquisition, acquisition of Capital Stock or otherwise), Consolidated EBITDA and Total Assets for such Reference Period shall be calculated after giving pro forma effect thereto as if such Investment or acquisition occurred on the first day of such Reference Period (for the avoidance of doubt, including (without duplication) pro forma adjustments, if any, to the extent set forth in the definition of Consolidated EBITDA);

 

(iii)        if, during such Reference Period, the Borrower Representative shall have designated any Restricted Subsidiary as an Unrestricted Subsidiary, or designated any Unrestricted Subsidiary as a Restricted Subsidiary, Consolidated EBITDA, Total Assets and the Fixed Charge Coverage Ratio for such Reference Period shall be calculated after giving pro forma effect thereto as if such designation occurred on the first day of such Reference Period;

 

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(iv)        if, during such Reference Period, UK Holdco or any Restricted Subsidiary shall have Incurred or shall have repaid, retired or extinguished any Indebtedness (other than Indebtedness under any revolving credit facility unless such Indebtedness has been permanently repaid, retired or extinguished (and the commitments thereunder terminated) and not replaced), or issued or redeemed any Disqualified Stock or Preferred Stock, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, retirement, extinguishment, issuance or redemption, as if the same had occurred on the first day of the applicable Reference Period; and

 

(v)         if, following the last day of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b), as the case may be, have been or were required to have been delivered and prior to the end of the Reference Period, UK Holdco or any Restricted Subsidiary shall have Incurred or shall have repaid, retired or extinguished any Indebtedness (other than Indebtedness under any revolving credit facility unless such Indebtedness has been permanently repaid, retired or extinguished (and the commitments thereunder terminated) and not replaced), or issued or redeemed any Disqualified Stock or Preferred Stock, then the Total First Lien Net Leverage Ratio and Total Net Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, retirement, extinguishment, issuance or redemption, as if the same had occurred on such last day of such most recently completed period of four consecutive fiscal quarters.

 

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative to the extent identifiable and supportable. Any such pro forma calculation shall include, without duplication, adjustments appropriate to reflect cost savings, operating expense reductions, restructuring charges and expenses and synergies reasonably expected to result from the applicable event to the extent set forth in the definition of “Consolidated EBITDA”.

 

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness).

 

Interest on (x) a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP and (y) any Indebtedness under a revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower Representative may designate.

 

The term “Disposition” in this definition shall not include dispositions of inventory and other ordinary course dispositions of property.

 

Projections ”: as defined in Section 6.2(d) .

 

Properties ”: as defined in Section 4.13(a) .

 

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Pro Rata Share ”: with respect to (i) any Revolving Facility, and each Revolving Lender’s share of such Revolving Facility, at any time a fraction (expressed as a percentage), the numerator of which is the amount of the Revolving Commitments of such Revolving Lender under such Revolving Facility at such time and the denominator of which is the amount of the aggregate Revolving Commitments under such Revolving Facility at such time; provided that if such Revolving Commitments have been terminated, then the Pro Rata Share of each Revolving Lender shall be determined based on the Pro Rata Share of such Revolving Lender under such Revolving Facility immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof, (ii) any Term Facility, and each Term Lender and such Term Lender’s share of all Term Commitments or Term Loans under such Term Facility, at any time a fraction (expressed as a percentage), the numerator of which is the amount of the Term Commitments of such Term Lender under such Term Facility at such time and the denominator of which is the amount of the aggregate Term Commitments under such Term Facility at such time; provided that if any Term Loans are outstanding under such Term Facility, then the Pro Rata Share of each Term Lender shall be a fraction (expressed as a percentage), the numerator of which is the amount of the Term Loans of such Term Lender under such Term Facility at such time and the denominator of which is the amount of the aggregate Term Loans at such time; provided , further , that if all Term Loans under such Term Facility have been repaid, then the Pro Rata Share of each Term Lender under such Term Facility shall be determined based on the Pro Rata Share of such Term Lender under such Term Facility immediately prior to such repayment, and (iii) with respect to each Lender and all Loans and Outstanding Amounts at any time a fraction (expressed as a percentage), the numerator of which is the Outstanding Amount with respect to Loans and Commitments of such Lender at such time ( plus such Lender’s obligation to purchase participations in undrawn Letters of Credit) and the denominator of which is the Outstanding Amount (in aggregate) plus the amount of all Lenders’ obligations to purchase participations in undrawn Letters of Credit at such time; provided that if all Outstanding Amounts have been repaid or terminated, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

 

Public Lender ”: as defined in Section 6.2(a) .

 

Public Lender Information ”: information and documentation that is either exclusively (i) of a type that would be publicly available if Holdings and its respective Subsidiaries were public reporting companies or (ii) not material or inside information with respect to Holdings and its respective Subsidiaries or any of their respective securities for purposes of foreign, United States Federal and state securities laws.

 

Public Market ”: at any time after (a) a Public Offering has been consummated and (b) at least 15.0% of the total issued and outstanding common equity of Holdings or Holdings’ direct or indirect parent has been distributed by means of an effective registration statement under the Securities Act (or pursuant to a prospectus or similar documents filed with securities regulatory authorities outside of the United States) or sale pursuant to Rule 144 under the Securities Act (or pursuant to similar rules in any jurisdiction outside of the United States).

 

Public Offering ”: (a) an initial underwritten public offering of common Capital Stock of Holdings or Holdings’ direct or indirect parent pursuant to an effective registration statement (other than a registration statement on Form S-8 (or equivalent forms applicable to foreign public companies or foreign private issuers in the United States) or any successor form) filed with the SEC in accordance with the Securities Act or pursuant to a prospectus or similar documents filed with securities regulatory authorities outside of the United States or (b) the admission of or grant of permission to deal in any part of the issued Capital Stock of Holdings or Holdings’ direct or indirect parent on any “recognised investment exchange” (as that term is used in the Financial Services and Markets Act 2000 of the United Kingdom) or any other public exchange or public market or on any exchange or market replacing the same in any country or any other sale or issue by way of initial public offering.

 

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Purchase ”: as defined in the definition of “Dutch Auction.”

 

Purchase Money Note ”: a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from UK Holdco or any of its Subsidiaries to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity.

 

Purchase Notice ”: as defined in the definition of “Dutch Auction.”

 

Purchaser ”: as defined in the definition of “Dutch Auction.”

 

Qualified Counterparty ”: any Person that, as of the Closing Date or within 30 days of the Closing Date or as of the date it enters into any Specified Swap Agreement, is (i) if such Specified Swap Agreement is an Existing Swap Agreement, any counterparty thereto, (ii) the Administrative Agent, a Joint Lead Arranger, a Lender or an Affiliate of the foregoing, in its capacity as a counterparty to such Specified Swap Agreement or (iii) any other Person; provided that the maximum amount of Hedging Obligations under Specified Swap Agreements pursuant to this clause (iii) shall be no greater than the greater of $20,000,000 and 0.50% of Total Assets; provided further that, for the purposes of the foregoing clause (iii), (x) the amount of any Hedging Obligation arising out of any master agreement included in, or incorporated by reference into, the documentation governing any individual or combination of Swap Agreements (each, a “ Master Agreement ”) shall be calculated only after giving effect to any and all applicable legally enforceable netting provisions set forth in such Master Agreement, but for the avoidance of doubt without giving effect to any setoff, offset or similar right or provision by which any amount owed by any Loan Party under any Master Agreement may be reduced in whole or in part by the amount of any obligation owed to any Loan Party under any other agreement, and (y) if the net amount owed by any Loan Party as calculated pursuant to the foregoing clause (x) would otherwise be negative, such amount shall be deemed to be zero

 

Qualified ECP Guarantor ”: in respect of any Swap Obligation, any Loan Party that has total assets exceeding $10,000,000 (or total assets exceeding such other amount so that such Loan Party is an “eligible contract participant” as defined in the Commodity Exchange Act) at the time such Swap Obligation is incurred.

 

Qualified Equity Interests ”: any Capital Stock that is not a Disqualified Stock.

 

Qualified Public Offering ”: a Public Offering that results in a Public Market.

 

Qualified Receivables Financing ”: any Receivables Financing of a Receivables Subsidiary that meets the following conditions: (1) the Board of Directors of the Borrower Representative shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Borrower Representative and the Receivables Subsidiary, (2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by the Borrower Representative), and (3) the financing terms, covenants, termination events and other provisions thereof shall be market terms at the time the receivables financing is first introduced (as determined in good faith by the Borrower Representative and it being understood that such terms, covenants, termination events and other provisions may subsequently be modified so long as such modifications are on market terms at the time of any such modification) and may include Standard Securitization Undertakings. The grant of a security interest in any accounts receivable of UK Holdco or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure any Indebtedness shall not be deemed a Qualified Receivables Financing.

 

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Qualified Reporting Subsidiary ” as defined in Section 6.1 .

 

Ratio Debt ”: as defined in Section 7.2(a) .

 

Realizable Assets ”: as defined in Section 8.12(d) .

 

Receivables Fees ”: distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

 

Receivables Financing ”: any transaction or series of transactions that may be entered into by UK Holdco or any Subsidiary of UK Holdco pursuant to which UK Holdco or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by UK Holdco or any of its Subsidiaries), and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of UK Holdco or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by UK Holdco or any such Subsidiary in connection with such accounts receivable.

 

Receivables Repurchase Obligation ”: any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

 

Receivables Subsidiary ”: a Wholly Owned Restricted Subsidiary of UK Holdco (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with UK Holdco in which UK Holdco or any Subsidiary of UK Holdco makes an Investment and to which UK Holdco or any Subsidiary of UK Holdco transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of UK Holdco and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Borrower Representative as a Receivables Subsidiary and:

 

(a)          no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by UK Holdco or any other Subsidiary of UK Holdco (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates UK Holdco or any other Subsidiary of UK Holdco in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of UK Holdco or any other Subsidiary of UK Holdco, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings,

 

(b)          with which neither UK Holdco nor any other Subsidiary of UK Holdco has any material contract, agreement, arrangement or understanding other than on terms which UK Holdco reasonably believe to be no less favorable to UK Holdco or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of UK Holdco, and

 

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(c)          to which neither UK Holdco nor any other Subsidiary of UK Holdco has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

Any such designation by the Board of Directors of the Borrower Representative shall be evidenced to the Administrative Agent by delivering to the Administrative Agent a certified copy of the resolutions of the Board of Directors of the Borrower Representative giving effect to such designation and an Officer’s Certificate signed on behalf of the Borrower Representative certifying that such designation complied with the foregoing conditions.

 

Receiver ”: any receiver and manager or administrative receiver (or an equivalent officer in any jurisdiction) of the whole or any part of the Collateral.

 

Recovery Event ”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation, eminent domain or similar proceeding relating to any asset of any Group Member.

 

Reference Period ”: the period beginning on the first day of the fiscal quarter of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered and ending on the Calculation Date.

 

Refinance ”: in respect of any Indebtedness, to refinance, discharge, redeem, replace, defease, refund, extend, renew or repay any Indebtedness with the proceeds of other Indebtedness, or to issue other Indebtedness, in exchange or replacement for, such Indebtedness in whole or in part; “ Refinanced ” and “ Refinancing ” shall have correlative meanings.

 

Refinanced Credit Agreement Debt ”: as defined in the definition of “Permitted Credit Agreement Refinancing Debt.”

 

Refinanced Debt ”: as defined in the definition of “Permitted Refinancing Requirements.”

 

Refinancing Amendment ”: an amendment to this Agreement executed by each of (a) the Borrower Representative and any applicable Borrower, (b) the Refinancing Arranger and (c) each Additional Lender and Lender that agrees to provide any portion of the Permitted Credit Agreement Refinancing Debt being incurred pursuant thereto, in accordance with Section 2.26 .

 

Refinancing Arranger ”: any Person (who may be the Administrative Agent, if it so agrees) that is not an Affiliate of any Borrower appointed by the Borrower Representative, after consultation with the Administrative Agent, the arranger of any Permitted Credit Agreement Refinancing Debt.

 

Refinancing Revolving Debt ”: any First Priority Refinancing Revolving Facility, Second Priority Refinancing Revolving Facility or Unsecured Refinancing Revolving Facility.

 

Refinancing Term Debt ”: Indebtedness under any First Priority Refinancing Term Facility, Second Priority Refinancing Term Facility or Unsecured Refinancing Term Facility.

 

Refunded Swingline Loans ”: as defined in Section 2.7(b) .

 

Refunding Capital Stock ”: as defined in Section 7.3(b)(ii) .

 

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Register ”: as defined in Section 11.6(b)(vi) .

 

Registered Equivalent Notes ”: with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933 (or pursuant to similar rules in any jurisdiction outside of the United States), substantially identical notes (having the same Guarantees) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC (or any securities regulator outside of the United States).

 

Reimbursement Obligation ”: the obligation of the Revolving Borrowers or the Borrower Representative (on behalf of any Revolving Borrower) to reimburse the Issuing Lenders pursuant to Section 3.5 for amounts drawn under Letters of Credit.

 

Reinvestment Deferred Amount ”: with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Loan Party in connection therewith that are not applied to repay the Term Loans or reduce the Revolving Commitments pursuant to Section 2.11(c) .

 

Reinvestment Event ”: as defined in Section 2.11(c) .

 

Reinvestment Prepayment Amount ”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire, replace, reconstruct or repair assets useful in the business of UK Holdco and the Restricted Subsidiaries or in connection with a Permitted Acquisition.

 

Reinvestment Prepayment Date ”: with respect to any Reinvestment Event, the earlier of (a) the date occurring one year after such Reinvestment Event (or, if later, 180 days after the date UK Holdco or a Restricted Subsidiary has entered into a binding commitment to reinvest the Net Cash Proceeds of such Reinvestment Event prior to the expiration of such one year period) and (b) the date on which the Borrower Representative shall have notified the Administrative Agent in writing that it has determined not to acquire, replace, reconstruct or repair assets useful in the business of UK Holdco and the Restricted Subsidiaries or in connection with a Permitted Acquisition.

 

Related Business Assets ”: assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by UK Holdco or a Restricted Subsidiary in exchange for assets transferred by UK Holdco or a Restricted Subsidiary will not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

 

Related Parties ”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

Relevant Jurisdiction ”: in relation to a Loan Party:

 

(a)          the jurisdiction under whose laws that Loan Party is incorporated or organized as at the date of this Agreement or as at the date on which that Loan Party becomes party to this Agreement (as the case may be);

 

(b)          any jurisdiction where it conducts its business; and

 

(c)          any jurisdiction where any asset subject to or intended to be subject to the Liens to be created by it is situated.

 

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Reorganization ”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

Reply Amount ”: as defined in the definition of “Dutch Auction.”

 

Reportable Event ”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

 

Repricing Indebtedness ”: as defined in the definition of “Repricing Transaction.”

 

Repricing Premium ”: as defined in Section 2.10(b) .

 

Repricing Transaction ”: other than in the context of a transaction involving a Change of Control, a Qualified Public Offering or the financing of any Significant Acquisition, (i) the repayment, prepayment, refinancing, substitution or replacement of all or a portion of the Term Facility with the incurrence of any Indebtedness (“ Repricing Indebtedness ”) having an effective interest cost or weighted average yield (taking into account interest rate margin and benchmark floors, recurring fees and all upfront or similar fees or original issue discount (amortized over the shorter of (A) the weighted average life to maturity of such term loans and (B) four years), but excluding any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared ratably with all lenders or holders of such term loans in their capacities as lenders or holders of such term loans) that is less than the effective interest cost or weighted average yield of the Term Facility and (ii) any amendment, waiver, consent or modification to this Agreement relating to the interest rate for, or weighted average yield (to be determined on the same basis as that described in clause (i) above) of, the Term Facility directed at, or the result of which would be, the lowering of the effective interest cost or weighted average yield applicable to the Term Facility.

 

Required Lenders ”: at any time, non-Defaulting Lenders holding more than 50% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the sum of (i) the aggregate Outstanding Amount of all Term Loans at such time, (ii) the Total Incremental Term Commitments then in effect and (iii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit at such time.

 

Requirement of Law ”: as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

Responsible Officer ”: the chief executive officer, representative, director, manager, president, vice president, executive vice president, chief financial officer, treasurer or assistant treasurer, secretary or assistant secretary, an authorized signatory, an attorney-in-fact (to the extent empowered by the board of directors/managers of Holdings, UK Holdco or the Borrower Representative), or other similar officer of a Loan Party (or of its general partner, managing member or sole member, if applicable) of the applicable Loan Party, but in any event, with respect to financial matters, the chief financial officer, treasurer, controller or comptroller (or other officer or director with equivalent duties), and solely for purposes of notices given pursuant to Section 2 , any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent.

 

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Restricted ”: when referring to cash or Cash Equivalents of UK Holdco and the Restricted Subsidiaries, means that such cash or Cash Equivalents (i) unless addressed in clause (ii) below, appear (or would be required to appear) as “restricted” on the consolidated balance sheet of UK Holdco, (ii) are subject to any Lien in favor of any Person other than (x) the Administrative Agent for the benefit of the Secured Parties and (y) other Liens permitted under clauses (3), (10), (13), (15), (22), (24), (25), (30), (33), (35), (38) and (40) of the definition of “Company Group Member Permitted Liens” above, other than consensual Liens on assets which constitute Collateral and rank prior to the Liens in favor of the Administrative Agent (on behalf of the Secured Parties) on the Collateral or (iii) are not otherwise generally available for use by such Person; provided that, in addition to the foregoing, for any date of determination, an amount equal to the aggregate amount, as of such date of determination, of any cash or Cash Equivalents on the consolidated balance sheet of UK Holdco in respect of the reserves described in clause (b)(xviii) of the definition of Excess Cash Flow shall be deemed to be “Restricted” for all purposes under this Agreement.

 

Restricted Investment ”: an Investment other than a Permitted Investment.

 

Restricted Payments ”: as defined in Section 7.3(a)(iv) .

 

Restricted Subsidiary ”: any Subsidiary of UK Holdco other than any Unrestricted Subsidiary; provided , however , that upon an Unrestricted Subsidiary’s ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary”.

 

Retained Declined Proceeds ”: as defined in Section 2.11(f) .

 

Retired Capital Stock ”: as defined in Section 7.3(b)(ii) .

 

Return Bid ”: as defined in the definition of “Dutch Auction.”

 

Revolver Co-Borrowers ”: Restricted Subsidiaries of UK Holdco from time to time designated by the Borrower Representative to the Administrative Agent as “borrowers” with respect to the Revolving Borrowings in accordance with Section 12 , and “ Revolver Co-Borrower ” means any one of them.

 

Revolving Borrower ”: as defined in the recitals hereto.

 

Revolving Borrowing ”: a borrowing consisting of simultaneous Revolving Loans of the same Type and, in the case of Eurocurrency Loans, having the same Interest Period made by each of the Revolving Lenders.

 

Revolving Commitment ”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite such Lender’s name on Schedule 1.1A-1 or in the Assignment and Assumption, Refinancing Amendment or Incremental Amendment pursuant to which such Lender became a party hereto, as applicable, as the same may be changed from time to time pursuant to the terms hereof. The original amount of the Total Revolving Commitments is the Dollar Amount of $175,000,000.

 

Revolving Commitment Increase ”: as defined in Section 2.25(a) .

 

Revolving Commitment Increase Lender ”: as defined in Section 2.25(d) .

 

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Revolving Commitment Period ”: the period from and including the Closing Date to but excluding the Revolving Termination Date.

 

Revolving Excess ”: as defined in Section 2.11(e) .

 

Revolving Extensions of Credit ”: as to any Revolving Lender at any time to an amount equal to the sum of (a) the aggregate Outstanding Amount of all Revolving Loans held by such Lender at such time, (b) such Lender’s Revolving Percentage of the aggregate Outstanding Amount of all L/C Obligations at such time and (c) such Lender’s Revolving Percentage of the aggregate Outstanding Amount of all Swingline Loans at such time.

 

Revolving Facility ”: any Class of Revolving Commitments and the extensions of credit made thereunder, as the context may require.

 

Revolving Lender ”: each Lender that has a Revolving Commitment or that holds Revolving Loans.

 

Revolving Loan Note ”: a promissory note substantially in the form of Exhibit F-1 .

 

Revolving Loans ”: as defined in Section 2.4(a) .

 

Revolving Percentage ”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate Outstanding Amount of such Lender’s Revolving Loans at such time constitutes of the aggregate Outstanding Amount all Revolving Loans at such time; provided that in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Total Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving Lenders on a comparable basis.

 

Revolving Termination Date ”: the fifth anniversary of the Closing Date.

 

S&P ”: Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor to the rating agency business thereof.

 

Sale Leaseback Transaction ”: any arrangement with any Person or Persons, whereby in contemporaneous or substantially contemporaneous transactions UK Holdco or any Restricted Subsidiary sells substantially all of its right, title and interest in any property and, in connection therewith, UK Holdco or a Restricted Subsidiary acquires, leases or licenses back the right to use all or a material portion of such property.

 

Sanctioned Person ”: (a) any Person listed in any Sanctions Laws-related list of designated persons maintained by OFAC (including the designation as a “specially designated national” or “blocked person”), the U.S. Department of State, the United Nations Security Council, the European Union, the United Kingdom or any EU member state, and (b) any Person owned by any such Person or Persons.

 

Sanctions Laws ”: the laws and regulations administered or enforced by the U.S. Government (including OFAC or the U.S. Department of State), the United Nations Security Council, Canada, the European Union, the United Kingdom and any other relevant sanctions authority.

 

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SEC ”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

 

Second Priority Refinancing Revolving Facility ”: as defined in the definition of “Permitted Second Priority Refinancing Debt.”

 

Second Priority Refinancing Term Facility ”: as defined in the definition of “Permitted Second Priority Refinancing Debt.”

 

Section 385 ”: Section 385 of the Code.

 

Secured Parties ”: the collective reference to the Administrative Agent, the Lenders (including each Issuing Lender in its capacity as such), any Qualified Counterparties, any Receiver and any Cash Management Providers.

 

Securities Act ”: the Securities Act of 1933, as amended from time to time, and any successor statute.

 

Security Agreements ”: collectively, the US Security Agreement, the US Pledge Agreement and each other security agreement and security agreement supplement executed and delivered pursuant to Section 5.1(a) , Section 6.9 , Section 6.11 , Section 6.15 or Schedule 1.1D-1 (as such schedule may be amended or supplemented from time to time in accordance with the Agreed Security Principles), in each case as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with its terms.

 

Security Documents ”: the collective reference to each Security Agreement, the Onex GP Foreign Pledge Agreement, the Onex LP Foreign Pledge Agreement, the Onex GP US Pledge Agreement, the Onex LP US Pledge Agreement, each Intellectual Property Security Agreement, those certain foreign security and pledge agreements listed on Schedule 1.1D-1 (as such schedule may be amended or supplemented from time to time in accordance with the Agreed Security Principles), collateral assignments, security agreement supplements, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent pursuant to Section 5.1(a) , Section 6.9 , Section 6.11 or Section 6.15 , and each of the other agreements, instruments or documents that creates or purports to create a Lien which in each case, to the extent legally possible, (i) is created in favor of the Administrative Agent for the benefit of the Secured Parties or as trustee of the Secured Parties and/or as creditor under a parallel debt structure for the other Secured Parties; or (ii) in the case of any jurisdiction in which effective Liens cannot be granted in favor of the Administrative Agent for the benefit of the Secured Parties or as trustee of the Secured Parties is created in favor of (A) all Secured Parties and/or (B) the Administrative Agent under a parallel debt structure for the benefit of the Secured Parties, in each case, whether entered into on or after the Closing Date.

 

Senior Notes ”: the $500,000,000 7.875% senior notes of the Lux Company Borrower due 2024 issued pursuant to the Senior Notes Indenture.

 

Senior Notes Indenture ”: that certain Indenture, dated as of the Closing Date, between the Lux Company Borrower, as issuer, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee, as amended, modified or supplemented from time to time in accordance with the terms thereof and of this Agreement.

 

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Senior Representative ”: with respect to any series of Permitted First Priority Refinancing Debt or Permitted Second Priority Refinancing Debt or any series of Indebtedness permitted under Section 7.2(b)(vi) , the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.

 

Significant Acquisition ”: an acquisition the result of which is that Consolidated EBITDA, determined on a Pro Forma Basis after giving effect thereto, is equal to or greater than 125.0% of Consolidated EBITDA immediately prior to the consummation of such Permitted Acquisition, in each case with respect to UK Holdco and the Restricted Subsidiaries based on the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered.

 

Significant Subsidiary ”: at any date of determination, each Restricted Subsidiary that would be a “Significant Subsidiary” within the meaning of Rule 1-02 under the Securities Act as such rule is in effect on the Closing Date.

 

Similar Business ”: any business, service or other activity engaged in by UK Holdco, any of the Restricted Subsidiaries, or any direct or indirect parent on the Closing Date and any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which UK Holdco and the Restricted Subsidiaries are engaged on the Closing Date.

 

Single Employer Plan ”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.

 

Solvency Certificate ”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit I .

 

Solvent ”: with respect to any Person and its Subsidiaries on a consolidated basis, means that as of any date of determination, (a) the sum of the fair value of the assets of such Person will, as of such date, exceed the sum of all debts of such Person as of such date, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the probable liability on existing debts of such Person as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct any business in which it is or is about to become engaged, (d) such Person does not intend to incur, or believe or reasonably should believe that it will incur, debts beyond its ability to pay as they mature and (e) in respect of a Luxembourg Loan Party, such Person is not unable to pay its debts (in particular, it is not in a state of cessation of payments ( cessation de paiements ) and has not lost its commercial creditworthiness) and would not become unable to do so. For purposes of this definition, (i) “debt” means liability on a “claim” and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, subordinated, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured. For purposes of this definition, the amount of any contingent, unliquidated and disputed claim and any claim that has not been reduced to judgment at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability irrespective of whether such liabilities meet the criteria for accrual under the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 5.

 

Spain ”: the Kingdom of Spain.

 

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Spanish Borrower ”: a Borrower resident for tax purposes in Spain.

 

Spanish Guarantor ”: a Guarantor resident for tax purposes in Spain.

 

Spanish Loan Party ”: any Loan Party whose registered office/place of central administration is in Spain and whose centre of main interest (as that term is used in Article 3(1) of the Council Regulation (EC) n° 1346/2000 of 29 May 2000 on insolvency proceedings) is in Spain.

 

Spanish Qualifying Lender ”: in respect of a Spanish Borrower, a Lender which is beneficially entitled to interest payable to that Lender in respect of any amounts hereunder and which is (a) a financial institution ( entidad de crédito o establecimiento financiero de crédito ) resident for tax purposes in Spain as identified in paragraph (c) of article 61 of Spanish Royal Decree 634/2015, of 10 July ( Real Decreto 634/2015, de 10 de julio ), as amended or restated; (b) a Spanish tax resident securitisation fund as identified in paragraph (k) of article 61 of Spanish Royal Decree 634/2015, of 11 July ( Real Decreto 634/2015, de 10 de julio ), as amended or restated; (c) a permanent establishment in Spain of a non-Spanish financial institution, as identified in the second paragraph of article 8.1 of Spanish Royal Decree 1776/2004, of 30 July ( Real Decreto 1776/2004, de 30 de julio ), as amended or restated; (d) an EU Lender; or (e) a Spanish Treaty Lender.

 

Spanish Tax Deduction ”: a deduction or withholding for, or on account of, Tax imposed by Spain from an interest payment under a Loan Document.

 

Spanish Treaty Lender ”: in respect of a Spanish Borrower, a Lender which (a) is treated as a resident of a Spanish Treaty State for the purposes of such Spanish Treaty; (b) does not carry on a business in Spain through a permanent establishment with which that Lender’s participation in the Loan is effectively connected; and (c) fulfils any other procedural conditions which must be fulfilled under the Spanish Treaty by residents of that Spanish Treaty State for such residents to obtain full exemption from taxation on interest imposed by Spain, subject to the completion of procedural formalities.

 

Spanish Treaty State ”: a jurisdiction having a double taxation agreement (including, but not limited to, any protocol, exchange of letters, memorandum of understanding, mutual agreement or any other agreement executed between the Governmental Authority of such jurisdiction and Spain in connection with or under the provisions of such double taxation agreement) with Spain (a “ Spanish Treaty ”) which makes provision for full exemption from tax imposed by Spain on interest.

 

Specified Cash Management Agreement ”: any Cash Management Agreement entered into by any Group Member, on the one hand, and any Cash Management Provider, on the other hand.

 

Specified Class ”: as defined in Section 2.28(a) .

 

Specified Representations ”: the representations and warranties set forth in Sections 4.3(a) , 4.4(a) (solely as it relates to the Loan Documents), 4.4(c) , 4.5(i) (but only with respect to the Organizational Documents), 4.10 , 4.12 , 4.15 (subject to the last paragraph of Section 5.1 ), 4.16 , 4.17 and 4.18 (in each case, only with respect to Holdings, UK Holdco, the Tower Borrowers and the Company Borrowers).

 

Specified Swap Agreement ”: any (i) Existing Swap Agreement and (ii) Swap Agreement entered into by any Group Member, on the one hand, and any Qualified Counterparty, on the other hand (including any Swap Agreement entered into prior to the Closing Date between any Group Member and any Person that is a Qualified Counterparty on the Closing Date or becomes a Qualified Counterparty within 30 days of the Closing Date).

 

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Sponsors ”: (i) Onex Corporation, Onex Partners IV LP, Onex Partners Manager LP and/or one or more other investment funds advised, managed or controlled by Onex Corporation, and (ii) Baring Private Equity Asia GP VI, L.P. and the investment fund managed and controlled by it, and, in each case (whether individually or as a group), their Affiliates and any investment funds that have granted to the foregoing control in respect of their investment in UK Holdco and/or any of the Restricted Subsidiaries of UK Holdco, but, in any event, excluding any of their respective portfolio companies.

 

Standard Securitization Undertakings ”: representations, warranties, covenants, indemnities and guarantees of performance entered into by UK Holdco or any Subsidiary of UK Holdco which the Borrower Representative has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

 

Stated Maturity Date ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

 

Sterling ”, “ GBP ” and “ £ ”: the lawful currency of the United Kingdom.

 

Subordinated Indebtedness ”: (a) with respect to any Borrower, any Indebtedness of any Borrower which is by its terms contractually subordinated in right of payment to the Loans or the Senior Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms contractually subordinated in right of payment to its Guarantee.

 

Subsidiary ”: with respect to any Person (1) any corporation, partnership, limited liability company, unlimited liability company, association, joint venture or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity and (3) any Person that is consolidated in the consolidated financial statements of the specified Person in accordance with GAAP. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Holdings; provided , however , that, other than with respect to the calculation of any financial metric (including, but not limited to, the Financial Definitions), no Day 2 Subsidiary shall constitute a Subsidiary until such Day 2 Subsidiary is acquired.

 

Subsidiary Guarantor ”: the collective reference to the Company Subsidiary Guarantors and the Tower Subsidiary Guarantors (in each case, except to the extent released in accordance with this Agreement) that are parties to the Loan Documents as guarantors of the Obligations.

 

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Swap Agreement ”: any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of UK Holdco or any of its Subsidiaries shall be a Swap Agreement.

 

Swap Obligation ”: as defined in the definition of “Excluded Swap Obligation.”

 

Swingline Borrowing ”: a borrowing consisting of simultaneous Swingline Loans of the same Type.

 

Swingline Commitment ”: the obligation of the Swingline Lender to make Swingline Loans in Dollars pursuant to Section 2.6 in an aggregate principal amount at any one time outstanding not to exceed $25,000,000.

 

Swingline Lender ”: Any Lender under the Revolving Facility approved by the Borrower Representative and the Administrative Agent that agrees in writing to act in such capacity.

 

Swingline Loan Note ”: a promissory note substantially in the form of Exhibit F-2 .

 

Swingline Loans ”: as defined in Section 2.6 .

 

Swingline Participation Amount ”: as defined in Section 2.7(c) .

 

Swiss Francs ” or “ CHF ”: the lawful currency of Switzerland.

 

TARGET Day ”: any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euros.

 

Taxes ”: as defined in Section 2.19(a) .

 

Term Borrowing ”: a borrowing consisting of simultaneous Term Loans of the same Type.

 

Term Commitment ”: as to any Lender, (i) the obligation of such Lender, if any, to make a Term Loan to the Tower Borrowers in a principal amount not to exceed the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1A-1 , (ii) the Incremental Term Commitments, if any, issued after the Closing Date pursuant to Section 2.25 or (iii) Other Term Commitments, if any, issued after the Closing Date pursuant to a Refinancing Amendment entered into pursuant to Section 2.26 . The original aggregate principal amount of the Term Commitments is $1,550,000,000.

 

Term Facility ”: any Class of Term Loans, as the context may require.

 

Term Lenders ”: each Lender that has a Term Commitment or that holds a Term Loan.

 

Term Loan ”: an Initial Term Loan, an Other Term Loan or an Incremental Term Loan, as the context requires.

 

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Term Loan Maturity Date ”: the seventh anniversary of the Closing Date.

 

Term Loan Note ”: a promissory note substantially in the form of Exhibit F-3 , as it may be amended, supplemented or otherwise modified from time to time.

 

Term Loan Purchase Amount ”: as defined in the definition of “Dutch Auction.”

 

Term Percentage ”: as to any Term Lender at any time, the percentage which such Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or, at any time after the Closing Date, the percentage which the aggregate Outstanding Amount of such Lender’s Term Loans at such time constitutes of the aggregate Outstanding Amount of all Term Loans at such time).

 

Top Borrowers ”: collectively, the Company Borrowers and the Tower Borrowers.

 

Total Assets ”: the total consolidated assets of UK Holdco and the Restricted Subsidiaries, as shown on the most recent consolidated or combined, as applicable, balance sheet of UK Holdco and the Restricted Subsidiaries (giving effect to any acquisitions or dispositions of assets or properties that have been made by UK Holdco or any of the Restricted Subsidiaries subsequent to the date of such balance sheet, including through mergers or consolidations).

 

Total Capitalization ”: as defined in the definition of “Equity Contribution.”

 

Total First Lien Net Leverage Ratio ”: as at the last day of any period, the ratio of (a) the excess of (i) Consolidated Total Indebtedness on such day consisting of Indebtedness (x) constituting the Obligations, (y) that is secured by the Collateral on a pari passu basis with the Obligations or (z) that was incurred pursuant to Section 7.2(b)(vii) over (ii) an amount equal to the sum of (x) the Unrestricted cash and Cash Equivalents and (y) cash and Cash Equivalents restricted in favor of the Administrative Agent (which may also include cash and Cash Equivalents securing other Indebtedness secured on a pari passu basis with the Obligations, so long as the holders of such other Indebtedness do not have the benefit of a control agreement or other equivalent methods of perfection (unless the Administrative Agent also has the benefit of a control agreement or other equivalent methods of perfection), in each case of UK Holdco and its Restricted Subsidiaries on such date, to (b) Consolidated EBITDA, calculated on a Pro Forma Basis for such period, and with such pro forma or scheduling adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio”.

 

Total Net Leverage Ratio ”: as at the last day of any period, the ratio of (a) the excess of (i) the amount of Consolidated Total Indebtedness on such day over (ii) an amount equal to the sum of (x) the Unrestricted cash and Cash Equivalents and (y) cash and Cash Equivalents restricted in favor of the Administrative Agent (which may also include cash and Cash Equivalents securing other Indebtedness secured on a pari passu basis with the Obligations, so long as the holders of such other Indebtedness do not have the benefit of a control agreement (unless the Administrative Agent also has the benefit of a control agreement), in each case of UK Holdco and its Restricted Subsidiaries on such date, to (b) Consolidated EBITDA of UK Holdco and its Restricted Subsidiaries, calculated on a Pro Forma Basis for such period, and with such pro forma or scheduling adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio”.

 

Total Incremental Term Commitments ”: at any time, the aggregate Dollar Amount of the Incremental Term Commitments then in effect.

 

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Total Revolving Commitments ”: at any time, the aggregate Dollar Amount of the Revolving Commitments then in effect.

 

Total Revolving Extensions of Credit ”: at any time, the aggregate Outstanding Amount of the Revolving Extensions of Credit of the Revolving Lenders at such time.

 

Tower Borrowers ”: as defined in the preamble hereto.

 

Tower Borrower Default ”: any of the events specified in Section 9.2 , whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Tower Borrower Documents ”: the collective reference to the FHC Tower Borrower Documents, the US Tower Borrower Documents, the Loan Note Instruments and the Tower Security Documents.

 

Tower Borrower Event of Default ”: as defined in Section 9.2 ; provided , that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Tower Borrower Release ”: as defined in Section 11.7 .

 

Tower Co ”: Camelot TowerCo, an exempted company incorporated in the Cayman Islands with limited liability and a Wholly Owned Subsidiary of the FHC Tower Borrower.

 

Tower Co Loan ”: at any time, the loans from Tower Co to the Lux Company Borrower, equal to the entire amount invested in it and loaned to it, as applicable, by the FHC Tower Borrower from the proceeds of the Term Loans or any Tower Co Loan Indebtedness on economic terms and conditions identical to those applicable to the Term Loans or such Tower Co Loan Indebtedness (except that the rate of interest payable thereon may (but shall not be required to) exceed (but by no more than 0.10% per annum) the rates of interest payable on the Term Loans (excluding the Incremental Term Loans) or such Tower Co Loan Indebtedness borrowed by the FHC Tower Borrower); the obligations of the Lux Company Borrower in respect of any Tower Co Loan shall be subordinated pursuant to the Tower Co Subordination Agreement to the Lux Company Borrower’s obligations under the Loan Documents and no payment will be made by the Lux Company Borrower in respect of any Tower Co Loan unless, substantially contemporaneous therewith, an amount equal to the amount of such payment (minus the Tower Co Spread) is used by the FHC Tower Borrower to make a payment in respect of the Term Loans or such Tower Co Loan Indebtedness (to the extent the payment in respect of such Tower Co Loan Indebtedness is permitted under this Agreement), provided that, so long as no Default or Event of Default exists, the payment of interest to Tower Co under a Tower Co Term Loan Credit Agreement may be at a rate of interest that exceeds (but by no more than 0.10% per annum) the rate of interest payable on the Term Loans or such Tower Co Loan Indebtedness; provided , further , that during the continuance of any Default or Event of Default, such additional 0.10% (or lesser amount) per annum interest may continue to accrue and may be paid by the Lux Company Borrower to Tower Co when the condition resulting in the prohibition on payment thereof no longer exists. The additional 0.10% (or lesser amount) per annum interest payable on any Tower Co Loan is referred to herein collectively as the “ Tower Co Spread .”

 

Tower Co Loan Indebtedness ”: any Indebtedness (other than the Term Loans) permitted to be incurred by the FHC Tower Borrower pursuant to this Agreement.

 

Tower Co Spread ”: as defined in the term “Tower Co Loan.”

 

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Tower Co Subordination Agreement ”: the Tower Co Subordination Agreement, dated as of the Closing Date, among Tower Co, the Lux Company Borrower, Holdings and the Administrative Agent (and, in connection with the incurrence of Tower Co Loan Indebtedness, a substantially similar agreement or an amendment to any existing Tower Co Subordination Agreement), in each case substantially in the form of Exhibit K-1 .

 

Tower Co Term Loan Credit Agreement ”: the Term Loan Credit Agreement, dated as of the Closing Date, between the Lux Company Borrower (as borrower) and Tower Co (as lender) (and, in connection with the incurrence of Tower Co Loan Indebtedness, a substantially similar agreement).

 

Tower Co Transaction ”: in each case, on or immediately prior to the Closing Date:

 

(a)          the FHC Tower Borrower will enter into this Agreement and Incur a portion of the Initial Term Loans;

 

(b)          the FHC Tower Borrower will subscribe for Capital Stock of Tower Co in an amount no less than the cash received from the Indebtedness incurred pursuant to clause (a) above;

 

(c)          Tower Co will make a Tower Co Loan to the Lux Company Borrower in an amount no less than the cash received from the Indebtedness incurred pursuant to clause (a) above; and

 

(d)          UK Holdco will issue the Loan Note Instruments in an amount no less than the cash received from the Indebtedness incurred pursuant to clause (a) above and Lux Company Borrower will subscribe for the Loan Note Instruments.

 

Tower Group Member Permitted Liens ”: as defined in Section 7.2.A .

 

Tower Group Members ”: the collective reference to the Tower Borrowers and Tower Subsidiary Guarantors.

 

Tower Guaranteed Obligations ”: as defined in Section 8.1(a) .

 

Tower Guarantors ”: the collective reference to Holdings, UK Holdco, the Opco Borrowers, the Company Subsidiary Guarantors and the Tower Subsidiary Guarantors.

 

Tower LLC ”: Camelot Finance LLC, a Delaware limited liability company.

 

Tower LLC Loan ”: at any time, the loans from Tower LLC to the US Company Borrowers, with an aggregate principal amount equal to the entire amount invested in Tower LLC and loaned to Tower LLC, as applicable, by the US Tower Borrower from the proceeds of the Term Loans or any Tower LLC Loan Indebtedness on economic terms and conditions identical to those applicable to the Term Loans or such Tower LLC Loan Indebtedness (except that the rate of interest payable thereon may (but shall not be required to) exceed (but by no more than 0.10% per annum) the rates of interest payable on the Term Loans (excluding the Incremental Term Loans) or such Tower LLC Loan Indebtedness borrowed by the US Tower Borrower); the obligations of the US Company Borrowers in respect of any Tower LLC Loan shall be subordinated pursuant to the Tower LLC Subordination Agreement to the Opco Borrowers’ obligations under the Loan Documents and no payment will be made by the Opco Borrowers in respect of any Tower LLC Loan unless, substantially contemporaneous therewith, an amount equal to the amount of such payment (minus the Tower LLC Spread) is used by the US Tower Borrower to make a payment in respect of the Term Loans or such Tower LLC Loan Indebtedness (to the extent the payment in respect of such Tower LLC Loan Indebtedness is permitted under this Agreement), provided that, so long as no Default or Event of Default exists, the payment of interest to Tower LLC under a Tower LLC Term Loan Credit Agreement may be at a rate of interest that exceeds (but by no more than 0.10% per annum) the rate of interest payable on the Term Loans or such Tower LLC Loan Indebtedness; provided , further , that during the continuance of any Default or Event of Default, such additional 0.10% (or lesser amount) per annum interest may continue to accrue and may be paid by the Opco Borrowers to Tower LLC when the condition resulting in the prohibition on payment thereof no longer exists. The additional 0.10% (or lesser amount) per annum interest payable on any Tower LLC Loan is referred to herein collectively as the “ Tower LLC Spread .”

 

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Tower LLC Loan Indebtedness ”: any Indebtedness (other than the Term Loans) permitted to be incurred by the US Tower Borrower pursuant to this Agreement.

 

Tower LLC Spread ”: as defined in the term “Tower LLC Loan.”

 

Tower LLC Subordination Agreement ”: the Tower LLC Subordination Agreement, dated as of the Closing Date, among Tower LLC, the US Company Borrowers and the Administrative Agent (and, in connection with the incurrence of Tower LLC Loan Indebtedness, a substantially similar agreement or an amendment to any existing Tower LLC Subordination Agreement), in each case substantially in the form of Exhibit K-2 .

 

Tower LLC Term Loan Credit Agreement ”: the Term Loan Credit Agreement, dated as of the Closing Date, between the US Company Borrowers (as borrowers) and Tower LLC (as lender) (and, in connection with the incurrence of Tower LLC Loan Indebtedness, a substantially similar agreement).

 

Tower LLC Transaction ”: in each case, on or immediately prior to the Closing Date:

 

(a)          the US Tower Borrower will enter into this Agreement and Incur a portion of the Initial Term Loans;

 

(b)          the US Tower Borrower will subscribe for membership interests of Tower LLC in an amount no less than the cash received from the Indebtedness incurred pursuant to clause (a) above; and

 

(c)          Tower LLC will make Tower LLC Loans to the US Company Borrowers in an aggregate amount no less than the cash received from the Indebtedness incurred pursuant to clause (a) above.

 

Tower Loans ”: the collective reference to the Tower LLC Loan and the Tower Co Loan.

 

Tower Security Documents ”: the collective reference to each security document entered into to secure the obligations under the Loan Note Instrument (Term Loans) and the Tower Co Loan and each of the other agreements, instruments or documents that creates or purports to create a second priority Lien in favor of the holder and/or lender of the Loan Note Instrument (Term Loans) and the Tower Co Loan listed on Schedule 1.1D-2 , in each case, whether entered into on or after the Closing Date.

 

Tower Subordination Agreements ”: the collective reference to the Tower Co Subordination Agreement and the Tower LLC Subordination Agreement.

 

Tower Subsidiary Guarantors ”: Tower LLC and Tower Co.

 

Tower Term Loan Credit Agreements ”: the collective reference to the Tower LLC Term Loan Credit Agreement and the Tower Co Term Loan Credit Agreement.

 

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Tower Transactions ”: the collective reference to the Tower Co Transaction and the Tower LLC Transaction.

 

Transactions ”: (a) the consummation of the Tower Transactions, (b) the issuance and sale of the Senior Notes on or prior to the Closing Date, (c) the execution and delivery of the Loan Documents to be entered into on the Closing Date and the funding of the Loans on the Closing Date, (d) the consummation of the Acquisition, and (e) the payment of fees and expenses incurred in connection therewith.

 

Transferee ”: any Assignee or Participant.

 

Triggering Action ” means: (a) any distribution or acquisition described in Prop. Reg. 1.385-3(b)(3)(ii); and (b) if the proposed regulations under Section 385 are superseded by new proposed or temporary regulations or are finalized, in each case, prior to the Triggering Action or if Section 385 is amended prior to the Triggering Action, any other action described in the superseding proposed, temporary or final Section 385 regulations or in such amendments to Section 385, as applicable, that will cause the Tower LLC Loan to be recharacterized as equity under such regulations or such amendments for U.S. federal income tax purposes.

 

Type ”: as to any Loan, its nature as an ABR Loan or a Eurocurrency Loan.

 

UK Holdco ”: as defined in the preamble hereto.

 

UK Borrower ” a Revolver Co-Borrower incorporated in the United Kingdom.

 

UK Non-Bank Lender ” means (a) where a Revolving Lender or a Swingline Lender becomes a party to this Agreement on the day on which this Agreement is entered into, a Revolving Lender or a Swingline Lender listed as a UK Non-Bank Lender in Schedule 1.1A-1 , and (b) where a Revolving Lender or a Swingline Lender becomes a party to this Agreement after the date on which this Agreement is entered into, a Revolving Lender or a Swingline Lender which gives a UK Tax Confirmation in the Assignment and Assumption, Incremental Amendment or Refinancing Amendment pursuant to which such Lender becomes a party hereto.

 

UK Qualifying Lender ” means (a) a Revolving Lender or a Swingline Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document that is a Revolving Loan or a Swingline Loan (as applicable) and is (i) a Revolving Lender or Swingline Lender (as applicable) (A) which is a bank (as defined for the purpose of section 879 of the ITA 2007) making an advance under a Loan Document that is a Revolving Loan or a Swingline Loan (as applicable) and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA 2009; or (B) in respect of an advance made under a Loan Document that is a Revolving Loan or a Swingline Loan (as applicable) by a person that was a bank (as defined for the purpose of section 879 of the ITA 2007) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or (ii) a Revolving Lender or a Swingline Lender which is: (A) a company resident in the United Kingdom for United Kingdom tax purposes, or (B) a partnership each member of which is (x) a company so resident in the United Kingdom or (y) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009, or (C) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company; or (iii) a UK Treaty Lender, or (b) a Revolving Lender or a Swingline Lender which is a building society (as defined for the purposes of section 880 ITA) making an advance under a Loan Document that is a Revolving Loan or a Swingline Loan (as applicable).

 

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UK Tax Confirmation ” means a confirmation in writing by a Revolving Lender or a Swingline Lender that the person beneficially entitled to interest payable to that Revolving Lender or Swingline Lender in respect of an advance under a Loan Document that is a Revolving Loan or a Swingline Loan (as applicable) is either (a) a company resident in the United Kingdom for United Kingdom tax purposes or (b) a partnership each member of which is (i) a company so resident in the United Kingdom or (ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009 or (c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company.

 

UK Tax Deduction ” means a deduction or withholding for, or on account of, Tax imposed by the United Kingdom from a payment under a Loan Document.

 

UK Treaty ” has the meaning assigned to such term in the definition of “UK Treaty State”.

 

UK Treaty Lender ” means a Revolving Lender or a Swingline Lender which is (i) treated as a resident of a UK Treaty State for the purposes of the relevant Treaty, (ii) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected, and (iii) fulfills any other conditions which must be fulfilled under the relevant Treaty to obtain full exemption from Tax imposed by the United Kingdom on payments of interest.

 

UK Treaty State ” means a jurisdiction having a double taxation agreement (a “ Treaty ”) with the United Kingdom (a “ UK Treaty ”) which makes provision for full exemption from Tax imposed by the United Kingdom on interest.

 

Undisclosed Administration ”: in relation to a Lender or its direct or indirect parent company the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.

 

Uniform Commercial Code ” or “ UCC ”: the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time to time in any applicable jurisdiction.

 

United Kingdom ” or “ UK ”: the United Kingdom of Great Britain and Northern Ireland.

 

United States ”: the United States of America.

 

Unrestricted ”: when referring to cash or Cash Equivalents, means that such cash or Cash Equivalents are not Restricted.

 

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Unrestricted Subsidiary ”: (i) any Subsidiary of UK Holdco designated by the board of directors of the Borrower Representative as an Unrestricted Subsidiary pursuant to Section 6.12 subsequent to the Closing Date, (ii) any Subsidiary of an Unrestricted Subsidiary and (iii) each Receivables Subsidiary. For the avoidance of doubt, no Borrower may be designated as an Unrestricted Subsidiary at any time, and no Subsidiary of UK Holdco that is a Revolver Co-Borrower may be designated as an Unrestricted Subsidiary unless it shall have ceased to be a Revolver Co-Borrower pursuant to Section 12.3 prior to the effectiveness of such designation as an Unrestricted Subsidiary.

 

Unsecured Refinancing Revolving Facility ”: as defined in the definition of “Permitted Unsecured Refinancing Debt.”

 

Unsecured Refinancing Term Facility ”: as defined in the definition of “Permitted Unsecured Refinancing Debt.”

 

US Buyer ”: as defined in the recitals hereto.

 

US Company Borrowers ”: as defined in the recitals hereto.

 

US Intellectual Property Security Agreements ”: collectively, each of the intellectual property security agreements among the Loan Parties party thereto and the Administrative Agent, in each case substantially in the applicable form attached to the US Security Agreement.

 

US Loan Party ”: any Loan Party organized under the laws of the United States, any state within the United States or the District of Columbia.

 

US Pledge Agreement ”: the US Pledge Agreement dated as of the Closing Date among the Loan Parties party thereto and the Administrative Agent, substantially in the form of Exhibit A-5 .

 

US Security Agreement ”: the US Security Agreement dated as of the Closing Date among the Loan Parties party thereto and the Administrative Agent, substantially in the form of Exhibit A-6 .

 

US Subsidiary ”: any Subsidiary of UK Holdco organized under the laws of the United States, any state within the United States or the District of Columbia.

 

US Tower Borrower ”: as defined in the recitals hereto.

 

US Tower Borrower Documents ”: the Tower LLC Term Loan Credit Agreement and the Tower LLC Subordination Agreement.

 

VAT ”: (a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a), or imposed elsewhere.

 

Voting Stock ”: with respect to any Person as of any date, the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

Weighted Average Life to Maturity ”: when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

 

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Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

 

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares or interests required to be held by foreign nationals or other third parties to the extent required by applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

 

Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

1.2           Other Interpretive Provisions .

 

(a)          Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)          As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms not defined in Section 1.1 and accounting terms partly defined in Section 1.1 , to the extent not defined, shall have the respective meanings given to them under GAAP;, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume or become liable in respect of (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, real property, leasehold interests and contract rights, (v) the term “consolidated” with respect to any Person refers to such Person consolidated with the Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate of such Person, (vi) references to agreements or other Contractual Obligations (including any of the Loan Documents) shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, novated, supplemented, restated, extended, amended and restated or otherwise modified from time to time and (vii) a debt instrument includes any equity or hybrid instrument to the extent characterized as indebtedness.

 

(c)          The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and clause, paragraph, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(d)          The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

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1.3           Accounting . For purposes of all financial definitions and calculations in this Agreement, including the determination of Excess Cash Flow, there shall be excluded for any period the effects of purchase accounting (including the effects of such adjustments pushed down to UK Holdco and the Restricted Subsidiaries) in component amounts required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to UK Holdco and the Restricted Subsidiaries), as a result of the Transactions, any acquisition consummated prior to the Closing Date, any Permitted Acquisitions, or the amortization or write-off of any amounts thereof.

 

1.4           Limited Condition Acquisitions   Notwithstanding anything to the contrary herein, in connection with any action being taken solely in connection with a Limited Condition Acquisition, for purposes of:

 

(a)          determining compliance with any provision of this Agreement which requires the calculation of any financial ratio or test, including the Total First Lien Net Leverage Ratio, Total Net Leverage Ratio and Fixed Charge Coverage Ratio, or requires the absence of any Default or Event of Default; or

 

(b)          testing availability under baskets set forth in this Agreement (including baskets measured as a percentage of Total Assets);

 

in each case, at the option of the Borrower Representative (the Borrower Representative’s election to exercise such option in connection with any Limited Condition Acquisition, an “ LCA Election ”), the date of determination of whether any such action is permitted hereunder shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “ LCA Test Date ”), and if, after giving effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) on a Pro Forma Basis as if they had occurred at the beginning of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered ending prior to the LCA Test Date, UK Holdco or the Restricted Subsidiaries would have been permitted to take such action on the relevant LCA Test Date in compliance with such ratio, test or basket, such ratio, test or basket shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower Representative has made an LCA Election and any of the ratios, tests or baskets for which compliance was determined or tested as of the LCA Test Date are exceeded as a result of fluctuations in any such ratio, test or basket, including due to fluctuations in Consolidated EBITDA or Total Assets at or prior to the consummation of the relevant transaction or action, such baskets, tests or ratios will not be deemed to have been exceeded as a result of such fluctuations.

 

1.5           Currency Equivalents Generally .

 

(a)          Any amount specified in this Agreement (other than in Sections 2 , 3 , 10 and 11 or as set forth in clause (b) of this Section) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined at the rate of exchange quoted by the Reuters World Currency Page for the Alternative Currency at 11:00 a.m. (London time) on such day (or, in the event such rate does not appear on any Reuters World Currency Page, by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower Representative, or, in the absence of such agreement, such rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 11:00 a.m. (New York City time) on such date for the purchase of Dollars for delivery two Business Days later); provided that the determination of any Dollar Amount shall be made in accordance with Section 2.29 ; provided that if any basket is exceeded solely as a result of fluctuations in applicable currency exchange rates after the last time such basket was utilized, such basket will not be deemed to have been exceeded solely as a result of such fluctuations in currency exchange rates.

 

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(b)          For purposes of determining the Total First Lien Net Leverage Ratio and the Total Net Leverage Ratio, amounts denominated in a currency other than Dollars will be converted to Dollars for the purposes of (A) testing the covenant set forth in Section 7.1 , at the Exchange Rate as of the last day of the fiscal quarter for which such measurement is being made, and (B) calculating any Total Net Leverage Ratio and the Total First Lien Net Leverage Ratio (other than for the purposes of determining compliance with Section 7.1 ), at the Exchange Rate as of the date of calculation, and will, in the case of Indebtedness, reflect the currency translation effects, determined in accordance with GAAP, of Swap Agreements permitted hereunder for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar Amount of such Indebtedness.

 

1.6           Change in Currency .

 

(a)          Each obligation of any Loan Party to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the Closing Date shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.

 

(b)          Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

 

(c)          Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

 

1.7           Luxembourg Law Terms .

 

Without prejudice to the generality of any provision of this Agreement, in this Agreement where it relates to a Luxembourg Loan Party, a reference to: (a) a winding-up, administration or dissolution includes, without limitation, bankruptcy ( faillite ), insolvency, voluntary and judicial liquidation ( liquidation volontaire et judiciare ), composition with creditors ( concordat préventif de la faillite ), moratorium or reprieve from payment ( sursis de paiement ), controlled management ( gestion contrôlée ), or fraudulent conveyance ( action paulienne ), general settlement with creditors, reorganization or similar laws affecting the rights of creditors generally; (b) a receiver, administrative receiver, administrator, trustee, custodian, sequestrator, conservator or similar officer includes, without limitation, a juge délégué , commissaire, juge-commissaire, mandatair ad hoc, administrateur, proviso ire, liquidateur or curateur ; (c) a lien or security interest includes any hypothèque, nantissement, gage, privilège, sûreté réelle, droit de rétention , and any type of security in rem ( sûreté réelle ) or agreement or arrangement having a similar effect and any transfer of title by way of security; (d) a person being unable to pay its debts includes that person being in a state of cessation de paiements ; (e) creditors process means an executory attachment ( saisie exécutoire ) or conservatory attachment ( saisie conservatoire ); (f) a guarantee includes any garantie which is independent from the debt to which it relates and excludes any suretyship ( cautionnement ) within the meaning of Articles 2011 and seq. of the Luxembourg Civil Code; (g) by-laws or constitutional documents includes its up-to-date (restated) articles of association ( statuts coordonnés ) and (h) a director or a manager includes an administrateur and a gérant .

 

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1.8           Foreign Guarantor Provisions . This Agreement and all of the other Loan Documents shall be subject in all respects to the Foreign Guarantor Provisions set forth in Schedule 1.8 (as may be supplemented pursuant to Section 11.1 or as otherwise agreed to by the Administrative Agent).

 

SECTION 2.
AMOUNT AND TERMS OF COMMITMENTS

 

2.1           Term Commitments . Subject to the terms and conditions hereof, each Term Lender severally agrees to make a single Term Loan to the Tower Borrowers and the Company Borrowers on the Closing Date in Dollars and in an amount not to exceed the amount of the Term Commitment of such Lender on the Closing Date. The Term Loans may from time to time be Eurocurrency Loans or ABR Loans, as determined by the Borrower Representative and notified to the Administrative Agent in accordance with Sections 2.2 and  2.12 . The Term Commitments (excluding any Incremental Term Commitments or Other Term Commitments) shall automatically terminate at 11:59 p.m. (New York City time) on the Closing Date. Once borrowed and repaid, no Term Loan Commitment may be re-borrowed.

 

2.2           Procedure for Borrowing Term Loans . The Borrower Representative (on behalf of the Borrowers under any Term Facility) shall give the Administrative Agent irrevocable notice, substantially in the form of Exhibit H or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative (which notice must be received by the Administrative Agent no later than (A) 1:00 p.m. (New York City time), on the anticipated Closing Date, in the case of ABR Loans, (B) 2:00 p.m. (New York City time), one Business Day prior to the anticipated Closing Date, in the case of Eurocurrency Loans, in each case or such shorter period as the Administrative Agent shall agree) requesting that the Term Lenders make the Initial Term Loans on the Closing Date and specifying (i) the amount to be borrowed, (ii) the Type of Loan, (iii) the applicable Interest Period, and (iv) instructions for remittance of the Term Loans to be borrowed. Notwithstanding the foregoing, such notices may be conditioned on the occurrence of the Closing Date or, with respect to Incremental Term Loans, may be conditioned on the occurrence of any transaction utilizing such Incremental Term Loans. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 4:00 p.m. (New York City time) on the Closing Date, each such Term Lender shall make available to the Administrative Agent an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. Such borrowing will then be made available to the Tower Borrowers (on behalf of the Opco Borrowers) by the Administrative Agent crediting such account or by wire transfer as is designated in writing to the Administrative Agent by the Borrower Representative (or as otherwise directed by the Borrower Representative), with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders and in like funds as received by the Administrative Agent.

 

2.3           Repayment of Term Loans .

 

(a)          The principal amount of the Term Loans (excluding Other Term Loans, Incremental Term Loans and, solely in the case of clause (ii), Extended Term Loans) of each Term Lender shall be repaid by the Tower Borrowers and the Company Borrowers (i) on the last Business Day of each March, June, September and December (commencing on December 31, 2016), in an amount equal to 0.25% of the sum of the aggregate Outstanding Amount of the Term Loans on the Closing Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.17(b) ) and (ii) on the Term Loan Maturity Date, in an amount equal to the aggregate Outstanding Amount on such date, together in each case with accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment.

 

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(b)          To the extent not previously paid, (i) each Incremental Term Loan shall be due and payable on the Incremental Term Loan Maturity Date applicable to such Incremental Term Loan, (ii) each Other Term Loan shall be due and payable on the maturity date thereof as set forth in the Refinancing Amendment applicable thereto together and (iii) each Extended Term Loan shall be due and payable on the maturity date thereof as set forth in the Permitted Amendment applicable thereto together, in each case, with accrued and unpaid interest on the principal amount to be paid to but excluding the date of payment.

 

(c)          The Obligations of the Tower Borrowers and the Company Borrowers as Borrowers of the Term Loans, whether on account of principal, interest, fees or otherwise, are joint and several.

 

2.4           Revolving Commitments .

 

(a)          Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Revolving Borrowers in Dollars or in one or more Alternative Currencies from time to time during the Revolving Commitment Period in an aggregate principal amount which, when added to such Lender’s Revolving Percentage of the sum of (i) the aggregate Outstanding Amount of L/C Obligations at such time and (ii) the aggregate Outstanding Amount of the Swingline Loans at such time, does not exceed the amount of such Lender’s Revolving Commitment. During the Revolving Commitment Period the Revolving Borrowers may use the Revolving Commitments by borrowing, repaying or prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurocurrency Loans or, with respect to Revolving Loans denominated in Dollars, ABR Loans, as determined by the applicable Revolving Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and  2.12 .

 

(b)          The Revolving Borrowers shall repay all outstanding Revolving Loans on the Revolving Termination Date, together with accrued and unpaid interest on the Revolving Loans, to but excluding the date of payment.

 

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2.5           Procedure for Borrowing of Revolving Loans . The Revolving Borrowers may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that (x) any such borrowings on the Closing Date shall not in the aggregate exceed the sum of (i) $20,000,000 (exclusive of any Letters of Credit issued on the Closing Date) and (ii) at the applicable Revolving Borrower’s election, an amount to fund upfront or similar fees or original issue discount payable by the Borrowers or any of the Restricted Subsidiaries to the Lenders providing Commitments in the initial primary syndication thereof, resulting from the exercise of “market flex” as provided in the Fee Letter and (y) the Borrower Representative (on behalf of the Revolving Borrowers) shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to (a) 1:00 p.m. (New York City time), three Business Days prior to the requested Borrowing Date, in the case of Eurocurrency Loans denominated in Dollars, Euros, Swiss Francs or Sterling or 1:00 p.m. (New York City time), or four Business Days prior to the requested Borrowing Date, in the case of Eurocurrency Loans denominated in Yen or Australian Dollars, or (b) 10:00 a.m. (New York City time), on the requested Borrowing Date, in the case of ABR Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the currency in which the Revolving Loans to be borrowed are to be denominated, (iii) the requested Borrowing Date, (iv) in the case of Eurocurrency Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor and (v) instructions for remittance of the applicable Loans to be borrowed; provided , however , that if the Borrower Representative (on behalf of the Revolving Borrowers) wishes to request Eurocurrency Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) seven Business Days prior to the requested date of such Borrowing, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m. (New York City Time) three Business Days before the requested date of such Borrowing, in the case of Eurocurrency Loans denominated in Dollars, Euros, Swiss Francs or Sterling, or four Business Days before the requested date of such Borrowing, in the case of Eurocurrency Loans denominated in Yen or Australian Dollars, the Administrative Agent shall notify the Borrower Representative (on behalf of the Revolving Borrowers) (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if the then aggregate Available Revolving Commitments of the Lenders are less than $1,000,000, such lesser amount) and (y) in the case of Eurocurrency Loans, (1) if denominated in Dollars, $1,000,000 or a whole multiple of $500,000 in excess thereof or (2) if denominated in an Alternative Currency, the Dollar Amount of €1,000,000 or a whole multiple of the Dollar Amount of €500,000 in excess thereof; provided that the Swingline Lender may request, on behalf of the Revolving Borrowers, borrowings under the Revolving Commitments that are ABR Loans in other amounts pursuant to Section 2.7 . Upon receipt of any such notice from the Borrower Representative, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro   rata share of each borrowing available to the Administrative Agent for the account of the Revolving Borrower designated in the applicable notice of Borrowing prior to 1:00 p.m. (New York City time) for Borrowings denominated in Dollars and prior to 8:00 a.m. (New York City Time) for Borrowings denominated in an Alternative Currency on the Borrowing Date requested by the applicable Revolving Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the applicable Revolving Borrower by the Administrative Agent crediting such account or by wire transfer as is designated in writing to the Administrative Agent by the Borrower Representative (on behalf of the applicable Revolving Borrower), with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

2.6           Swingline Commitment .

 

(a)          Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Revolving Borrowers under the Revolving Commitments from time to time during the Revolving Commitment Period by making swingline loans in Dollars (“ Swingline Loans ”) to the Revolving Borrowers; provided that (i) the aggregate Outstanding Amount of Swingline Loans at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that the aggregate Outstanding Amount of Swingline Loans at any time, when aggregated with the Outstanding Amount of the Swingline Lender’s other Revolving Loans, may exceed the Swingline Commitment then in effect) and (ii) the Revolving Borrowers shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments of the Lenders would be less than zero. During the Revolving Commitment Period, the Revolving Borrowers may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.

 

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(b)          The Revolving Borrowers shall repay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Revolving Termination Date.

 

2.7           Procedure for Swingline Borrowing; Refunding of Swingline Loans .

 

(a)          Whenever a Revolving Borrower desires that the Swingline Lender make Swingline Loans, the Borrower Representative (on behalf of the applicable Revolving Borrower) shall give the Swingline Lender irrevocable facsimile notice (which facsimile notice must be received by the Swingline Lender not later than 1:00 p.m. (New York City time) on the proposed Borrowing Date) confirmed promptly in writing substantially in the form of Exhibit L or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative, specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof. Promptly thereafter, on the Borrowing Date specified in the notice in respect of Swingline Loans, the Swingline Lender shall make available to Borrower Representative (or the applicable Revolving Borrower specified in the notice of Borrowing) an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender by crediting such account or by wire transfer as is designated in writing to the Swingline Lender by the Borrower Representative.

 

(b)          If prior to the time a Revolving Loan would have otherwise been made pursuant to Section 2.7(b) , one of the events described in Section 9.1(g) shall have occurred and be continuing with respect to the Borrower Representative or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.7(b) , each Revolving Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.7(b) or upon the request of the Swingline Lender, purchase for cash an undivided participating interest in the aggregate Outstanding Amount of Swingline Loans by paying to the Swingline Lender an amount (the “ Swingline Participation Amount ”) equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the aggregate Outstanding Amount of Swingline Loans at such time that were to have been repaid with such Revolving Loans or that the Swingline Lender otherwise requests Revolving Lenders to purchase participation interests in.

 

(c)          Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided , however , that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

 

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(d)          The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Revolving Borrowers (who hereby irrevocably direct the Swingline Lender to act on their behalf), on one Business Days’ notice given by the Swingline Lender no later than 12:00 Noon (New York City time) request each Revolving Lender to make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate Outstanding Amount of the Swingline Loans (the “ Refunded Swingline Loans ”) on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent in immediately available funds, not later than 10:00 a.m. (New York City time) one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans.

 

(e)          Each Revolving Lender’s obligation to make the Loans referred to in Section 2.7(b) and to purchase participating interests pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or any Borrower may have against the Swingline Lender, any Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5 , (iii) any adverse change in the condition (financial or otherwise) of any Borrower, (iv) any breach of this Agreement or any other Loan Document by any Borrower, any other Loan Party or any other Revolving Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

(f)          Notwithstanding anything to the contrary contained in Sections 2.6 and 2.7 or elsewhere in this Agreement, (i) the Swingline Lender shall not be obligated to make any Swingline Loan at a time when a Revolving Lender is a Defaulting Lender unless the Swingline Lender has entered into arrangements reasonably satisfactory to it and the Borrower Representative to eliminate the Swingline Lender’s risk with respect to the Defaulting Lender’s or Defaulting Lenders’ participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender’s or Defaulting Lenders’ Pro Rata Share of the aggregate Outstanding Amount of Swingline Loans at such time and (ii) the Swingline Lender shall not make any Swingline Loan after it has received written notice from any Borrower, any other Loan Party or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice (A) of rescission of all such notices from the party or parties originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default in accordance with Section 11.1 .

 

2.8           Facility Fees, etc .

 

(a)          The Revolving Borrowers agree to pay to the Administrative Agent for the account of each Revolving Lender, in accordance with its Revolving Percentage, a facility fee (the “ Facility Fee ”) equal to the Facility Fee Rate times the Total Revolving Commitments (whether used or not used), subject to adjustment as provided in Section 2.25 . The Facility Fee shall accrue at all times during the Revolving Commitment Period, including at any time during which one or more of the conditions in Section 5 is not satisfied, and shall be due and payable in arrears on each applicable Fee Payment Date. The Facility Fee shall be calculated quarterly in arrears, and if there is any change in the Facility Fee Rate during any quarter, the actual daily amount shall be computed and multiplied by the Facility Fee Rate separately for each period during such quarter that such Facility Fee Rate was in effect.

 

(b)          The Borrowers agree to pay to the Administrative Agent and the Joint Lead Arrangers (and their respective affiliates) the fees in the amounts and on the dates set forth in any fee agreements (including the Fee Letter) with such Persons and to perform any other obligations contained therein.

 

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2.9           Termination or Reduction of Revolving Commitments . The Borrower Representative (on behalf of the Revolving Borrowers) shall have the right, upon not less than two Business Days’ notice (to the extent there are no Revolving Loans outstanding at such time) or not less than three Business Days’ notice (in any other case) to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments. Any termination or reduction of Revolving Commitments pursuant to this Section 2.9 shall be accompanied by prepayment of the Revolving Loans and/or Swingline Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced; provided that if the aggregate Outstanding Amount of Revolving Loans and Swingline Loans at such time is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower Representative shall, to the extent of the balance of such excess, Collateralize outstanding Letters of Credit, in each case, in a manner reasonably satisfactory to the Administrative Agent. Any such reduction shall be in an amount equal to $1,000,000 or a whole multiple thereof or, if less than $1,000,000, the amount of the Revolving Commitments, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect; provided , further , that if any such notice of termination of the Revolving Commitments indicates that such termination is to be made in connection with a Refinancing of the Facilities, such notice of termination may be revoked if such Refinancing is not consummated and any Eurocurrency Loan denominated in Dollars that was the subject of such notice shall be continued as an ABR Loan. Each prepayment of the Loans under this Section 2.9 (except in the case of Revolving Loans that are ABR Loans (to the extent all Revolving Loans are not being prepaid) and Swingline Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

 

2.10         Optional Prepayments .

 

(a)          The Borrowers may at any time and from time to time prepay the Loans, in whole or in part, in each case, without premium or penalty, upon irrevocable notice, substantially in the form of Exhibit E or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative (on behalf of the Borrowers), which notice must be received by the Administrative Agent no later than 1:00 p.m. (New York City time) three Business Days prior to the prepayment date, in the case of Eurocurrency Loans denominated in Dollars, Euros, Swiss Francs or Sterling or 1:00 p.m. (New York City time) four Business Days prior to the prepayment date, in the case of Eurocurrency Loans denominated in Yen or Australian Dollars, and no later than 1:00 p.m. (New York City time) on the prepayment date, in the case of ABR Loans; provided that if a Eurocurrency Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrowers shall also pay any amounts owing pursuant to Section 2.21 ; provided , further , that if such notice of prepayment indicates that such prepayment is to be funded with the proceeds of a Refinancing of the Facilities, such notice of prepayment may be revoked if such Refinancing is not consummated and any Eurocurrency Loan denominated in Dollars that was the subject of such notice shall be continued as an ABR Loan. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans and Swingline Loans, other than in connection with a repayment of all Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of (x) in the case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof, (y) in the case of Eurocurrency Loans denominated in Dollars, $1,000,000 or a whole multiple of $500,000 in excess thereof and (z) in the case of Eurocurrency Loans denominated in an Alternative Currency, the Dollar Amount of €1,000,000 or a whole multiple of the Dollar Amount of €500,000 in excess thereof. Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.

 

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(b)          Notwithstanding anything herein to the contrary, in the event that, on or prior to the date that is six months after the Closing Date, any Borrower (x) makes any prepayment of Term Loans with the proceeds of any Repricing Transaction described under clause (i) of the definition of Repricing Transaction, or (y) effects any amendment of this Agreement resulting in a Repricing Transaction under clause (ii) of the definition of Repricing Transaction, the Borrower Representative shall on the date of such prepayment or amendment, as applicable, pay to each Lender (I) in the case of such clause (x), 1.00% of the principal amount of the Term Loans so prepaid and (II) in the case of such clause (y), 1.00% of the aggregate amount of the Term Loans affected by such Repricing Transaction and outstanding on the effective date of such amendment (a “ Repricing Premium ”).

 

2.11         Mandatory Prepayments and Commitment Reductions .

 

(a)          If any Indebtedness shall be incurred by any Group Member (other than any Indebtedness permitted to be incurred by any such Person in accordance with Section 7.2 or 7.1.A ), concurrently with, and as a condition to closing of such transaction, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such issuance or incurrence toward the prepayment of the Loans as set forth in clause (g) of this Section 2.11 .

 

(b)          Subject to clause (d) of this Section 2.11 , if, for any Excess Cash Flow Period, there shall be Excess Cash Flow, an amount equal to (i) the ECF Percentage for such period of such Excess Cash Flow over (ii) to the extent not funded with (x) the proceeds of Indebtedness constituting “long term indebtedness” (or a comparable caption) under GAAP (other than Indebtedness in respect of any revolving credit facility) or (y) the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 , the aggregate amount of (1) all Purchases by any Permitted Auction Purchaser (determined by the actual cash purchase price paid by such Permitted Auction Purchaser for such Purchase and not the par value of the Loans purchased by such Permitted Auction Purchaser) pursuant to a Dutch Auction permitted hereunder and (2) voluntary prepayments of Term Loans and Revolving Loans (but, in the case of Revolving Loans, only to the extent of a concurrent and permanent reduction in the Revolving Commitments) made by the Borrowers during the Excess Cash Flow Period shall, on the relevant Excess Cash Flow Application Date, be applied toward the prepayment of the Loans as set forth in clause (g) of this Section 2.11 , provided that no such prepayment shall be made if the Excess Cash Flow for any Excess Cash Flow Period is less than $5,000,000. Each such prepayment shall be made on a date (an “ Excess Cash Flow Application Date ”) no later than (i) 10 Business Days after the date on which the financial statements of UK Holdco referred to in Section 6.1(a) , for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Lenders or (ii) if such financial statements are actually delivered prior to the date on which they are required to be delivered pursuant to Section 6.1(a) , the last Business Day of the calendar month in which such financial statements are actually delivered (but in no event later than the date set forth in clause (i) of this sentence).

 

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(c)          Subject to clause (d) of this Section 2.11 , if, on any date, UK Holdco or any Restricted Subsidiary shall receive Net Cash Proceeds from any Asset Sale or any Recovery Event in excess of $5,000,000 in any fiscal year, then, unless the Borrower Representative has determined in good faith that such Net Cash Proceeds shall be reinvested in its business (a “ Reinvestment Event ”), then an aggregate amount equal to the Asset Sale Percentage of such Net Cash Proceeds shall be applied within five Business Days of such date to prepay (A) outstanding Term Loans in accordance with this Section 2.11 and (B) at the Borrower Representative’s option, outstanding Indebtedness that is secured by the Collateral on a pari passu basis incurred (x) as Permitted First Priority Refinancing Debt or (y) pursuant to Section 7.2(b)(vi) (collectively, “ Other Applicable Indebtedness ”); provided that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to any Asset Sale or Recovery Event, shall be applied to prepay the outstanding Loans as set forth in Section 2.11(g) . Any such Net Cash Proceeds may be applied to Other Applicable Indebtedness only to (and not in excess of) the extent to which a mandatory prepayment in respect of such Asset Sale or Recovery Event is required under the terms of such Other Applicable Indebtedness (with any remaining Net Cash Proceeds applied to prepay outstanding Term Loans in accordance with the terms hereof), unless such application would result in the holders of Other Applicable Indebtedness receiving in excess of their pro rata share (determined on the basis of the aggregate Outstanding Amount of Term Loans and Other Applicable Indebtedness at such time) of such Net Cash Proceeds relative to Term Lenders, in which case such Net Cash Proceeds may only be applied to Other Applicable Indebtedness on a pro rata basis with outstanding Term Loans. To the extent the holders of Other Applicable Indebtedness decline to have such indebtedness repurchased, repaid or prepaid with any such Net Cash Proceeds, the declined amount of such Net Cash Proceeds shall promptly (and, in any event, within 10 Business Days after the date of such rejection) be applied to prepay Term Loans in accordance with the terms hereof (to the extent such Net Cash Proceeds would otherwise have been required to be applied if such Other Applicable Indebtedness was not then outstanding).

 

(d)          Notwithstanding anything to the contrary in this Agreement (including clauses (b) and (c) above), to the extent that the Borrower Representative has determined in good faith that (i) any of or all the Net Cash Proceeds of any Asset Sale or Recovery Event by a Subsidiary or Excess Cash Flow attributable to Subsidiaries (or branches of Subsidiaries) are prohibited or delayed by applicable local law from being repatriated to the relevant Borrower(s) (including financial assistance and corporate benefit restrictions and fiduciary and statutory duties of the relevant directors), (ii) such repatriation would present a material risk of liability for the applicable Subsidiary or its directors or officers (or gives rise to a material risk of breach of fiduciary or statutory duties by any director or officers) or (iii) in the case of Foreign Subsidiaries, such repatriation or any distribution of the relevant amounts would result in material adverse Tax consequences, the portion of such Net Cash Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Loans at the times set forth in this Section 2.11 but may be retained by the applicable Subsidiary or branch (the Borrowers hereby agreeing to cause the applicable Subsidiary or branch to promptly take commercially reasonable actions to permit such repatriation without violating applicable local law or incurring material adverse Tax consequences); provided , that for a period of 450 days from receipt of such Net Cash Proceeds, if such repatriation, and once such repatriation of any of such affected Net Cash Proceeds becomes permitted under such applicable local law, would not present a material risk as described in clause (ii) above, or no such material adverse Tax consequences would result from such distribution, such distribution will be immediately affected and such distributed Net Cash Proceeds will be promptly (and in any event not later than 10 Business Days after such distribution) applied (net of additional Taxes payable or reserved against as a result thereof) to the repayment of loans pursuant to this Section 2.11 .

 

(e)          In the event the aggregate Outstanding Amount of Revolving Loans, L/C Obligations and Swingline Loans at any time exceeds (the “ Revolving Excess ”) the Total Revolving Commitments then in effect, the Revolving Borrowers shall immediately repay Swingline Loans and Revolving Loans and Collateralize Letters of Credit to the extent necessary to remove such Revolving Excess.

 

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(f)          The Borrower Representative shall deliver to the Administrative Agent notice, substantially in the form of Exhibit E or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative (on behalf of the Borrowers), of each prepayment required under this Section 2.11 , which notice must be received by the Administrative Agent not less than three Business Days (or such shorter time as the Administrative Agent shall reasonably agree) prior to the date such prepayment shall be made. The Administrative Agent will promptly notify each applicable Lender of such notice. Each such Lender may reject all of its Pro Rata Share of the prepayment (such declined amounts, the “ Declined Proceeds ”) by providing written notice (each, a “ Rejection Notice ”) to the Administrative Agent and the Borrower Representative no later than 12:00 p.m. (New York City time), two Business Days after the date of such Lender’s receipt of such notice from the Administrative Agent. If a Lender fails to deliver a Rejection Notice to the Administrative Agent within the time frame specified above such failure will be deemed an acceptance of such prepayment. Subject to any requirements of the Senior Notes and any other Indebtedness, any Declined Proceeds may be retained by the Borrowers (such retained amount, the “ Retained Declined Proceeds ”). The Borrower Representative shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.11 , an Officer’s Certificate setting forth in reasonable detail the calculation of the amount of such prepayment.

 

(g)          Amounts to be applied in connection with any mandatory prepayments made pursuant to this Section 2.11 shall be applied to the prepayment of the Term Loans in accordance with Section 2.17(b) ; provided that at any time after the Term Loans have been repaid or prepaid in full, the provisions of this sentence notwithstanding, any prepayments required by this Section 2.11 shall be applied first , to prepay any outstanding Revolving Loans, and second , to Collateralize any outstanding Letters of Credit, in each case, without any reduction of the Revolving Commitments. The application of any prepayment of Loans pursuant to this Section 2.11 shall be made on a pro   rata basis regardless of Type. Each prepayment of the Loans under this Section 2.11 (except in the case of Revolving Loans that are ABR Loans (to the extent all Revolving Loans are not being prepaid) and Swingline Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

 

(h)          Notwithstanding any of the other provision of this Section 2.11 , so long as no Default shall have occurred and be continuing, if any prepayment of Eurocurrency Loans is required to be made under this Section 2.11 other than on the last day of the Interest Period applicable thereto, the applicable Borrower may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder with the Administrative Agent, to be held as security for the obligations of the applicable Borrower to make such prepayment pursuant to a cash collateral agreement to be entered into on terms reasonably satisfactory to the Administrative Agent until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from any Borrower or any other Loan Party) to apply such amount to the prepayment of such Eurocurrency Loans in accordance with this Section 2.11 (determined as of the date such prepayment was required to be originally made); provided that such unpaid Eurocurrency Loans shall continue to bear interest in accordance with Section 2.15 until such unpaid Eurocurrency Loans have been prepaid. Upon the occurrence and during the continuance of any Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from any Borrower or any other Loan Party) to apply such amount to the prepayment of the applicable Eurocurrency Loans in accordance with this Section 2.11 (determined as of the date such prepayment was required to be originally made). Notwithstanding anything to the contrary contained in this Agreement, any amounts held by the Administrative Agent pursuant to this subsection (h) pending application to any Eurocurrency Loans shall be held and applied to the satisfaction of such Eurocurrency Loans prior to any other application of such property as may be provided for herein.

 

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2.12         Conversion and Continuation Options .

 

(a)          The Borrower Representative may elect from time to time to convert Eurocurrency Loans denominated in Dollars to ABR Loans by giving the Administrative Agent prior irrevocable notice of such election telephonically ( provided that each telephonic notice is confirmed promptly in writing), substantially in the form of Exhibit H or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative (on behalf of the Borrowers), no later than 1:00 p.m. (New York City time), three Business Days prior to the proposed conversion date; provided that any such conversion of Eurocurrency Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower Representative may elect from time to time to convert ABR Loans to Eurocurrency Loans by giving the Administrative Agent prior irrevocable notice of such election telephonically ( provided that each telephonic notice is confirmed promptly in writing), substantially in the form of Exhibit H or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative (on behalf of the Borrowers), no later than 1:00 p.m. (New York City time), on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor); provided , however , that if the Borrower Representative wishes to request Eurocurrency Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) seven Business Days prior to the requested date of such Borrowing conversion, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is approved by all of them. Not later than 11:00 a.m. (New York City time), three Business Days before the requested date of such Borrowing conversion, the Administrative Agent shall notify the Borrower Representative (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders; provided , further that, no ABR Loan may be converted into a Eurocurrency Loan when any Event of Default has occurred and is continuing. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. With respect to Loans denominated in Dollars (i) if the Borrower Representative fails to give a timely notice requesting any conversion from one Type of Loan to another, then the applicable Loans shall be continued as, or converted to, ABR Loans and (ii) if the Borrower Representative fails to give a timely notice requesting a conversion, then the applicable Loans shall be converted to ABR Loans. Any such automatic conversion to ABR Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Loans.

 

(b)          Any Eurocurrency Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower Representative (on behalf of the Borrowers) giving irrevocable notice to the Administrative Agent telephonically ( provided that each telephonic notice is confirmed promptly in writing), substantially in the form of Exhibit H or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower Representative, no later than 1:00 p.m. (New York City time) on the third Business Day preceding the proposed continuation date in the case of Eurocurrency Loans denominated in Dollars, Euros, Swiss Francs or Sterling or 1:00 p.m. (New York City time) on the fourth Business Day preceding the proposed continuation date, in the case of Eurocurrency Loans denominated in Yen or Australian Dollars; provided , however , that if the Borrower Representative wishes to request Eurocurrency Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) seven Business Days prior to the requested date of such Borrowing continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 1:00 p.m. (New York City time), three Business Days before the requested date of such Borrowing continuation, in the case of Eurocurrency Loans denominated in Dollars, Euros, Swiss Francs or Sterling or 1:00 p.m. (New York City time) four Business Days before the requested date of such Borrowing continuation, in the case of Eurocurrency Loans denominated in Yen or Australian Dollars, the Administrative Agent shall notify the Borrower Representative (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders; provided , further that, to the extent the Required Lenders provide written notice thereof to the Borrower Representative, no Eurocurrency Loan may be continued as such when any Event of Default has occurred and is continuing; provided , further , that (i) with respect to Eurocurrency Loans denominated in Dollars, if the Borrower Representative shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period and (ii) with respect to Eurocurrency Loans denominated in an Alternative Currency, if the Borrower Representative shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall be automatically made as, or converted to, Eurocurrency Loans with an Interest Period of one month. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

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2.13         Limitations on Eurocurrency Tranches . Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurocurrency Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, (a) the aggregate principal amount of the Eurocurrency Loans denominated in Dollars comprising each Eurocurrency Tranche shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof, (b) the aggregate principal amount of the Eurocurrency Loans denominated in an Alternative Currency comprising each Eurocurrency Tranche shall be equal to the Dollar Amount of €1,000,000 or a whole multiple of the Dollar Amount of €500,000 in excess thereof and (c) (i) in the case of Term Loans, no more than five Eurocurrency Tranches shall be outstanding at any one time and (ii) in the case of Revolving Loans, no more than 10 Eurocurrency Tranches shall be outstanding at any one time.

 

2.14         Interest Rates and Payment Dates .

 

(a)          Each Eurocurrency Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurocurrency Rate determined for such day plus the Applicable Margin. Each Loan denominated in an Alternative Currency shall be a Eurocurrency Loan.

 

(b)          Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)          (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% and (ii) if all or a portion of (x) any interest payable on any Loan or Reimbursement Obligation, (y) any Facility Fee or (z) any other amount payable hereunder or under any other Loan Document shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of any such other amounts that do not relate to a particular Facility, the rate then applicable to ABR Loans under the Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

 

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(d)          Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to Section 2.14(c) shall be payable from time to time on demand.

 

(e)          Interest on each Loan shall be payable in the currency in which each Loan was made.

 

2.15         Computation of Interest and Fees .

 

(a)          Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, (i) with respect to Eurocurrency Loans denominated in Sterling, the interest thereon shall be calculated on the basis of a 365- day year and (ii) with respect to ABR Loans, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed or, in any case where the practice in the relevant market differs, in accordance with that market practice. The Administrative Agent shall as soon as practicable notify the Borrower Representative and the relevant Lenders of each determination of a Eurocurrency Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Percentage shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower Representative and the relevant Lenders of the effective date and the amount of each such change in interest rate. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to an ABR Loan being converted from a Eurocurrency Loan, the date of conversion of such Eurocurrency Loan to such ABR Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to an ABR Loan being converted to a Eurocurrency Loan, the date of conversion of such ABR Loan to such Eurocurrency Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

 

(b)          Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower Representative, deliver to the Borrower Representative a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.14(a) .

 

(c)          For the purposes of the Interest Act (Canada), whenever any interest is calculated on the basis of a period of time other than a calendar year, the annual rate of interest to which each rate of interest determined pursuant to such calculation is equivalent is such rate as so determined multiplied by the actual number of days in the calendar year for which the annual rate is to be ascertained and divided by the number of days used in the basis for such determination.

 

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2.16         Inability to Determine Interest Rate; Illegality .

 

(a)          If prior to the first day of any Interest Period (i) the Administrative Agent or the Majority Facility Lenders in respect of the relevant Facility shall have determined (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurocurrency Rate for such Interest Period, or (ii) the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that the Eurocurrency Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower Representative and the relevant Lenders as soon as practicable thereafter. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Loans in the affected currency or currencies shall be suspended and (y) in the event of a determination described in the preceding sentence with respect to the Eurocurrency component of the ABR, the utilization of the Eurocurrency Rate component in determining the ABR shall be suspended, in each case until the Administrative Agent (upon the instruction of the Majority Facility Lenders) revokes such notice. Upon receipt of such notice, the Borrower Representative (on behalf of the Borrowers) may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of ABR Loans in the amount specified therein (or, in the case of a pending request for a Loan denominated in an Alternative Currency, the Borrower Representative and the Lenders may establish a mutually acceptable alternative rate).

 

(b)          Notwithstanding any other provision of this Agreement, if any Change in Law shall make it unlawful for any Lender to make or maintain any Eurocurrency Loan or to give effect to its obligations as contemplated hereby with respect to any Eurocurrency Loan, then, by written notice to the Borrower Representative and to the Administrative Agent:

 

(i)          any obligation of such Lender to make or continue Eurocurrency Loans in the affected currency or currencies or to convert ABR to Eurocurrency Loans shall be suspended and

 

(ii)         if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the ABR, the interest rate on which ABR Loans of such Lender, shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the ABR,

 

in each case of clauses (i) and (ii) until such Lender notifies the Administrative Agent and the Borrower Representative that the circumstances giving rise to such determination no longer exist.

 

Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, (I) if applicable and such Loans are denominated in Dollars, convert all of such Lender’s Eurocurrency Loans to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the ABR) or (II) if applicable and such Loans are denominated in an Alternative Currency, the interest rate with respect to such Loans shall be determined by an alternative rate mutually acceptable to the Borrowers and the Lenders, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Loans. In the event any Lender shall exercise its rights under paragraphs (i) or (ii) of this clause (b), all payments and prepayments of principal that would otherwise have been applied to repay the Eurocurrency Loans that would have been made by such Lender or the converted Eurocurrency Loans of such Lender shall instead be applied to repay the ABR Loans (if applicable) made by such Lender in lieu of, or resulting from the conversion of, such Eurocurrency Loans. For purposes of this clause (b), a notice to the Borrower Representative by any Lender shall be effective as to each Eurocurrency Loan made by such Lender, if lawful, on the last day of the Interest Period then applicable to such Eurocurrency Loan; in all other cases, such notice shall be effective on the date of receipt by the Borrower Representative.

 

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2.17         Pro Rata Treatment and Payments .

 

(a)          Each borrowing by the Borrowers from the Lenders hereunder, each payment by any Borrower on account of any Facility Fee and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Term Percentages, Incremental Term Percentages or Revolving Percentages, as the case may be, of the relevant Lenders.

 

(b)          Each payment (including each prepayment) on account of principal of and interest on the Term Loans shall be made pro   rata  to the Term Lenders according to the respective Outstanding Amount of the Term Loans then held by the Term Lenders. The amount of each optional prepayment of the Term Loans made pursuant to Section 2.10 shall be applied as directed by the Borrower Representative in the notice described in Section 2.10 and, if no direction is given by the Borrower, in the direct order of maturity. The amount of each mandatory prepayment of the Term Loans pursuant to Section 2.11 (other than any such prepayment pursuant to Section 2.11(b) ) shall be applied as directed by the Borrower Representative in the notice described in Section 2.11 and, if no direction is given by the Borrower Representative, in the direct order of maturity. The amount of each mandatory prepayment of the Term Loans pursuant to Section 2.11(b) shall be applied in the direct order of maturity. Each payment (including each prepayment) by the Revolving Borrowers on account of principal of and interest on the Revolving Loans shall be made pro   rata to the Revolving Lenders according to the respective Outstanding Amount of the Revolving Loans then held by the Revolving Lenders.

 

(c)          Each payment or prepayment of the principal of, and interest on, any Loans shall be made in the relevant currency in which such Loans are denominated (even if the applicable Borrower is required to convert currency to do so). All payments (including prepayments) to be made by the Borrowers hereunder and denominated in Dollars, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 10:00 a.m. (New York City time) on the due date thereof to the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010, for the account of the Lenders, in Dollars and in immediately available funds. All payments (including prepayments) to be made by the Borrowers hereunder and denominated in an Alternative Currency, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 8:00 a.m. (New York City time) on the due date thereof to the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010, for the account of the Lenders, in the applicable Alternative Currency and in immediately available funds. If, for any reason, any Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, such Borrower shall make such payment in Dollars in the Dollar Amount of the Alternative Currency payment amount. Any payments received after such time shall be deemed to be received on the next Business Day at the Administrative Agent’s sole discretion. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. Except as otherwise provided hereunder, if any payment hereunder (other than payments on the Eurocurrency Loans) becomes due and payable on a day other than a Business Day, such payment shall be required on the immediately preceding Business Day. If any payment on a Eurocurrency Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

 

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(d)          Unless the Administrative Agent shall have been notified in writing by any Lender prior to the time of any Borrowing that such Lender will not make the amount that would constitute its share of such Borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor (a “ Funding Default ”), such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Overnight Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrowers. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

 

(e)          Unless the Administrative Agent shall have been notified in writing by the Borrower Representative prior to the date of any payment due to be made by the Borrowers hereunder that the Borrowers will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrowers are making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro   rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrowers within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily Overnight Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrowers.

 

2.18         Requirements of Law .

 

(a)          Subject to clause (c) of this Section 2.18 , if any Change in Law shall (i) subject any Lender to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Application or any Eurocurrency Loan made by it, or change the basis of Taxation of payments to such Lender in respect thereof (except for (x) any Non-Excluded Taxes or Other Taxes (each of which is provided for in Section 2.19 ), (y) any Taxes described in clauses (i) through (vii) of the second sentence of Section 2.19(a) and (z) any Taxes which would have been compensated for under Section 2.19(a) , Section 2.19(f) or Section 2.19(g) but were not so compensated because an exclusion in Section 2.19(b) , Section 2.19(c) , Section 2.19(d) , Section 2.19(e) or Section 2.19(h) applied), (ii) impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurocurrency Rate or (iii) impose on such Lender any other condition, and the result of any of the foregoing is to increase the cost to such Lender by an amount that such Lender reasonably deems to be material, of making, converting into, continuing or maintaining Eurocurrency Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrowers shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower Representative (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

 

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(b)          Subject to clause (c) of this Section 2.18 , if any Lender shall have determined that compliance by such Lender (or any corporation controlling such Lender) with any Change in Law regarding capital adequacy or liquidity shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under or in respect of any Loans or Letters of Credit to a level below that which such Lender or such corporation could have achieved but for such Change in Law (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy or liquidity) by an amount reasonably deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower Representative (with a copy to the Administrative Agent) of a written request therefor (setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.18(b) ), the Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

 

(c)          Notwithstanding anything to the contrary in this Agreement (including clauses (a) and (b) above), reimbursement pursuant to this Section 2.18 for (A) increased costs arising from any market disruption (i) shall be limited to circumstances generally affecting the banking market and (ii) may only be requested by Lenders representing the Majority Facility Lenders with respect to the applicable Facility and (B) increased costs because of any Change in Law resulting from clause (i) or (ii) of the proviso to the definition of “Change in Law” may only be requested by a Lender imposing such increased costs on borrowers similarly situated to the Borrowers under syndicated credit facilities comparable to those provided hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower Representative (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The Borrowers shall pay such Lender the additional amount shown as due on any such certificate promptly after, and in any event within, 10 Business Days of, receipt thereof. Notwithstanding anything to the contrary in this Section, the Borrowers shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more than nine months prior to the date that such Lender notifies the Borrower Representative of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrowers pursuant to this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

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2.19         Taxes .

 

(a)          Except where required under applicable law, all payments made by the Loan Parties under any Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, duties, charges, fees, deductions or withholdings, including any penalties, interest and additional amounts with respect thereto, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (collectively, “ Taxes ”). Subject to Section 2.19(b) , Section 2.19(c) , Section 2.19(d) , Section 2.19(e) and Section 2.19(h) below, if any applicable law requires any Taxes, excluding (i) Taxes imposed on or measured by net income and franchise Taxes (which franchise Taxes are imposed in lieu of net income Taxes) imposed on or with respect to the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document), (ii) branch profits Taxes imposed on the Administrative Agent or any Lender by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (i) above, (iii) United States withholding Taxes to the extent imposed pursuant to a Requirement of Law (or official interpretation or administration thereof) in effect at the time the relevant Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) would have been entitled at the time of designation of a new lending office (or assignment, if any) to receive additional amounts from the Borrowers with respect to such Taxes pursuant to this clause (a), (iv) Taxes that are attributable to a Lender’s failure to comply with the requirements of clauses (j), (k), (l), (o), (q) or (u) of this Section 2.19 , (v) Taxes imposed by sections 1471 through 1474 of the Code as in existence on the Closing Date (and any amended or successor versions of such provisions that are substantively comparable and not materially more onerous to comply with), any current or future U.S. treasury regulations thereunder and official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and fiscal, tax or regulatory legislation, rules or official practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and U.S. treasury regulations thereunder (“ FATCA ”), (vi) any Bank Levy and (vii) any withholding taxes applicable pursuant to the Luxembourg law of December 23, 2005 (such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings, including any penalties, interest, and additional amounts with respect thereto, the “ Non-Excluded Taxes ”), or Other Taxes to be withheld from any amounts payable by the Loan Parties to the Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after making all required withholdings in respect of Non-Excluded Taxes and Other Taxes) an amount equal to the sum it would have received had no such withholding been made. Within 30 days of a Loan Party making a payment subject to any deduction or withholding as mentioned in this Section 2.19(a) , the Loan Party making such payment shall deliver to the Administrative Agent as agent for the relevant Lender or Lenders evidence reasonably satisfactory to that Lender that the relevant deduction or withholding has been made and (as applicable) any appropriate payment has been made to the relevant taxing authority.

 

(b)          A payment by a German Borrower shall not be increased pursuant to Section 2.19(a ) by reason of a withholding or deduction for, or on account of, Taxes imposed by Germany if on the date on which the payment falls due (i) the payment could have been made to the Lender without a withholding or deduction if the Lender had been a German Qualifying Lender, but on that date that Lender is not or has ceased to be a German Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or German Treaty, or any published practice or published concession of any relevant taxing authority or (ii) the relevant Lender is a German Treaty Lender and the Loan Party making the payment is able to demonstrate that the payment could have been made to the Lender, without the withholding or deduction had that Lender complied with its obligations under Section 2.19(k) below.

 

(c)          A payment by a Loan Party (other than in respect of an amount due in respect of a Term Loan) shall not be increased pursuant to Section 2.19(a ) by reason of a UK Tax Deduction if on the date on which the payment falls due:

 

(i)          the payment could have been made to the relevant Lender without a UK Tax Deduction if the Lender had been a UK Qualifying Lender, but on that date that Lender is not or has ceased to be a UK Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority;

 

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(ii)         the relevant Lender is a UK Qualifying Lender solely by virtue of clause (a)(ii) of the definition of UK Qualifying Lender and (A) an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “ Direction ”) under section 931 of the ITA 2007 which relates to the payment and that Lender has received from the UK Borrower a certified copy of that Direction and (B) the payment could have been made to the Lender without any UK Tax Deduction if that Direction had not been made;

 

(iii)        the relevant Lender is a UK Qualifying Lender solely by virtue of clause (a)(ii) of the definition of UK Qualifying Lender and (A) the relevant Lender has not given a UK Tax Confirmation to the UK Borrower and (B) the payment could have been made to the relevant Lender without any UK Tax Deduction if the Lender had given a UK Tax Confirmation to the UK Borrower, on the basis that the UK Tax Confirmation would have enabled the UK Borrower to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA 2007; or

 

(iv)        the relevant Lender is a UK Treaty Lender and the Loan Party making the payment is able to demonstrate that the payment could have been made to the Lender without the UK Tax Deduction had that Lender complied with its obligations under Section 2.19(k) (subject to Section 2.19(l) ) or Section 2.19(m) as applicable.

 

(d)          A payment by a Loan Party in respect of an amount due from a Spanish Borrower shall not be increased pursuant to Section 2.19(a) by reason of a Spanish Tax Deduction if on the date on which the payment falls due:

 

(i)          the payment could have been made to the relevant Lender without a Spanish Tax Deduction if the Lender had been a Spanish Qualifying Lender, but on that date that Lender is not or has ceased to be a Spanish Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration or application of) any law or Spanish Treaty, or any published practice or published concession of any relevant taxing authority;

 

(ii)         the relevant Lender is a Spanish Qualifying Lender under paragraphs (d) or (e) of the definition of “Spanish Qualifying Lender” and the payment could have been made to that Lender without a Spanish Tax Deduction had the relevant Lender complied with its obligations under Section 2.19(k) or 2.19(u), as applicable.

 

(e)          A payment by a Luxembourg Borrower shall not be increased pursuant to Section 2.19(a ) by reason of a withholding or deduction for, or on account of, Taxes imposed by Luxembourg if on the date on which the payment falls due (i) the payment could have been made to the Lender without a withholding or deduction if the Lender had been a Luxembourg Qualifying Lender, but on that date that Lender is not or has ceased to be a Luxembourg Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Luxembourg Treaty, or any published practice or published concession of any relevant taxing authority or (ii) the relevant Lender is a Luxembourg Treaty Lender and the Loan Party making the payment is able to demonstrate that the payment could have been made to the Lender, without the withholding or deduction had that Lender complied with its obligations under Section 2.19(k) below.

 

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(f)          The Borrowers shall indemnify the Administrative Agent and each Lender within 10 Business Days after written demand therefor (which written demand shall be made no later than 180 days after the earlier of (1) the date on which the Administrative Agent or the applicable Lender, as the case may be, received written demand for payment of the applicable Non-Excluded Taxes or Other Taxes from the relevant Governmental Authority or (2) the date on which the Administrative Agent or the applicable Lender, as the case may be, paid the applicable Non-Excluded Taxes or Other Taxes; provided, that failure or delay on the part of the Administrative Agent or the applicable Lender, as the case may be, to make such written demand shall not constitute a waiver of the right of the Administrative Agent or the applicable Lender, as the case may be, to demand indemnity and reimbursement for such Non-Excluded Taxes or Other Taxes, except to the extent that such failure or delay results in prejudice to the Borrowers) for the full amount of any Non-Excluded Taxes or Other Taxes imposed on or with respect to any payment made by any Loan Party under any Loan Document (including Non-Excluded Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.19 paid by such Person and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, but excluding Non-Excluded Taxes to the extent compensated under Section 2.19(a) or Taxes to the extent that such Taxes would have been compensated for by Section 2.19(a) or Section 2.19(g) but were not so compensated because one of the exclusions in Section 2.19(b) , Section 2.19(c) , Section 2.19(d) , Section 2.19(e) , Section 2.19(g) or Section 2.19(h) applied). A certificate stating the amount of such payment or liability and setting forth in reasonable detail the calculation thereof delivered to the Borrower Representative by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error. Statements payable by any Borrower pursuant to this Section 2.19 shall be submitted to the Borrower Representative at the address specified under Section 11.2 .

 

(g)          In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law, except for any Luxembourg Taxes payable due to the registration of a Loan Document with the Administration de l’Enregistrement et des Domaines in Luxembourg or in connection with any registration of a Loan Document for the purposes of any court proceedings before a Luxembourg court or any presentation before a public authority in Luxembourg ( autorité constituée ), except in circumstances where:

 

(i)          the registration or presentation of a Loan Document is required or ordered by the relevant Luxembourg court or public authority in connection with any proceedings or matters pending before such court or authority; or

 

(ii)         the registration or presentation of a Loan Document is necessary for the exercise of the rights under such Loan Document and the protection, preservation or maintenance of such rights; or

 

(iii)        the registration or presentation of a Loan Document is mandatorily required by law.

 

(h)          A payment shall not be required to be made by a Loan Party pursuant to Section 2.19(a) , Section 2.19(f) or Section 2.19(g) for, or on account of, Other Taxes where (i) such Other Taxes are imposed with respect to an assignment or transfer of any Lender’s rights or any participation or sub-contract by a Lender (other than in the course of primary syndication, pursuant to Section 2.23 (other than Section 2.23(c) ) or after a Default), or (ii) such Other Taxes derive from the voluntary registration of a Loan Document by or on behalf of the Administrative Agent or any Lender where such registration is not required to maintain, preserve, establish or enforce the rights of the Administrative Agent or that Lender under a Loan Document.

 

(i)          Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrowers, as promptly as possible thereafter the Borrowers shall send to the Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, (A) where that payment is in connection with a UK Tax Deduction, a statement under section 975 of the ITA 2007 or other evidence reasonably satisfactory to the Administrative Agent that the UK Tax Deduction has been made or (as applicable) any appropriate payment paid to HM Revenue & Customs, or (B) in any other case, a certified copy of an original official receipt received by the Borrowers showing payment thereof, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

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(j)          Each Lender (or Assignee) that is not a “United States person” as defined in Section 7701(a)(30) of the Code (a “ Non-U.S. Lender ”) shall deliver to the Borrower Representative (on behalf of the applicable Borrowers) and the Administrative Agent two copies of either U.S. Internal Revenue Service Form W-8BEN, Form W-8BEN-E or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit C-1 and a Form W-8BEN, Form W-8BEN-E, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrowers under this Agreement and the other Loan Documents; provided that, in the case of a Non-U.S. Lender that is not the beneficial owner, such Non-U.S. Lender shall deliver to the Borrower Representative (on behalf of the applicable Borrowers) and the Administrative Agent two executed copies of U.S. Internal Revenue Service Form W-8IMY, accompanied by Form W-8ECI, Form W-8BEN, Form W-8BEN-E, a statement substantially in the form of Exhibit C-2 or Exhibit C-3 , Form W-9, and/or other certification documents from each beneficial owner, as applicable (in each case, or any subsequent versions thereof or successors thereto); provided , further , that if the Non-U.S. Lender is a partnership and one or more direct or indirect partners of such Non-U.S. Lender are claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, such Non-U.S. Lender may provide a statement substantially in the form of Exhibit C-4 on behalf of each such direct or indirect partner). Any Lender (or Assignee) that is not a Non-U.S. Lender shall deliver to the Borrower Representative (on behalf of the applicable Borrowers) and the Administrative Agent two copies of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Person claiming complete exemption from backup withholding on all payments by the Borrowers under this Agreement and the other Loan Documents. The Administrative Agent shall deliver to the Borrower Representative (on behalf of the applicable Borrowers) with respect to any Revolving Loan made to a US Loan Party, and with respect to any Term Loan, a duly executed U.S. branch withholding certificate on U.S. Internal Revenue Service Form W-8IMY evidencing its agreement with the Borrowers to be treated as a United States person with respect to payments on such Loans for U.S. federal income tax purposes. The forms and certification referenced in the previous three sentences (the “ Forms ”) shall be delivered by the Administrative Agent and each Lender on or before the date it becomes a party to this Agreement. In addition, the Administrative Agent and each Lender shall deliver the Forms promptly upon the obsolescence or invalidity of any Forms previously delivered by the Administrative Agent and such Lender and upon the written request of the Borrower Representative or the Administrative Agent. The Administrative Agent and each Lender shall promptly notify the Borrower Representative (on behalf of the applicable Borrowers) at any time it determines that it is no longer in a position to provide any previously delivered Form to the Borrower Representative (or any other form or certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph (j), the Administrative Agent and each Lender shall not be required to deliver any Form pursuant to this paragraph (j) that the Administrative Agent and such Lender is not legally able to deliver.

 

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(k)          The Administrative Agent and each Lender that is entitled to an exemption from or reduction of withholding tax (other than U.S. federal withholding Tax) under the law of the jurisdiction in which a Loan Party is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under any Loan Document (including, for the avoidance of doubt, a Luxembourg Treaty Lender, a German Treaty Lender, a Spanish Treaty Lender and a UK Treaty Lender) shall (subject, in the case of a UK Treaty Lender with respect to an exemption from or reduction of a UK Tax Deduction, to Section 2.19(l) ) (i) cooperate in completing any procedural formalities necessary for a Loan Party making a payment to that Lender or the Administrative Agent to obtain authorization to make that payment without a withholding or deduction for, or on account of, Tax, and (ii) deliver to the Borrower Representative (on behalf of the applicable Borrowers) (with a copy to the Administrative Agent), at the time or times reasonably requested by the Borrower Representative (on behalf of the applicable Borrowers) or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law or any treaty as will permit such payments to be made without withholding or deduction for, or on account of, Tax or at a reduced rate, provided that the Administrative Agent or such Lender, as applicable, is legally entitled to complete such procedural formalities or complete, execute and deliver such documentation and in the Administrative Agent’s or such Lender’s judgment, as applicable, such completion of such procedural formalities or such completion, execution or submission of such documentation would not materially prejudice the legal or commercial position of the Administrative Agent and such Lender.

 

(l)          A UK Treaty Lender which becomes (i) a party to this Agreement on the day on which this Agreement is entered into that (x) holds a passport under the HM Revenue & Customs DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1.1A ; or (ii) a Lender hereunder after the day on which this Agreement is entered into that (x) holds a passport under the HM Revenue & Customs DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall provide its scheme reference number and its jurisdiction of tax residence in the relevant Assignment or Assumption, Refinancing Amendment or Incremental Amendment pursuant to which such Lender becomes a party hereto or otherwise in writing to the UK Borrower within 15 days of it become a party to this Agreement, and having done so, such UK Treaty Lender shall have satisfied its obligation under clause (k) above in respect of a UK Tax Deduction.

 

(m)          If a UK Treaty Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with clause (l) above and

 

(i)          a UK Borrower making a payment to that Lender has not made a Borrower DTTP Filing in respect of that Lender; or

 

(ii)         a UK Borrower making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but:

 

(1)         such Borrower DTTP Filing has been rejected by HM Revenue & Customs; or

 

(2)         HM Revenue & Customs has not given that UK Borrower authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the Borrower DTTP Filing,

 

and in each case, the UK Borrower has notified that UK Treaty Lender in writing of either (1) or (2) above, then such UK Treaty Lender and the UK Borrower shall co-operate in completing any additional procedural formalities necessary for that UK Borrower to obtain authorization to make that payment without a UK Tax Deduction.

 

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(iii)        If a UK Treaty Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with clause (l) above, no Loan Party shall make a Borrower DTTP Filing or file any other form relating to the HM Revenue & Custom DT Treaty Passport scheme in respect of that UK Treaty Lender's Commitment(s) or its participation in any Loan unless the UK Treaty Lender otherwise agrees.

 

(iv)        A Loan Party shall, promptly on making a Borrower DTTP Filing, deliver a copy of such Borrower DTTP Filing to the Administrative Agent for delivery to the relevant UK Treaty Lender.

 

(v)         A UK Non-Bank Lender which becomes a party to this Agreement on the day on which this Agreement is entered into gives a UK Tax Confirmation to the UK Borrower by entering into this Agreement. A UK Non-Bank Lender shall promptly notify the UK Borrower and the Administrative Agent if there is any change in the position from that set out in the UK Tax Confirmation.

 

(n)          If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund (whether in the form of cash or as a credit against, or as a reduction of, a tax liability) of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the Loan Parties or with respect to which the Loan Parties have paid additional amounts pursuant to this Section 2.19 , it shall pay over such refund to the relevant Loan Party (but only to the extent of indemnity payments made, or additional amounts paid, by the Loan Parties under this Section 2.19 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the relevant Loan Party, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Loan Parties ( plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (n), in no event will the Administrative Agent or any Lender be required to pay any amount to the Loan Parties pursuant to this paragraph (n) the payment of which would place the Administrative Agent or such Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph (n) shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower Representative or any other Person.

 

(o)          If a payment made to the Administrative Agent or a Lender under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if the Administrative Agent or such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Administrative Agent and such Lender shall deliver to the Borrower Representative (on behalf of the applicable Borrowers) and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Representative (on behalf of the applicable Borrowers) or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Representative (on behalf of the applicable Borrowers) or the Administrative Agent as may be necessary for any Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that the Administrative Agent or such Lender has complied with the Administrative Agent’s or such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph (o), “FATCA” shall include any amendments made to FATCA after the Closing Date.

 

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(p)          Each Lender which becomes a party to this Agreement after the Closing Date (a “ New Lender ”) shall indicate in the Assignment and Assumption, Refinancing Amendment or Incremental Amendment pursuant to which such Lender will became a party hereto, which of the following categories it falls in: (i) in relation to a Luxembourg Borrower (a) not a Luxembourg Qualifying Lender, (b) a Luxembourg Qualifying Lender (other than a Luxembourg Treaty Lender), or (c) a Luxembourg Treaty Lender; (ii) in relation to a UK Borrower (a) not a UK Qualifying Lender, (b) a UK Qualifying Lender (other than a UK Treaty Lender), or (c) a UK Treaty Lender; (iii) in relation to a German Borrower (a) not a German Qualifying Lender, (b) a German Qualifying Lender (other than a German Treaty Lender), or (c) a German Treaty Lender; and (iv) in relation to a Spanish Borrower (a) not a Spanish Qualifying Lender, (b) a Spanish Qualifying Lender (other than a Spanish Treaty Lender or an EU Lender), (c) an EU Lender; or (d) a Spanish Treaty Lender. If a New Lender fails to indicate its status in accordance with this Section 2.19(p) then such New Lender shall be treated for the purposes of this Agreement as if it was not a Luxembourg Qualifying Lender, not a UK Qualifying Lender, not a German Qualifying Lender or not at Spanish Qualifying Lender, as applicable, until such time as it notifies the Administrative Agent which category applies (and the Administrative Agent upon receipt of such notification, shall inform the Borrower Representative). For the avoidance of doubt, an Assignment and Assumption, Refinancing Amendment or Incremental Amendment shall not be invalidated by any failure of a Lender to comply with this Section 2.19(p).

 

(q)          Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Representative (on behalf of the applicable Borrowers) and the Administrative Agent in writing of its legal inability to do so.

 

(r)          Without limiting any other provisions of this Agreement, each Lender that would not qualify for a complete exemption from withholding Taxes with respect to payments made under any Loan Document at the time such Lender becomes a party to this Agreement, shall consider in good faith, but not be required, to take actions, including assigning any of its Commitments and Loans to an affiliate of such Lender, so as to reasonably limit any obligations of the Loan Parties under this Section 2.19 .

 

(s)          The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(t)           VAT .

 

(i)          All amounts expressed to be payable under any Loan Document by any party to this Agreement to a Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply and, accordingly, subject to clause (ii) below, if VAT is or becomes chargeable on any supply made by any Lender to any party to this Agreement under any Loan Document and such Lender is required to account to the relevant tax authority for the VAT, that party must pay to such Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Lender must promptly provide an appropriate VAT invoice to that party).

 

(ii)         If VAT is or becomes chargeable on any supply made by any Lender (the “ Supplier ”) to any other Lender (the “ Recipient ”) under any Loan Document, and any party other than the Recipient (the “ Relevant Party ”) is required by the terms of any Loan Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

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(1)         (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this clause (1) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

(2)         (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

(iii)        Where any Loan Document requires any party to this Agreement to reimburse or indemnify a Lender for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Lender for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

(iv)        Any reference in this Section 2.19(t) to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994 or in the relevant legislation of any other jurisdiction having implemented Council Directive 2006/112/EC on the common system of value added tax).

 

(v)         In relation to any supply made by a Lender to any party to this Agreement under any Loan Document, if reasonably requested by such Lender, that party must promptly provide such Lender with details of that party's VAT registration and such other information as is reasonably requested in connection with such Lender's VAT reporting requirements in relation to such supply.

 

(u)          Each (i) Spanish Qualifying Lender under paragraphs (d) or (e) of the definition of “Spanish Qualifying Lender” and (ii) Lender who is not resident for tax purposes in Spain but is entitled to the benefits of a Spanish Treaty providing for a reduction of a Spanish Tax Deduction applicable on interest shall, as soon as reasonably practicable after the date on which it becomes a Party to this Agreement, and in any event before any payment is due or made, whichever comes first, deliver to the Spanish Borrower through the Administrative Agent a certificate of tax residence (or the specific form or documentation required under the relevant Spanish Treaty) duly issued by the competent tax authorities of that Lender’s jurisdiction of tax residence evidencing such Lender as resident for tax purposes in that jurisdiction and, if a Spanish Treaty Lender or a Lender entitled to the benefits of a Spanish Treaty, evidencing such Lender as resident for tax purposes in that jurisdiction and declaring that it is entitled to the benefits of the relevant Spanish Treaty. Each such Lender shall be required to deliver a new certificate of tax residence each time the existing certificate expires in accordance with the Spanish laws and regulations.

 

For purposes of this Section 2.19 , the term Lender shall include any Issuing Lender or Swingline Lender.

 

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2.20         [Reserved] .

 

2.21         Indemnity . The Borrowers agree to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) default by any Borrower in making a borrowing of, conversion into or continuation of Eurocurrency Loans after the Borrower Representative has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrowers in making any prepayment of or conversion from Eurocurrency Loans after the Borrower Representative has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurocurrency Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, reduced, converted or continued, for the period from the date of such prepayment or of such failure to borrow, reduce, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, reduce, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest or other return for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurocurrency market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower Representative by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.22         Change of Lending Office .

 

(a)          Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Sections 2.18 or  2.19 with respect to such Lender, it will, if requested by the Borrower Representative, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided , further , that nothing in this Section shall affect or postpone any of the obligations of the Borrowers or the rights of any Lender pursuant to Sections 2.18 or  2.19 .

 

(b)          Subject to clause (a) above, and without prejudice to the rights and obligations (but subject to the terms and requirements) in Section 2.19 , each Borrower agrees that each Lender may, at its option, make any Loan available to any Borrower by causing any foreign or domestic branch or Affiliate of such Lender to make such Loan, and that any exercise of such option shall not shall affect or postpone any of the obligations of the Borrowers or the rights of any Lender pursuant to this Agreement (except to the extent that, for the avoidance of doubt, the exercise of such option changes such Lender’s status as a UK Qualifying Lender, a German Qualifying Lender, a Spanish Qualifying Lender or a Luxembourg Qualifying Lender for the purposes of Section 2.19 ).

 

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2.23         Replacement of Lenders . The Borrowers shall be permitted to replace any Lender (a) where a Loan Party is obligated to pay additional amounts or indemnity payments under Section 2.19 , (b) that requests reimbursement for amounts owing pursuant to Sections 2.16 or 2.18 , (c) that becomes a Defaulting Lender or otherwise defaults in its obligation to make Loans hereunder or (d) that has not consented to a proposed change, waiver, discharge or termination of the provisions of this Agreement as contemplated by Section 11.1 that requires the consent of all Lenders or all Lenders under a particular Facility or each Lender affected thereby and which has been approved by the Required Lenders as provided in Section 11.1 , with a Lender or Eligible Assignee; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) in the case of clause (a) or (b), prior to any such replacement, such Lender shall have taken no action under Section 2.22 sufficient to eliminate the continued need for payment of amounts owing pursuant to Sections 2.16 , 2.18 or  2.19 , (iii) the replacement financial institution or other Eligible Assignee shall purchase all Loans and other amounts (or, in the case of clause (d) as it relates to provisions affecting a particular Facility, Loans or other amounts owing under such Facility) owing to such replaced Lender on or prior to the date of replacement, (iv) the Borrowers shall be liable to such replaced Lender under Section 2.21 if any Eurocurrency Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (v) the replacement financial institution or other Eligible Assignee, if not already a Lender, shall be reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender shall be deemed to have made such replacement in accordance with the provisions of Section 11.6 , (vii) until such time as such replacement shall be consummated, the Borrowers shall pay all additional amounts (if any) required pursuant to Sections 2.16 , 2.18 2.19(a) or 2.19(f) , as the case may be, and (viii) any such replacement shall not be deemed to be a waiver of any rights that the Borrowers, the Administrative Agent or any other Lender shall have against the replaced Lender. Upon any such assignment, such replaced Lender shall no longer constitute a “Lender” for purposes hereof (or, in the case of clause (d) as it relates to provisions affecting a particular Facility, a Lender under such Facility); provided that any rights of such replaced Lender to indemnification hereunder shall survive as to such replaced Lender. Each Lender, the Administrative Agent and the Borrowers agree that in connection with the replacement of a Lender and upon payment to such replaced Lender of all amounts required to be paid under this Section 2.23 , the Administrative Agent and the Borrowers shall be authorized, without the need for additional consent from such replaced Lender, to execute an Assignment and Assumption on behalf of such replaced Lender, and any such Assignment and Assumption so executed by the Administrative Agent or the Company Borrowers and, to the extent required under Section 11.6 , the Borrowers, the Swingline Lender and each Issuing Lender, shall be effective for purposes of this Section 2.23 and Section 11.6 . Notwithstanding anything to the contrary in this Section 2.23 , in the event that a Lender which holds Loans or Commitments under more than one Facility does not agree to a proposed amendment, supplement, modification, consent or waiver which requires the consent of all Lenders under a particular Facility, the Borrowers shall be permitted to replace the non-consenting Lender with respect to the affected Facility and may, but shall not be required to, replace such Lender with respect to any unaffected Facilities.

 

2.24         Notes . If so requested by any Lender by written notice to the Borrower Representative (with a copy to the Administrative Agent), the applicable Borrowers, other than a Spanish Borrower, shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 11.6 ) (promptly after the Borrower Representative’s receipt of such notice) a Note or Notes to evidence such Lender’s Loans. For the avoidance of doubt, the Spanish Borrowers shall not be obliged to execute and deliver any Note or Notes (including the Global Intercompany Note) under this Agreement.

 

2.25         Incremental Credit Extensions .

 

Subject to the terms of this Section 2.25 :

 

(a)          The Borrowers may, at any time or from time to time after the Closing Date, by notice from the Borrower Representative to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders) and the Person appointed by the Borrower Representative to arrange an Incremental Facility (such Person (who (i) may be the Administrative Agent, if it so agrees, or (ii) any other Person appointed by the Borrower Representative after consultation with the Administrative Agent; provided that such Person may not be an Affiliate of any Borrower), the “ Incremental Arranger ”), request one or more additional tranches of term loans and/or one or more increases to the amount of any Class of Term Loans then outstanding (the commitments thereof, the “ Incremental Term Commitments ”, the loans thereunder, the “ Incremental Term Loans ”, and a Lender making such loans, an “ Incremental Term Lender ”) and/or one or more additional tranches of revolving loans (the “ Additional/Replacement Revolving Commitments ”) and/or one or more increases in the amount of the Revolving Commitments of any Class (each such increase, a “ Revolving Commitment Increase ”, the loans thereunder and under any Additional/Replacement Revolving Commitments , the “ Incremental Revolving Loans ”, and a Lender making a commitment to provide such Incremental Revolving Loans, an “ Incremental Revolving Lender ”); provided that:

 

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(i)          after giving effect to any such Additional/Replacement Revolving Commitments, any such Revolving Commitment Increase and any such Incremental Term Loans, the aggregate amount of such Additional/Replacement Revolving Commitments, Revolving Commitment Increases and Incremental Term Loans shall not exceed an amount equal to the sum of (x) an unlimited amount at any time so long as the Total First Lien Net Leverage Ratio on a Pro Forma Basis (but without giving effect to the cash proceeds remaining on the balance sheet of such Incremental Term Loans or of any Incremental Revolving Loans incurred pursuant to such Revolving Commitment Increase or such Additional/Replacement Revolving Commitments) as of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered (calculated assuming that such Revolving Commitment Increase or Additional/Replacement Revolving Commitment is fully drawn throughout such period) does not exceed 4.90 to 1.00 (without giving effect to any contemporaneous borrowing under clauses (y) or (z) below), plus (y) the amount of all prior voluntary prepayments, loan buybacks and commitment reductions of Term Loans, Revolving Loans, Incremental Loans and Indebtedness incurred pursuant to Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations (in each case to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) less the aggregate principal amount of Indebtedness incurred under Section 7.2(b)(vi)(y) , plus (z) an amount equal to the greater of $300,000,000 and 75% of Consolidated EBITDA on a Pro Forma Basis based on the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been delivered (and after giving effect to any acquisition consummated concurrently therewith) less the aggregate principal amount of Indebtedness incurred under Section 7.2(b)(vi)(z) ( provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to the ratio test described in foregoing clause (x)); provided that, for the avoidance of doubt, if the applicable Borrower incurs Incremental Term Loans, Additional/Replacement Revolving Commitments or a Revolving Commitment Increase under clause (x) above on the same date that it incurs indebtedness under clauses (y) or (z) above, then the Total First Lien Net Leverage Ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of indebtedness under clauses (y) or (z) above. Unless the Borrower Representative elects otherwise, any Incremental Term Loans, Additional/Replacement Revolving Commitments or Revolving Commitment Increase shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above. The Borrower Representative may designate any Incremental Arranger of any Incremental Facility with such titles under the Incremental Facility as Borrower Representative may deem appropriate.

 

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(ii)         the Incremental Term Loans and Incremental Revolving Loans shall rank pari passu in right of payment (or be subordinated if agreed by the Lenders providing such Incremental Loans) and of security (or, to the extent that any portion of the Liens created by the Security Documents would be required under applicable law to be released, pari passu in right of payment and junior in right of security) with the other Loans and Commitments hereunder;

 

(iii)        other than customary Bridge Financings, the Incremental Term Loans shall not mature earlier than the Term Loan Maturity Date and the Incremental Revolving Loans shall not mature earlier than the Revolving Termination Date;

 

(iv)        other than customary Bridge Financings, the Incremental Term Loans shall have a Weighted Average Life to Maturity no shorter than the Weighted Average Life to Maturity of the Term Loans;

 

(v)         subject to clauses (iii) and (iv) above, (x) the interest rates (and, in the case of any Incremental Term Loan subject to clauses (iii) and (iv) above, the amortization schedule) applicable to any such Incremental Term Loans or Revolving Commitment Increase shall be determined by the Borrower Representative and the applicable Incremental Term Lenders or Incremental Revolving Lenders, as the case may be, and (y) any such Additional/Replacement Revolving Commitments or Revolving Commitment Increase shall not have amortization or scheduled mandatory commitment reductions (other than at the maturity thereof);

 

(vi)         no Default or Event of Default (except in connection with a Limited Condition Acquisition ) shall exist on the Incremental Facility Closing Date with respect to any Incremental Amendment entered into in connection therewith (and after giving effect to any Incremental Term Loans and/or Incremental Revolving Loans made thereunder);

 

(vii)       with respect to any Incremental Term Loans, if the all-in-yield (whether in the form of interest rate margins, including interest rate floors (subject to clause (2) of the proviso in this clause (vii)), upfront fees or OID (with any OID being equated to interest margin based on an assumed four-year life to maturity for purposes of determining any increase to the Applicable Margin under the Term Facility or Revolving Facility, as the case may be)) with respect to the Incremental Term Loans made thereunder (as determined by the Borrower Representative and the applicable Incremental Term Lenders) exceeds the all-in yield (after giving effect to interest rate margins (including the interest rate floors (subject to clause (2) of the proviso in this clause (vii)) and OID (equated to interest based on an assumed four-year life to maturity or, if shorter, the remaining life to maturity thereof)) with respect to the Initial Term Loans that are denominated in the same currency as such Incremental Term Loans, as the case may be, after giving effect to any increase or repricing thereof that has theretofore become effective (it being understood that if any such repricing was effected as a refinancing tranche, the OID applicable to the refinanced loans shall be taken into account), by more than 50 basis points (the amount of such excess above 50 basis points being referred to herein as the “ Incremental Yield Differential ”), then, upon the effectiveness of such Incremental Amendment, the Applicable Margin then in effect for such Initial Term Loans denominated in the same currency shall automatically be increased by the Incremental Yield Differential; provided , (1) if the Incremental Term Loans include an interest-rate floor greater than the interest rate floor applicable to such Term Loans, the differential between such interest rate floors shall be equated to the interest rate margins for purposes of determining whether an increase to the Applicable Margin shall be required, but only to the extent an increase in the interest rate floor applicable to such Term Loans would cause an increase in the Applicable Margin, and in such case the interest rate floor (but not the Applicable Margin) applicable to such Term Loans shall be increased to the extent of such differential between interest rate floors and (2) any Incremental Term Loans that constitute fixed-rate Indebtedness shall be swapped to a floating rate on a customary matched-maturity basis;

 

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(viii)      the Incremental Term Loans, Additional/Replacement Revolving Commitments and Revolving Commitment Increases may be denominated in Dollars, any Applicable Currency and any other currency acceptable to the Incremental Arranger and the applicable Incremental Term Lenders or Incremental Revolving Lenders, as the case may be;

 

(ix)         no Incremental Term Loans, Additional/Replacement Revolving Commitments and Revolving Commitment Increases may be secured by any assets other than the Collateral and no Incremental Term Loans and Revolving Commitment Increases shall be guaranteed by any person other than the Guarantors; and

 

(x)          no Additional/Replacement Revolving Commitments may be provided by an Affiliate of UK Holdco (or guaranteed by an Affiliate of UK Holdco).

 

(b)          Except as set forth in Section 2.25(a) and Section 2.25(c) , the Incremental Term Loans and Additional/Replacement Revolving Commitments shall be treated substantially the same as the Term Loans and the Revolving Loans, including with respect to mandatory and voluntary prepayments (unless the applicable Incremental Term Lenders and/or Incremental Revolving Lenders agree to a less than pro rata share of such prepayments) and Guarantees. The Revolving Commitment Increases shall be treated substantially the same as the Revolving Commitments being increased, and shall be considered to be part of the Class of Revolving Facility being increased (it being understood that, if required to consummate the provision of Revolving Commitment Increases, the pricing, interest rate margins, rate floors and facility fees on the Class of Revolving Commitments being increased may be increased and additional upfront or similar fees may be payable to the lenders providing the Revolving Commitment Increase (without any requirement to pay such fees to any existing Revolving Lenders)). Each notice from the Borrower Representative to the Administrative Agent and the Incremental Arranger pursuant to Section 2.25(a) shall set forth the requested amount and proposed terms of the relevant Incremental Term Loans, Additional/Replacement Revolving Commitments or Revolving Commitment Increase.

 

(c)          Incremental Term Loans may be made, and Additional/Replacement Revolving Commitments and Revolving Commitment Increases may be provided, by any existing Lender or any Additional Lender ( provided that no existing Lender shall be obligated to provide any portion of any Incremental Facility), in each case on terms permitted in this Section 2.25 , and, to the extent not permitted in this Section 2.25 , all terms and documentation with respect to any Incremental Term Loan, Additional/Replacement Revolving Commitments or Revolving Commitment Increase which (i) are materially more restrictive on the Group Members, taken as a whole, than those with respect to the Term Loans and Revolving Commitments made on the Closing Date (but excluding (1) any terms applicable after the Latest Maturity Date and (2) terms that are more favorable to the existing Lenders than the comparable terms in the existing Loan Documents, in which case such terms may be incorporated into this Agreement (or any other applicable Loan Document) for the benefit of all existing Lenders (to the extent applicable to such Lender) without further amendment or consent requirements) or (ii) relate to provisions of a mechanical (including with respect to the Collateral and currency mechanics) or administrative nature, shall in each case be reasonably satisfactory to the Administrative Agent; provided that (A) (x) the Administrative Agent shall have consented (such consent not to be unreasonably withheld, conditioned or delayed) to such Lender’s making such Additional/Replacement Revolving Commitments or Revolving Commitment Increases if such consent would be required under Section 11.6(b) for an assignment of Loans or Revolving Commitments, as applicable, to such Lender or Additional Lender and each Issuing Lender and the Swingline Lender shall have consented (such consent not to be unreasonably withheld, conditioned or delayed) to such Lender’s making such Additional/Replacement Revolving Commitments or Revolving Commitment Increases and (B) the Administrative Agent shall not be required to execute, accept or acknowledge any Incremental Amendment (as defined below) or related documentation which contains (by express language or omission) any material deviation from the terms of this Section 2.25 . Commitments in respect of Incremental Term Loans, Additional/Replacement Revolving Commitments and Revolving Commitment Increases shall become Commitments (or in the case of a Revolving Commitment Increase to be provided by an existing Revolving Lender, an increase in such Lender’s applicable Revolving Commitment) under this Agreement pursuant to an amendment (an “ Incremental Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower Representative, each Lender agreeing to provide such Commitment, if any, and each Additional Lender, if any. The Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Incremental Arranger and the Borrower Representative, to effect the provisions of this Section (including any amendments that are not adverse to the interests of any Lender that are made to effectuate changes necessary to enable any Incremental Term Loans that are intended to be fungible with an existing Class of Term Loans to be fungible with such Term Loans, which shall include any amendments to Section 2.3 that do not reduce the ratable amortization received by each Lender thereunder). The effectiveness of any Incremental Amendment and the occurrence of any credit event (including the making (but not the conversion or continuation) of a Loan and the issuance, increase in the amount, or extension of a Letter of Credit thereunder) pursuant to such Incremental Facility Amendment shall be subject to the satisfaction of such conditions as the parties thereto shall agree (the effective date of any such Incremental Amendment, an “ Incremental Facility Closing Date ”). The Borrowers will use the proceeds of the Incremental Term Loans, Additional/Replacement Revolving Commitments and Revolving Commitment Increases for any purpose not prohibited by this Agreement. No Lender shall be obligated to provide any Incremental Term Loans, Additional/Replacement Revolving Commitments or Revolving Commitment Increases, unless it so agrees.

 

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(d)          Upon each Revolving Commitment Increase pursuant to this Section, each Revolving Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Revolving Commitment Increase (each a “ Revolving Commitment Increase Lender ”) in respect of such increase, and each such Revolving Commitment Increase Lender will automatically and without further act be deemed to have assumed, a portion of such Revolving Lender’s participations hereunder in outstanding Letters of Credit and Swingline Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (i) participations hereunder in Letters of Credit and (ii) participations hereunder in Swingline Loans held by each Revolving Lender (including each such Revolving Commitment Increase Lender) will equal the percentage of the aggregate Revolving Commitments of all Revolving Lenders represented by such Revolving Lender’s Revolving Commitment and if, on the date of such increase, there are any Revolving Loans outstanding, such Revolving Loans shall on or prior to the effectiveness of such Revolving Commitment Increase either be prepaid from the proceeds of additional Revolving Loans made hereunder or assigned to a Revolving Commitment Increase Lender (in each case, reflecting such increase in Revolving Commitments, such that Revolving Loans are held ratably in accordance with each Revolving Lender’s Pro Rata Share, after giving effect to such increase), which prepayment or assignment shall be accompanied by accrued interest on the Revolving Loans being prepaid and any costs incurred by any Lender in accordance with Section 2.21 (it being understood that the foregoing provisions shall apply only to an increase in the amount of the Revolving Commitments of any Class and not to any additional tranches of Revolving Loans). The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence. For the avoidance of doubt, this Section 2.25(d) shall apply only to such Class of Revolving Commitments that are the same Class as the Incremental Revolving Loans and shall not apply to any other Class of Revolving Loans.

 

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(e)          Notwithstanding anything to the contrary herein, this Section 2.25 shall supersede any provisions in Sections 2.17 or 11.1 to the contrary and Section 2.17 shall be deemed to be amended to implement any Incremental Amendment.

 

(f)          If the Incremental Arranger is not the Administrative Agent, the actions authorized to be taken by the Incremental Arranger herein shall be done in consultation with the Administrative Agent and, with respect to the preparation of any documentation necessary or appropriate to carry out the provisions of this Section 2.25 (including amendments to this Agreement and the other Loan Documents), any comments to such documentation reasonably requested by the Administrative Agent shall be reflected therein.

 

2.26         Refinancing Amendments .

 

(a)          At any time after the Closing Date, the Borrowers may obtain, from any Lender or any Additional Lender, Permitted Credit Agreement Refinancing Debt in respect of (1) all or any portion of the Term Loans then outstanding under this Agreement (which for purposes of this clause (1) will be deemed to include any then outstanding Other Term Loans) or (2) all or any portion of the Revolving Loans (or unused Revolving Commitments) under this Agreement (which for purposes of this clause (2) will be deemed to include any then outstanding Other Revolving Loans and Other Revolving Commitments), in the form of (x) Other Term Loans or Other Term Commitments or (y) Other Revolving Loans or Other Revolving Commitments, as the case may be, in each case pursuant to a Refinancing Amendment; provided that such Permitted Credit Agreement Refinancing Debt:

 

(i)          shall not be permitted to rank senior in right of payment or security to the other Loans and Commitments hereunder;

 

(ii)         will have such pricing, premiums, optional prepayment terms and financial covenants as may be agreed by the Borrower Representative and the Lenders thereof;

 

(iii)        (x) with respect to any Other Revolving Loans or Other Revolving Commitments, will have a maturity date that is not prior to the maturity date of Revolving Loans (or unused Revolving Commitments) being Refinanced and (y) other than Customary Bridge Financings, with respect to any Other Term Loans or Other Term Commitments, will have a maturity date that is not prior to the maturity date of, and will have a Weighted Average Life to Maturity that is not shorter than, the Term Loans being Refinanced;

 

(iv)        subject to clause (ii) above, will have terms and conditions that are either substantially identical to, or, taken as a whole, less favorable to the Lenders or Additional Lenders providing such Permitted Credit Agreement Refinancing Debt, the Refinanced Debt;

 

(v)         the proceeds of such Permitted Credit Agreement Refinancing Debt shall be applied, substantially concurrently with the incurrence thereof, to the prepayment of outstanding Term Loans or reduction of Revolving Commitments being so Refinanced (and repayment of Revolving Loans outstanding thereunder); and

 

(vi)        shall not be secured by any assets other than the Collateral and shall not be guaranteed by any person other than the Guarantors;

 

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provided , further , that the terms and conditions applicable to such Permitted Credit Agreement Refinancing Debt may provide for any additional or different financial or other covenants or other provisions that are agreed between the Borrower Representative and the Lenders thereof and applicable only during periods after the Latest Maturity Date that is in effect on the date such Permitted Credit Agreement Refinancing Debt is issued, incurred or obtained or added to the Loan Documents for the benefit of the applicable Lenders pursuant to a Refinancing Amendment. The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 5.2 (unless waived by the Lenders providing such Permitted Credit Agreement Refinancing Debt) and, to the extent reasonably requested by the Refinancing Arranger, receipt by the Refinancing Arranger of legal opinions, board resolutions, officers’ certificates and/or reaffirmation agreements consistent with those delivered on the Closing Date under Section 5.1 (other than changes to such legal opinions resulting from a change in law, change in facts or changes to counsel’s form of opinion). Any Refinancing Amendment may provide for the issuance of Letters of Credit for the account of the Borrower Representative or any Restricted Subsidiary, pursuant to any Other Revolving Commitments established thereby, in each case on terms substantially equivalent to the terms applicable to Letters of Credit under the Revolving Commitments subject to the approval of the Issuing Lenders.

 

(b)          The Refinancing Arranger shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment. Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Credit Agreement Refinancing Debt incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments subject thereto as Other Term Loans, Other Revolving Loans, Other Revolving Commitments and/or Other Term Commitments).

 

(c)          Any Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of Refinancing Arranger and the Borrower Representative, in consultation with the Administrative Agent, to effect the provisions of this Section. In addition, if so provided in the relevant Refinancing Amendment and with the consent of each Issuing Lender, participations in Letters of Credit expiring on or after the Revolving Termination Date shall be reallocated from Lenders holding Revolving Commitments to Lenders holding extended revolving commitments in accordance with the terms of such Refinancing Amendment; provided , however , that such participation interests shall, upon receipt thereof by the relevant Lenders holding revolving commitments, be deemed to be participation interests in respect of such revolving commitments and the terms of such participation interests (including the commission applicable thereto) shall be adjusted accordingly.

 

(d)          Notwithstanding anything to the contrary in this Agreement, this Section 2.26 shall supersede any provisions in Sections 2.17 or 11.1 to the contrary and the Borrowers and the Administrative Agent may amend Section 2.17 to implement any Refinancing Amendment.

 

(e)          If the Refinancing Arranger is not the Administrative Agent, the actions authorized to be taken by the Incremental Arranger herein shall be done in consultation with the Refinancing Agent and, with respect to the preparation of any documentation necessary or appropriate to carry out the provisions of this Section 2.26 (including amendments to this Agreement and the other Loan Documents), any comments to such documentation reasonably requested by the Administrative Agent shall be reflected therein.

 

2.27         Defaulting Lenders .

 

(a)           Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

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(i)           Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted in the definitions of “Required Lenders”, “Majority Revolving Lenders” and “Majority Term Lenders” and otherwise as set forth in Section 11.1 .

 

(ii)          Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 9 or otherwise, and including any amounts made available to the Administrative Agent by such Defaulting Lender pursuant to Section 11.8 ), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , in the case of a Revolving Lender, to the payment on a pro   rata basis of any amounts owing by such Defaulting Lender to the Issuing Lenders and the Swingline Lender hereunder; third , as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fourth , in the case of a Revolving Lender, if so determined by the Administrative Agent and the Borrowers, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans under this Agreement; fifth , to the payment of any amounts owing to the Lenders, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, such Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; sixth , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and seventh , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans or L/C Advances and such Lender is a Defaulting Lender under clause (a) of the definition thereof, such payment shall be applied solely to pay the relevant Loans of, and L/C Advances owed to, the relevant non-Defaulting Lenders on a pro   rata basis prior to being applied pursuant to Section 3.2(b) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to Section 3.2(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)         Certain Fees . Such Defaulting Lender shall not be entitled to receive or accrue Letter of Credit fees or any facility fee pursuant to Section 2.8(a) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender).

 

(iv)         Reallocation of Applicable Percentages to Reduce Fronting Exposure . During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, Refinance or fund participations in Swingline Loans and Letters of Credit pursuant to Sections 2.7 and 3.4 , respectively, the “Pro Rata Share” of each non-Defaulting Lender shall be computed without giving effect to the Revolving Commitment of such Defaulting Lender; provided that the aggregate obligation of each non-Defaulting Lender to acquire, Refinance or fund participations in Letters of Credit and Swingline Loans shall not exceed the positive difference, if any, of (1) the Revolving Commitment of such non-Defaulting Lender minus (2) the aggregate principal amount of the Revolving Loans of such Lender. In the event non-Defaulting Lenders’ obligations to acquire, Refinance or fund participations in Letters of Credit are increased as a result of a Defaulting Lender, then all Letter of Credit fees that would have been paid to such Defaulting Lender shall be paid to such non-Defaulting Lenders ratably in accordance with such increase of such non-Defaulting Lender’s obligations to acquire, Refinance or fund participations in Letters of Credit.

 

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(b)           Defaulting Lender Cure . If the Borrower Representative, the Administrative Agent, the Swingline Lender and each Issuing Lender agree in writing that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), such Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro   rata basis by the Lenders in accordance with their Pro Rata Share (without giving effect to Section 2.27(a)(iv) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties and subject to Section 11.16 , no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(c)           No Release . Subject to Section 11. 16, the provisions hereof attributable to Defaulting Lenders shall not release or excuse any Defaulting Lender from failure to perform its obligations hereunder.

 

2.28         Loan Modification Offers .

 

(a)          The Borrowers may, on one or more occasions, by written notice from the Borrower Representative to the Administrative Agent, make one or more offers (each, a “ Loan Modification Offer ”) to all the Lenders of one or more Classes on the same terms to each such Lender (each Class subject to such a Loan Modification Offer, a “ Specified Class ”) to make one or more Permitted Amendments pursuant to procedures reasonably specified by any Person that is not an Affiliate of any Borrower appointed by the Borrower Representative, after consultation (and, with respect to any documentation requiring execution of the Administrative Agent in its capacity as such, with the consent of the Administrative Agent) with the Administrative Agent, as agent under such Loan Modification Agreement (as defined below) (such Person (who may be the Administrative Agent, if it so agrees), the “ Loan Modification Agent ”) and reasonably acceptable to the Borrower Representative; provided that (i) any such offer shall be made by the Borrowers to all Lenders with Loans with a like maturity date (whether under one or more tranches) on a pro   rata basis (based on the aggregate Outstanding Amount of the applicable Loans), (ii) no Default or Event of Default shall have occurred and be continuing at the time of any such offer, (iii) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower Representative and (iv) in the case of any Permitted Amendment relating to the Revolving Commitments, each Issuing Lender and the Swingline Lender shall have approved such Permitted Amendment. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 5 Business Days nor more than 45 Business Days after the date of such notice, unless otherwise agreed to by the Loan Modification Agent); provided that, notwithstanding anything to the contrary, (x) assignments and participations of Specified Classes shall be governed by the same or, at the Borrower Representative’s discretion, more restrictive assignment and participation provisions than those set forth in Section 11.6 , and (y) no repayment of Specified Classes shall be permitted unless such repayment is accompanied by an at least pro   rata repayment of all earlier maturing Loans (including previously extended Loans) (or all earlier maturing Loans (including previously extended Loans) shall otherwise be or have been terminated and repaid in full). Permitted Amendments shall become effective only with respect to the Loans and Commitments of the Lenders of the Specified Class that accept the applicable Loan Modification Offer (such Lenders, the “ Accepting Lenders ”) and, in the case of any Accepting Lender, only with respect to such Lender’s Loans and Commitments of such Specified Class as to which such Lender’s acceptance has been made. No Lender shall have any obligation to accept any Loan Modification Offer.

 

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(b)          A Permitted Amendment shall be effected pursuant to an amendment to this Agreement (a “ Loan Modification Agreement ”) executed and delivered by the Borrower Representative and any other applicable Borrower, each applicable Accepting Lender and the Loan Modification Agent. The Loan Modification Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. No Loan Modification Agreement shall provide for any extension of any Specified Class in an aggregate principal amount that is less than 25% of such Specified Class then outstanding or committed, as the case may be. Each Loan Modification Agreement may, without the consent of any Lender other than the applicable Accepting Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Loan Modification Agent and the Borrower Representative, to give effect to the provisions of this Section 2.28 , including any amendments necessary to treat the applicable Loans and/or Commitments of the Accepting Lenders as a new “Class” of loans and/or commitments hereunder; provided that (x) no Loan Modification Agreement may provide for (i) any Specified Class to be secured by any Collateral or other assets of any Group Member that does not also secure the Loans and (ii) so long as any Loans are outstanding, any mandatory or voluntary prepayment provisions that do not also apply to the Loans on a pro   rata basis or greater than pro rata basis (or, with respect to prepayments made with proceeds of Permitted Credit Agreement Refinancing Debt, on a pro rata basis, less than pro rata basis or greater than pro rata basis), (y) in the case of any Loan Modification Offer relating to Revolving Commitments or Revolving Loans, except as otherwise agreed to by each Issuing Lender, (i) the allocation of the participation exposure with respect to any then-existing or subsequently issued Letter of Credit as between the commitments of such new “Class” and the remaining Revolving Commitments shall be made on a ratable basis as between the commitments of such new “Class” and the remaining Revolving Commitments and (ii) the Revolving Termination Date may not be extended without the prior written consent of each Issuing Lender and (z) the terms and conditions of the applicable Loans and/or Commitments of the Accepting Lenders (excluding pricing, fees, rate floors and optional prepayment or redemption terms) shall be substantially identical or (taken as a whole) shall be no more favorable to the Accepting Lenders than those applicable to the Specified Class (except for (1) financial covenants or other covenants or provisions applicable only to periods after the Latest Maturity Date at the time of such Loan Modification Offer, as may be agreed by the Borrower Representative and the Accepting Lenders, (2) any terms that are confirmed (or added) to the Loan Documents for the benefit of the lenders of the Specified Class pursuant to such Loan Modification Agreement and (3) pricing, premiums and fees).

 

(c)          Subject to Section 2.28(b) , the Borrowers may at their election specify as a condition (a “ Minimum Extension Condition ”) to consummating any such Loan Modification Agreement that a minimum amount (to be determined and specified in the relevant Loan Modification Offer in the Borrowers’ sole discretion and may be waived by the Borrowers) of Loans of any or all applicable Classes be extended.

 

(d)          Notwithstanding anything to the contrary in this Agreement, this Section 2.28 shall supersede any provisions in Sections 2.17 or 11.1 to the contrary and the Borrowers and the Administrative Agent may amend Section 2.17 to implement any Loan Modification Agreement.

 

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(e)          If the Loan Modification Agent is not the Administrative Agent, the actions authorized to be taken by the Loan Modification Agent herein shall be done in consultation with the Administrative Agent and, with respect to the preparation of any documentation necessary or appropriate to carry out the provisions of this Section 2.28 (including amendments to this Agreement and the other Loan Documents), any comments to such documentation reasonably requested by the Administrative Agent shall be reflected therein.

 

2.29         Currency Equivalents .

 

(a)          The Administrative Agent shall determine the Dollar Amount of each Revolving Loan denominated in an Alternative Currency and L/C Obligation in respect of Letters of Credit denominated in an Alternative Currency (i) for Revolving Loans, as of the first day of each Interest Period applicable thereto, (ii) upon the issuance and increase of any Letter of Credit denominated in an Alternative Currency, (iii) as of the end of each fiscal quarter of UK Holdco and (iv) from time to time in its discretion, and shall promptly notify the Revolving Borrowers and the Revolving Lenders of each Dollar Amount so determined by it. Each such determination shall be based on the Exchange Rate on the date of the related Borrowing request for purposes of the initial such determination for any Revolving Loan.

 

(b)          If after giving effect to any such determination of a Dollar Amount, the sum of the aggregate Outstanding Amount of the Revolving Loans denominated in Alternative Currencies and the L/C Obligations denominated in Alternative Currencies exceeds the aggregate Dollar Amount of Revolving Commitments then in effect by 5.0% or more, the Revolving Borrowers shall, within five Business Days of receipt of notice thereof from the Administrative Agent setting forth such calculation in reasonable detail, prepay the applicable Outstanding Amount of the Revolving Loans denominated in Alternative Currencies under the Revolving Facility or take other action as the Administrative Agent, in its discretion, may direct (including Cash Collateralization of the applicable L/C Obligations).

 

2.30         Additional Alternative Currencies .

 

(a)          The Borrower Representative (on behalf of any Revolver Co-Borrower) may from time to time request that Revolving Loans be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency”; provided that such requested currency is a lawful currency that is readily available and freely transferable and convertible into Euros. In the case of any such request with respect to the making of Revolving Loans, such request shall be subject to the approval of the Administrative Agent and the Revolving Lenders; and, in the case of any such request with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Administrative Agent and the applicable Issuing Lender.

 

(b)          Any such request shall be made to the Administrative Agent not later than 11:00 a.m. (New York City time) fifteen Business Days prior to the date of the desired Borrowing (or such other time or date as may be agreed by the Administrative Agent and, in the case of any such request pertaining to Letters of Credit, the relevant Issuing Lender, in its or their sole discretion). In the case of any such request pertaining to Revolving Loans, the Administrative Agent shall promptly notify each Revolving Lender thereof and in the case of any such request pertaining to Letters of Credit, the Administrative Agent shall promptly notify the relevant Issuing Lender. Each such Revolving Lender (in the case of any such request pertaining to Revolving Loans) or the Issuing Lender (in the case of a request pertaining to Letters of Credit) shall notify the Administrative Agent, not later than 11:00 a.m. (New York City time), ten Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Revolving Loans or the issuance of Letters of Credit, as the case may be, in the requested currency.

 

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(c)          Any failure by any Revolving Lender or any Issuing Lender, as the case may be, to respond to such request within the time period specified in the preceding paragraph (b) shall be deemed to be a refusal by such Revolving Lender, Issuing Lender, as the case may be, to permit Revolving Loans to be made or Letters of Credit to be issued in such requested currency. If the Administrative Agent and all the Revolving Lenders that would be obligated to make Revolving Loans denominated in such requested currency consent to making Revolving Loans in such requested currency, the Administrative Agent shall so notify the Borrower Representative and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Borrowings of Revolving Loans; and if the Administrative Agent and the relevant Issuing Lender consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Borrower Representative and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the Administrative Agent shall fail to obtain the requisite consent to any request for an additional currency under this Section 2.30 , the Administrative Agent shall promptly so notify the Borrower Representative.

 

SECTION 3.
LETTERS OF CREDIT

 

3.1           L/C Commitment .

 

(a)          Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.4(a) , agrees to issue standby letters of credit and to the extent agreed to by an Issuing Lender, bank guarantees and commercial letters of credit providing for the payment of cash upon the honoring of a presentation thereunder (collectively, “ Letters of Credit ”) for the account of UK Holdco or the account of any of the Restricted Subsidiaries ( provided that the Borrower Representative shall be an applicant, and be fully and unconditionally liable, with respect to each Letter of Credit issued for the account of a Restricted Subsidiary) on any Business Day prior to the date that is 30 days prior to the Revolving Termination Date in such form as may be approved from time to time by the Issuing Lenders; provided that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment, (ii) the aggregate Dollar Amount of the Available Revolving Commitments would be less than zero or (iii) the L/C Obligation of such Issuing Lender would exceed its L/C Sublimit. Each Letter of Credit shall (i) be denominated in Dollars or one or more Alternative Currencies, (ii) have a stated amount acceptable to the relevant Issuing Lender, (iii) expire no later than the earlier of (x) the first anniversary of its date of issuance, and (y) the date that is five Business Days prior to the Revolving Termination Date, provided that any Letter of Credit with the consent of the applicable Issuing Lender may provide for the renewal or extension thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above, except to the extent the L/C Obligations under such Letter of Credit have been Cash Collateralized); provided , further , that the Issuing Lenders shall not renew or extend any such Letter of Credit if it has received written notice (or otherwise has knowledge) that an Event of Default has occurred and is continuing or any of the conditions set forth in Section 5.2 are not satisfied prior to the date of the decision to renew or extend such Letter of Credit) and (iv) be otherwise reasonably acceptable in all respects to the Issuing Lenders. Unless otherwise directed by the Issuing Lenders, the Borrower Representative shall not be required to make a specific request to an Issuing Lender for any such extension. Once any Letter of Credit has been issued that may be extended automatically pursuant to the foregoing, the Revolving Lenders shall be deemed to have authorized (but may not require) the Issuing Lenders to permit the extension of such Letter of Credit, including to the date that is five Business Days prior to the Revolving Termination Date. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof. Existing Letters of Credit shall constitute utilization of the Revolving Commitments.

 

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(b)          The Issuing Lenders shall not at any time be obligated to issue any Letter of Credit (i) if such issuance would conflict with, or cause the Issuing Lenders or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law, (ii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lenders from issuing such Letter of Credit, or any Requirement of Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lenders shall prohibit, or request that the Issuing Lenders refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lenders with respect to such Letter of Credit any restriction, reserve or capital requirement (for which an Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon each Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which each Issuing Lender in good faith deems material to it or (iii) as otherwise provided in Section 3.2(b) below.

 

(c)          Subject to the terms and conditions hereof, (i) Letters of Credit may be issued on the Closing Date to backstop or replace letters of credit outstanding on the Closing Date or (ii) all letters of credit issued for the account of the Borrower Representative or any Restricted Subsidiary and outstanding on the Closing Date and issued by an entity that is an Issuing Lender under this Agreement, which, by its execution of this Agreement, has agreed to act as an Issuing Lender hereunder and listed on Schedule 3.1 (each, an “ Existing Letter of Credit ”) shall automatically be continued hereunder on the Closing Date by the applicable Issuing Lender, and as of the Closing Date the Revolving Lenders shall acquire a participation therein as if such Existing Letter of Credit were issued hereunder, and each such Existing Letter of Credit shall be deemed a Letter of Credit for all purposes of this Agreement as of the Closing Date without any further action by the Borrower Representative.

 

3.2           Procedure for Issuance of Letter of Credit .

 

(a)          The Borrower Representative may from time to time on any Business Day occurring from (or, in the case of any Letter of Credit permitted to be issued on the Closing Date, prior to) the Closing Date until the Revolving Termination Date request that an Issuing Lender issue a Letter of Credit by delivering to the relevant Issuing Lender, with a copy to the Administrative Agent, at its address for notices specified herein an Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may request. Promptly upon receipt of any Application, the relevant Issuing Lender will confirm with the Administrative Agent that the Administrative Agent has received a copy of the Application, and if not, will furnish the Administrative Agent with a copy thereof. Unless such Issuing Lender has received written notice from the Administrative Agent or the Borrower Representative, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more of the conditions contained in Section 5 shall not then be satisfied, then, subject to the terms and conditions hereof, such Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall any Issuing Lender be required to issue any Letter of Credit (a) earlier than (i) five Business Days, in the case of standby Letters of Credit or similar agreements or (ii) to the extent an Issuing Lender agrees to issue bank guarantees or commercial Letters of Credit, or similar agreements, such period of time as is acceptable to such Issuing Lender, or (b) later than 10 Business Days, (or in each case such shorter period as may be agreed to by an Issuing Lender in any particular instance) after, its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lenders and the Borrower Representative. Each Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower Representative and the Administrative Agent promptly following the issuance thereof. The Administrative Agent shall promptly furnish to the Revolving Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

 

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(b)           Cash Collateral . (i) If an Issuing Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing and the conditions set forth in Section 5.2 to a Revolving Borrowing cannot then be met, (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, (iii) if any Event of Default occurs and is continuing and the Administrative Agent or the Required Lenders, as applicable, require the Revolving Borrowers to Cash Collateralize the L/C Obligations pursuant to Section 9.3 or (iv) an Event of Default set forth under Section 9.1(g) occurs and is continuing, then the Revolving Borrowers shall Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be), and shall do so not later than 2:00 p.m. (New York City time) on (x) in the case of the immediately preceding clauses (i) through (iii), (1) if the Borrower Representative receives notice thereof prior to 11:00 a.m. (New York City time), on any Business Day, on the Business Day immediately following receipt of such notice or (2) if the Borrower Representative receives notice thereof after 11:00 a.m. (New York City time), on any Business Day, on the second Business Day immediately following receipt of such notice (y) in the case of the immediately preceding clause (iv), the Business Day on which an Event of Default set forth under Section 9.1(g) occurs or, if such day is not a Business Day, the Business Day immediately succeeding such day. At any time that there shall exist a Defaulting Lender, if any Defaulting Lender Fronting Exposure remains outstanding (after giving effect to Section 2.27(a)(iv) ), then promptly upon the request of the Administrative Agent, each Issuing Lender or the Swingline Lender, the Revolving Borrowers shall Cash Collateralize the Defaulting Lender Fronting Exposure and deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover such Defaulting Lender Fronting Exposure (after giving effect to any Cash Collateral provided by the Defaulting Lender); provided that if any Defaulting Lender Fronting Exposure is not Cash Collateralized in accordance with the foregoing to the reasonable satisfaction of the Issuing Lenders, the Issuing Lenders shall have no obligation to issue new Letters of Credit or to extend, renew or amend existing Letters of Credit to the extent Letter of Credit exposure would exceed the commitments of the non-Defaulting Lenders. For purposes hereof, “ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the relevant Issuing Lender and the Lenders, as collateral for the L/C Obligations, Cash Collateral pursuant to documentation in form and substance reasonably satisfactory to the relevant Issuing Lender (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Revolving Borrowers hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in a Cash Collateral Account and may be invested in readily available Cash Equivalents. If at any time the Administrative Agent reasonably determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent (on behalf of the Secured Parties) or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations (or in the case of Cash Collateral provided with regard to Defaulting Lender Fronting Exposure, such amount of Defaulting Lender Fronting Exposure), the Revolving Borrowers will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in a Cash Collateral Account as aforesaid, an amount equal to the excess of (a) such aggregate Outstanding Amount over (b) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent reasonably determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Law, to reimburse the relevant Issuing Lender. To the extent the amount of any Cash Collateral exceeds the then Outstanding Amount of such L/C Obligations and so long as no Event of Default has occurred and is continuing, the excess shall be refunded to the Revolving Borrowers.

 

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3.3           Fees and Other Charges .

 

(a)          The Revolving Borrowers will pay a fee on the actual aggregate daily undrawn and unexpired amount of all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurocurrency Loans under the Revolving Facility, less the amount of fronting fee referred to in the next sentence, shared ratably among the Revolving Lenders and payable quarterly in arrears on each applicable Fee Payment Date after the issuance date. In addition, the Revolving Borrowers shall pay to each Issuing Lender for its own account a fronting fee of 0.125% per annum (or such lower fee as the Issuing Lenders may agree) on the actual aggregate daily undrawn and unexpired amount of all such Issuing Lender’s Letters of Credit outstanding during the applicable period, payable quarterly in arrears on each applicable Fee Payment Date after the issuance date.

 

(b)          In addition to the foregoing fees, the Revolving Borrowers shall pay or reimburse such Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit. Such costs and expenses shall be due and payable on demand and nonrefundable.

 

3.4           L/C Participations .

 

(a)          The Issuing Lenders irrevocably agree to grant and hereby grant to each L/C Participant, and, to induce the Issuing Lenders to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lenders, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in the Issuing Lenders’ obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by an Issuing Lender thereunder. Each L/C Participant agrees with the Issuing Lenders that, if a draft is paid under any Letter of Credit for which an Issuing Lender is not reimbursed in full by the Revolving Borrowers in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against any Issuing Lender, the Revolving Borrowers, any other Group Member or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5 , (iii) any adverse change in the condition (financial or otherwise) of the Borrower Representative and the Restricted Subsidiaries, (iv) any breach of this Agreement or any other Loan Document by the Borrowers, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

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(b)          If any amount required to be paid by any L/C Participant to the Issuing Lenders pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lenders under any Letter of Credit is paid to the Issuing Lenders within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lenders on demand an amount equal to the product of (i) such amount, times (ii) the daily Overnight Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lenders, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available to the Issuing Lenders by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lenders shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Revolving Facility. A certificate of an Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error.

 

(c)          Whenever, at any time after an Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.4(a) , an Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower Representative or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided , however , that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

 

3.5           Reimbursement Obligation of the Revolving Borrowers . Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Lenders shall promptly notify the Borrower Representative and the Administrative Agent thereof. If any drawing is paid under any Letter of Credit, the Revolving Borrowers shall reimburse the Issuing Lenders for the amount of (a) the drawing so paid and (b) any fees, charges or other costs or expenses incurred by the Issuing Lenders in connection with such payment, not later than 3:00 p.m. (New York City time) on (x) if such notice of drawing is received, (i) in the case of any drawing in any Alternative Currency, prior to 11:00 a.m. (London time) or (ii) in the case of any drawing in Dollars, prior to 11:00 a.m. (New York time), in each case, on the first Business Day following the date such drawing is paid by the Issuing Lenders and (y) otherwise, the second Business Day following the date such drawing is paid by the Issuing Lenders (the “ Honor Date ”). Each such payment shall be made to an Issuing Lender at its address for notices referred to herein in the currency in which the applicable Letter of Credit is denominated and in immediately available funds. If the Revolving Borrowers fail to reimburse an Issuing Lender on the Honor Date, interest shall be payable on any such amounts from the date on which the relevant drawing is paid until payment in full at the rate set forth in (x) until the second Business Day next succeeding the date of the relevant notice, Section 2.14(b) and (y) thereafter, Section 2.14(c) .

 

3.6           Obligations Absolute . The Revolving Borrowers’ obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrowers may have or have had against the Issuing Lenders, any beneficiary of a Letter of Credit or any other Person (it being understood that this provision shall not preclude the ability of the Borrowers to bring any claim for damages against any such Person who has acted with gross negligence or willful misconduct, as determined in a final and non-appealable decision of a court of competent jurisdiction). The Borrowers also agree with the Issuing Lenders that the Issuing Lenders shall not be responsible for, and the Revolving Borrowers’ Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Revolving Borrowers and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Revolving Borrowers against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lenders shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lenders. The Revolving Borrowers agree that any action taken or omitted by the Issuing Lenders under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct (as determined in a final and non-appealable decision of a court of competent jurisdiction), shall be binding on the Revolving Borrowers and shall not result in any liability of the Issuing Lenders to the Revolving Borrowers.

 

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3.7           Letter of Credit Payments . If any draft shall be presented for payment under any Letter of Credit, the Issuing Lenders shall promptly notify the Borrower Representative of the date and amount thereof. The responsibility of the Issuing Lenders to the Borrower Representative in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

 

3.8           Applications . To the extent that any provision of any Application related to any Letter of Credit, or any other agreement submitted by the Borrower Representative to, or entered into by the Borrower Representative with, the Issuing Lenders or any other Person relating to any Letter of Credit, is inconsistent with the provisions of this Section 3 , the provisions of this Section 3 shall control.

 

3.9           Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms (or the terms of any applicable Application or other document, agreement or instrument entered into by the applicable Issuing Lender and the Borrower Representative (or Restricted Subsidiary, if applicable) or in favor of the applicable Issuing Lender and relating to such Letter of Credit) provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

3.10         Revaluation of Letters of Credit . If any Letter of Credit is denominated in any currency other than Dollars, the applicable Issuing Lender with respect to such Letter of Credit shall, on January 15th and July 15th of each calendar year (or, if any such day is not a Business Day, the next succeeding Business Day), recalculate the Dollar Amount of the L/C Obligations under such Letter of Credit by notionally converting into Euros the Outstanding Amount of such L/C Obligations in accordance with Section 1.5(a) . The Borrower Representative shall, if requested by the applicable Issuing Lender within five days of any calculation pursuant to the immediately preceding sentence, prepay Swingline Loans and Revolving Loans and Collateralize Letters of Credit in accordance with Section 2.11(e) to the extent necessary to remove any Revolving Excess that may exist following any adjustment to the Dollar Amount of any L/C Obligations pursuant to the immediately preceding sentence.

 

SECTION 4.
REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, each Loan Party (but with respect to Holdings, the Tower Borrowers and the Tower Subsidiary Guarantors, solely as set forth herein) hereby jointly and severally represents and warrants to the Administrative Agent and each Lender that ( provided that the representation and warranty in Section 4.2 shall not be made as of the Closing Date):

 

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4.1           Financial Condition .

 

(a)          The unaudited pro forma combined balance sheet of Company and its combined Subsidiaries as at June 30, 2016 (the “ Pro Forma Balance Sheet ”) and related pro forma combined statements of operations of Company and its combined Subsidiaries for the twelve-month period ended June 30, 2016, copies of which have heretofore been furnished to each Lender, has been prepared giving effect (as if such events had occurred on such date) to the consummation of the Transactions. The Pro Forma Balance Sheet has been prepared based on the best information available to Borrower Representative as of the date of delivery thereof, and presents fairly in all material respects on a Pro Forma Basis the estimated financial position of Company and its combined Subsidiaries as at June 30, 2016 assuming that the events specified in the preceding sentence had actually occurred at such date.

 

(b)          The unaudited combined balance sheets at June 30, 2016 and related unaudited combined statements of operations and statement of stockholder’s equity and cash flows related to the Company and its Subsidiaries for the twelve months ended June 30, 2016 present fairly in all material respects the financial condition of the Company and its combined Subsidiaries as at such applicable date, and the results of its operations and its combined stockholder’s equity and cash flows for twelve months then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved.

 

(c)          The audited combined balance sheets at December 31, 2014 and December 31, 2015 and related combined statements of operations, comprehensive income (loss), changes in parent company net investment and cash flows related to the Company for the fiscal years ended December 31, 2014 and December 31, 2015, in each case reported on by and accompanied by an unqualified report as to going concern or scope of audit from PricewaterhouseCoopers LLP, present fairly in all material respects the combined financial condition of the Company and its combined Subsidiaries as at such applicable date, and the combined results of its operations and its combined stockholder’s equity and cash flows for the respective fiscal years then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). No Group Member has, as of the Closing Date after giving effect to the Transactions and excluding obligations under the Loan Documents, any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long term leases or unusual forward or long term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, which are required in conformity with GAAP to be disclosed therein and which are not reflected in the most recent financial statements referred to in this paragraph.

 

4.2           No Change . Since December 31, 2015, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

4.3           Existence; Compliance with Law . Each Group Member (a) is duly organized (or where applicable in the relevant jurisdiction, registered or incorporated), validly existing and (where applicable in the relevant jurisdiction) in good standing under the laws of the jurisdiction of its organization, registration or incorporation, as the case may be, (b) has the power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is in compliance with all Requirements of Law, except in the case of clauses (a) (as it relates to good standing), (b) and (c) above, to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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4.4           Power; Authorization; Enforceable Obligations .

 

(a)          Each Loan Party has the power and authority, and the legal right, to enter into, make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrowers, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrowers, to authorize the extensions of credit on the terms and conditions of this Agreement.

 

(b)          No Governmental Approval or consent or authorization of, filing with, notice to or other act by or in respect of, any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity, enforceability or (under the laws of the United Kingdom or Luxembourg) the admissibility into evidence in any legal action or proceeding in the courts of the United Kingdom or Luxembourg of this Agreement or any of the Loan Documents, except (i) Governmental Approvals, consents, authorizations, filings and notices that have been obtained or made and are in full force and effect, (ii) the filings referred to in Section 4.15 and (iii) post-facto filings that may be required under the Foreign Exchange and Foreign Trade Act of Japan (Law No. 228 in 1949, as amended). No Governmental Approval or consent or authorization of, filing with, notice to or other act by or in respect of, any other Person is required in connection with the consummation of the Transactions, except (x) Governmental Approvals, consents, authorizations, filings and notices that have been obtained or made and are in full force and effect and (y) the filings referred to in Section 4.15 .

 

(c)          Each Loan Document has been duly executed and delivered on behalf of each applicable Loan Party. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each applicable Loan Party, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by any Legal Reservations.

 

4.5           No Legal Bar . The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings and guarantees hereunder and the use of the proceeds thereof (i) will not violate any material Requirement of Law, any Contractual Obligation of Holdings or any Group Member that is material to Holdings and its Subsidiaries, taken as a whole, or the Organizational Documents of any Loan Party and (ii) will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law, any such Organizational Documents or any such Contractual Obligation (other than the Liens created by the Security Documents). The consummation of the Transactions will not (a) violate (x) any Requirement of Law or any Contractual Obligation of any Group Member, except as would not reasonably be expected to have a Material Adverse Effect or (y) the Organizational Documents of any Loan Party and (b) result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law, any such Organizational Documents or any such Contractual Obligation (other than Liens in favor of the Administrative Agent (on behalf of the Secured Parties) on the Collateral).

 

4.6           Litigation . No litigation, suit or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of any Loan Party, threatened by or against any Group Member or against any of their respective properties, assets or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have a Material Adverse Effect.

 

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4.7           Ownership of Property; Liens . Each Group Member has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 7.7 or Section 7.2A and except where the failure to have such title or other interest could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each of the Tower Group Members and the Lux Company Borrower, as of the Closing Date and after giving effect to the Transactions, has no material (x) assets (other than, (i) in the case of the US Tower Borrower, its ownership of all of the issued Capital Stock of, and intercompany debt created pursuant to the Tower LLC Transaction from, Tower LLC, (ii) in the case of the FHC Tower Borrower, its legal and equitable ownership of all of the issued Capital Stock of, and intercompany debt created pursuant to the Tower Co Transaction from, Tower Co, (iii) in the case of Tower LLC, the loans payable to it by the US Company Borrowers pursuant to the Tower LLC Loan (made as a part of the Tower LLC Transaction), (iv) in the case of Tower Co, the loans payable to it by the Lux Company Borrower pursuant to the Tower Co Loan (made as a part of the Tower Co Transaction)) or (y) liabilities (other than its obligations under the Loan Documents and intercompany debt in connection with the Tower Transactions) and (v) in the case of the Lux Company Borrower, the Loan Note Instruments (and related purchase agreement) payable to it by UK Holdco.

 

4.8           Intellectual Property . Except as could not, individually or in an aggregate, reasonably be expected to have a Material Adverse Effect, the Group Members own, or are licensed to use, all intellectual property necessary for the conduct in all material respects of the business of UK Holdco and the Restricted Subsidiaries, taken as a whole, as currently conducted. As of the Closing Date, except as could not, individually or in an aggregate, reasonably be expected to have a Material Adverse Effect, the Group Members own, or are licensed to use, all intellectual property necessary for the conduct in all material respect of the business of UK Holdco and the Restricted subsidiaries, taken as a whole, as was conducted by the Company immediately prior to the Closing Date. No material claim has been asserted and is pending by any Person challenging or questioning any Group Member’s use of any intellectual property or the validity or effectiveness of any Group Member’s intellectual property or alleging that the conduct of any Group Member’s business infringes or violates the rights of any Person, nor does UK Holdco or any other Loan Party know of any valid basis for any such claim except for such claims that could not reasonably be expected to impair or interfere in any material respect with the operations of the business conducted by UK Holdco and the Restricted Subsidiaries, taken as a whole, or result in a Material Adverse Effect.

 

4.9           Taxes . Except as set forth on Schedule 4.9 or as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each Group Member has filed or caused to be filed all Tax returns that are required to be filed and has paid all Taxes shown to be due and payable on said returns or on any assessments made against it or any of its property by any Governmental Authority (other than any amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Group Member); and (ii) no tax Lien (other than any Liens for Taxes not yet due and payable) has been filed, and, to the knowledge of any of the Group Members, no claim is being asserted, with respect to any such Tax, fee or other charge.

 

4.10         Federal Regulations . No Group Member is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for the purpose of buying or carrying Margin Stock or for any purpose that violates the provisions of the Regulations of the Board.

 

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4.11         Employee Benefit Plans . Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) neither a Reportable Event nor a failure to meet the minimum funding standards of Section 412 or 430 of the Code or Section 302 or 303 of ERISA has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, (ii) each Plan has been operated and maintained in compliance in all respects with applicable Law, including the applicable provisions of ERISA and the Code, and the governing documents for such Plan, (iii) no termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period, (iv) the present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount, (v) neither UK Holdco nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, (vi) no such Multiemployer Plan is in Reorganization or Insolvent, (vii) each Foreign Plan has been operated and maintained in compliance in all respects with applicable law and the governing documents for such plan and (viii) no Foreign Benefit Plan Event has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Foreign Plan.

 

4.12         Investment Company Act . No Loan Party is registered or required to be registered as an “investment company”, under the Investment Company Act of 1940, as amended.

 

4.13         Environmental Matters . Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect:

 

(a)          the facilities and real properties owned, leased or operated by any Group Member (the “ Properties ”) do not contain, and (to the knowledge of the Group Members) have not previously contained, any Materials of Environmental Concern in amounts or concentrations or under circumstances that constitute or constituted a violation of any Environmental Law;

 

(b)          no Group Member has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the business operated by any Group Member (the “ Business ”), nor does any Group Member have knowledge that any such notice is being threatened;

 

(c)          Materials of Environmental Concern have not been released, transported, generated, treated, stored or disposed of from the Properties in violation of, or in a manner or to a location that is reasonably expected to give rise to liability under, any Environmental Law;

 

(d)          no judicial proceeding or governmental or administrative action is pending or, to the knowledge of any Group Member, threatened, under any Environmental Law to which any Group Member is or, to the knowledge of the Group Member, will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business;

 

(e)          the Properties and all operations at the Properties are in compliance, and (to the knowledge of the Group Members) have in the past five years been in compliance, with all applicable Environmental Laws;

 

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(f)          to the knowledge of the Group Members, there are no past or present conditions, events, circumstances, facts, or activities that would reasonably be expected to give rise to any liability or other obligation for any Group Member under any Environmental Laws; and

 

(g)          no Group Member has assumed any liability of any other Person under Environmental Laws.

 

4.14         Accuracy of Information, etc.  No statement or information concerning any Group Member or the Business contained in this Agreement, any other Loan Document, or any other document, certificate or written statement furnished by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them (except for projections, pro forma financial information and information of a general economic or industry nature), for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, when taken as a whole, contained, as of the date such statement, information, document or certificate was so furnished and after giving effect to all supplements and updates thereto, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading in light of the circumstances under which such statements were made. The projections and pro forma financial information, taken as a whole, contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower Representative to be reasonable at the time made and as of the Closing Date (with respect to such projections and pro forma financial information delivered prior to the Closing Date), it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact, forecasts and projections are subject to uncertainties and contingencies, actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount and no assurance can be given that any forecast or projections will be realized.

 

4.15         Security Documents .

 

(a)          Each of the Security Documents is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and, subject to any Legal Reservations, enforceable security interest in the Collateral described therein and proceeds thereof, subject to the relevant Perfection Requirements under applicable laws.

 

(b)          Each of the Tower Security Documents expressed to secure the obligations under the Loan Note Instrument (Term Loan) and the obligations under the Tower Co Loan is effective to create in favor of the beneficiary a legal, valid and, subject to any Legal Reservations, enforceable security interest in the Collateral described therein and proceeds thereof, subject to the relevant Perfection Requirements under applicable laws.

 

(c)          Subject to the Agreed Security Principles and the Perfection Requirements and only to the extent such Liens are intended to be created by the relevant Security Documents and required to be perfected under the Loan Documents, the Liens created by the Security Documents constitute fully perfected (or the equivalent under applicable law) first priority Liens (subject to Permitted Liens) so far as possible under relevant law on, and security interests in all right, title and interest of the grantors in such Collateral in each case free and clear of any Liens other than Liens permitted hereunder.

 

(d)          Subject to the Perfection Requirements and only to the extent such Liens are intended to be created by the relevant Tower Security Documents and required to be perfected under the Tower Borrower Documents, the Liens created by such Tower Security Documents constitute fully perfected (or the equivalent under applicable law) second priority Liens so far as possible under relevant law on, and security interests in all right, title and interest of the grantors in such Collateral in each case free and clear of any Liens other than Liens permitted hereunder

 

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4.16         Solvency . As of the Closing Date (and after giving effect to the consummation of the Acquisition and the other elements of the Transaction to occur on the Closing Date), each of (i) Holdings and its Subsidiaries, (ii) the US Tower Borrower and Tower LLC, and (iii) the FHC Tower Borrower and Tower Co, each on a consolidated basis, after giving effect to the Transactions and the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith and the other transactions contemplated hereby and thereby, will be and will continue to be, Solvent.

 

4.17         Patriot Act; FCPA; OFAC; Sanctions .

 

(a)          To the extent applicable, the Loan Parties and each of their Subsidiaries are in compliance in all material respects with U.S. and non-U.S. Laws relating to anti-money laundering including, without limitation, the Patriot Act.

 

(b)          The Loan Parties and each of their Subsidiaries are in compliance in all material respects with all applicable Anti-Corruption Laws.

 

(c)          None of the Loan Parties, nor any of their Subsidiaries, nor any affiliate, director, officer or employee of the Loan Parties and each of their Subsidiaries, nor, to the knowledge of the Loan Parties and each of their Subsidiaries, any agent or representative of the Loan Parties and each of their Subsidiaries, is a Sanctioned Person. No Group Member is located, organized or resident in a country or territory that is the subject of Sanctions Laws as of the Closing Date.

 

(d)          The Loan Parties will not, directly or indirectly, use the proceeds of any Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary (and any joint ventures of the Loan Parties or any of their Subsidiaries), joint venture partner or other Person, to fund any activities of or business with any Sanctioned Person, or in any country or territory, that, at the time of such funding, is itself the subject of Sanctions Laws, or in any other manner that will result in a violation by any Person (including any Person participating in any Loan transaction, whether as a Lender, advisor, or otherwise) of Sanctions Laws or applicable Anti-Corruption Laws; provided that the obligations in this clause (d) shall in no event be interpreted or applied in such a manner that the obligations hereunder would violate or expose any Loan Party, any of its Subsidiaries or any Secured Party (or any director, officer or employee thereof) to any liability under any anti-boycott or blocking law, regulation or statute that is in force from time to time and applicable to such entity or person (including, without limitation, EU Regulation (EC) 2271/96).

 

(e)          The representations and warranties contained in this Section 4.17 (A) made by any Restricted Subsidiary resident in Germany ( Inländer ) within the meaning of section 2 paragraph 15 of the German Foreign Trade Act ( Außenwirtschaftsgesetz ), are only made to the extent such relevant representation and/or warranty does not result in a violation of or conflict with section 7 of the German Foreign Trade Ordinance ( Außenwirtschaftsverordnung ) or any similar anti-boycott statute, and (B) given by any Loan Party to any Lender resident in Germany ( Inländer ) within the meaning of section 2 para. 15 of the German Foreign Trade Act ( Außenwirtschaftsgesetz ) are made only to the extent that any Lender resident in Germany ( Inländer ) within the meaning of section 2 para. 15 of the German Foreign Trade Act ( Außenwirtschaftsgesetz ) would be permitted to make such representation and warranties pursuant to section 7 of the German Foreign Trade Ordinance ( Außenwirtschaftsverordnung ).

 

4.18         Status as Senior Indebtedness . The Obligations under the Facilities constitute “Senior Indebtedness” under the Senior Notes and “senior debt”, “senior indebtedness”, “guarantor senior debt”, “senior secured financing” and “designated senior indebtedness” (or any comparable term) for all Indebtedness (if any) that is subordinated in right of payment to the Obligations.

 

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4.19         Use of Proceeds . The Borrowers (a) will only use the proceeds of the Initial Term Loans to finance a portion of the Transactions (including paying any fees, commissions and expenses associated therewith); (b) will only use the proceeds of the Revolving Loans incurred on the Closing Date in a Dollar Amount not to exceed $20,000,000 plus, at the Borrowers’ election, an amount sufficient to fund upfront or similar fees or original issue discount payable by UK Holdco or any of the Restricted Subsidiaries to the Lenders providing Commitments in the initial primary syndication thereof or payable pursuant to the “market flex” provisions in the Fee Letter; and (c) will use the proceeds of all other Borrowings to finance the working capital needs of the Borrowers and the Restricted Subsidiaries and for general corporate purposes of the Borrowers and the Restricted Subsidiaries (including acquisitions and other Investments permitted hereunder).

 

4.20         Governing Law and Enforcement . Subject to the Legal Reservations and Perfection Requirements, (i) the choice of governing law of the Loan Documents to which each Loan Party is a party will be recognized and enforced in its Relevant Jurisdiction and (ii) any judgment obtained in relation to a Loan Document to which each Loan Party is a party in the jurisdiction of the governing law of that Loan Document will be recognized and enforced in its Relevant Jurisdiction.

 

4.21         Centre of Main Interests . On the Closing Date, for the purposes of The Council of the European Union Regulation No. 1346/2000 dated May 29, 2000, on Insolvency Proceedings (the “ Regulation ”), the centre of main interest (as that term is used in Article 3(1) of the Regulation) of each Loan Party that is incorporated in a member state of the European Union is situated in its jurisdiction of incorporation or organization and it has no “establishment” as that term is used in Article 2(h) of that Regulation in any other jurisdiction.

 

4.22         Luxembourg Specific Representations . (i) Each Luxembourg Loan Party is in compliance with all the requirements of the Luxembourg legislation and regulations on the domiciliation of companies, and in particular with the Luxembourg Act dated May 31, 1999 on the domiciliation of companies, as amended from time to time; (ii) the head office ( administration centrale ) and the place of effective management ( siège de direction effective ) and (for the purposes of the Council Regulation (EC) N° 1346/2000 of May 29, 2000 on insolvency proceedings) the centre of main interests ( centre des intérèts principaux ) of each Luxembourg Loan Party is located at the place of its registered office ( siège statutaire ) in Luxembourg; (iii) no Luxembourg Loan Party has filed and, to the best of its knowledge, no Person has filed a request with any competent court seeking that any Luxembourg Loan Party, be declared subject to bankruptcy ( faillite ), general settlement or composition with creditors ( concordat préventif de faillite ) controlled management ( gestion contrôlée ), reprieve from payment ( sursis de paiement ), judicial or voluntary liquidation ( liquidation judiciaire ou volontaire ), such other proceedings listed at Article 13, items 2 to 12 and Article 14 of the Luxembourg Act dated December 19, 2002 on the Register of Commerce and Companies, on Accounting and on Annual Accounts of the Companies (as amended from time to time) (and which include foreign court decision as to faillite , concordat or analogous procedures according to Council Regulation (EC) n°1346/2000 of May 29, 2000 on insolvency proceedings).

 

Notwithstanding anything herein or in any other Loan Document to the contrary, no officer of Holdings or any Group Member shall have any personal liability in connection with the representations and warranties and other certifications in this Agreement or any other Loan Document.

 

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SECTION 5.
CONDITIONS PRECEDENT

 

5.1           Conditions to Closing Date . The agreement of each Lender to make the initial extension of credit requested to be made by it under this Agreement on the Closing Date is subject to the satisfaction, prior to or concurrently with the making of such extension of credit on the Closing Date, of the following conditions precedent:

 

(a)           Loan Documents . The Administrative Agent shall have received:

 

(i)          this Agreement, executed and delivered by Holdings, the Borrowers, each Guarantor and each Person listed on Schedule 1.1A-1 ;

 

(ii)         the US Security Agreement, executed and delivered by the Loan Parties party thereto;

 

(iii)        the Onex LP US Pledge Agreement, executed and delivered by the sole limited partner of the US Tower Borrower;

 

(iv)        the Onex GP US Pledge Agreement, executed and delivered by the sole general partner of the US Tower Borrower;

 

(v)         the Onex LP Foreign Pledge Agreement, executed and delivered by the sole limited partner of the FHC Tower Borrower;

 

(vi)        the Onex GP Foreign Pledge Agreement, executed and delivered by the sole general partner of the FHC Tower Borrower;

 

(vii)       the Intellectual Property Security Agreements, executed and delivered by the Loan Parties party thereto;

 

(viii)      each other Security Document as required pursuant to Schedule 1.1D-1 , executed and delivered by the Loan Parties party thereto;

 

(ix)         each Note, executed and delivered by the Borrowers in favor of each Lender requesting the same;

 

(x)          the Tower LLC Term Loan Credit Agreement, executed and delivered by Tower LLC and the US Company Borrowers;

 

(xi)         the Tower LLC Subordination Agreement, executed and delivered by Tower LLC and the US Company Borrowers;

 

(xii)        the Tower Co Term Loan Credit Agreement, executed and delivered by Tower Co and the Lux Company Borrower;

 

(xiii)       the Tower Co Subordination Agreement, executed and delivered by Tower Co, the Lux Company Borrower and Holdings;

 

(xiv)      the Loan Note Instrument (Notes), executed and delivered by UK Holdco;

 

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(xv)       the Loan Note Instrument (Term Loans), executed and delivered by UK Holdco;

 

(xvi)      each Tower Security Document as required pursuant to Schedule 1.1D-2 , executed and delivered by the Loan Parties party thereto; and

 

(xvii)     a Borrowing Request, executed and delivered by the Borrower Representative.

 

(b)           Transactions .

 

(i)          The Acquisition shall have been or, substantially concurrently with the initial borrowing hereunder shall be, consummated in accordance with the terms of the Acquisition Agreement, without giving effect to any modifications, amendments or express waivers or consents thereto that in the aggregate are materially adverse to the interests of the Lenders without the consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, conditioned or delayed) (it being understood and agreed that (a) any decrease in the purchase price (or amendment to the Acquisition Agreement related thereto) shall not be materially adverse to the interests of the Lenders so long as such decrease is allocated (i) first, to reduce the amount of the Equity Contribution to the extent it exceeds the Total Capitalization and (ii) second, unless the Joint Lead Arrangers otherwise consent to a different allocation, to reduce the amount of funded debt on the Closing Date where such reduction is allocated ratably to reduce the Equity Contribution, the Term Loan Facility and the Senior Notes, (b) any increase in the purchase price (or amendment to the Acquisition Agreement related thereto) shall not be materially adverse to the Lenders so long as such increase is funded by an increase in the Equity Contribution and (c) any modification to the definition of “Material Adverse Effect” in the Acquisition Agreement shall be deemed materially adverse to the Lenders.

 

(ii)         The Equity Contribution shall have been or, substantially concurrently with the initial borrowing under the Facilities shall be, consummated.

 

(c)           Existing Debt Release/Repayment . The Existing Debt Release/Repayment shall have been or, substantially concurrently with the initial borrowing under the Facilities shall be, consummated, and after giving effect to the Transactions, the Group Members shall have outstanding no Indebtedness other than (i) the Loans, (ii) the Senior Notes, (iii) the Tower Loans, (iv) the Indebtedness documented by the Loan Note Instruments and (v) Indebtedness permitted to be outstanding under Section 7.2 of this Agreement.

 

(d)           Pro Forma Balance Sheet; Financial Statements . The Lenders shall have received (a) the audited combined balance sheets and related audited combined statements of operations, comprehensive income (loss), changes in parent company net investment and cash flows related to the Company for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013, (b) the unaudited combined balance sheets and related unaudited combined statements of operations, comprehensive income (loss), changes in parent company net investment and cash flows of the Company for each subsequent fiscal quarter after the most recent balance sheet provided in (a) above that is ended at least forty-five (45) days before the Closing Date and (c) a pro forma combined balance sheet and related pro forma combined statement of operations of the Company as of and for the most recently completed four-fiscal quarter period for which historical financial statements of the Company are included in the offering memorandum for the Senior Notes, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other statements of income).

 

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(e)           Fees . The Lenders and the Administrative Agent shall have received all fees required to be paid on or prior to the Closing Date, and all reasonable out-of-pocket expenses required to be paid on the Closing Date for which reasonably detailed invoices have been presented (including the reasonable, fees and expenses of legal counsel to the Administrative Agent) to the Borrower Representative at least three Business Days prior to the Closing Date (or such later date as the Borrower Representative may reasonably agree), which amounts may be offset against the proceeds of the Facilities.

 

(f)           Closing Certificate; Certified Certificate of Incorporation; Good Standing Certificates . The Administrative Agent shall have received (i) an Officer’s Certificate of each Loan Party, dated the Closing Date, in form and substance reasonably acceptable to the Administrative Agent, with appropriate insertions and attachments, including copies of resolutions of the Board of Directors and/or similar governing bodies of each Loan Party approving and authorizing the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrowers, the borrowings hereunder, certified organizational authorizations (if required by applicable law or customary for market practice in the relevant jurisdiction), incumbency certifications, the certificate of incorporation or other similar Organizational Documents of each Loan Party certified by the relevant authority of the jurisdiction of organization, registration or incorporation of such Loan Party (only where customary in the applicable jurisdiction) and bylaws or other similar Organizational Documents of each Loan Party certified by a Responsible Officer as being in full force and effect on the Closing Date, (ii) a good standing certificate (to the extent such concept exists in the relevant jurisdictions) for each Loan Party from its jurisdiction of organization, registration or incorporation and (iii) in relation to the Lux Company Borrower, (A) an up-to-date electronic certified true and complete excerpt of the Companies Register dated no earlier than one Business Day prior to the Closing Date, (B) a solvency certificate dated as of the Closing Date (signed by a director or authorized signatory) that it is not subject to nor, as applicable, does it meet or threaten to meet the criteria of bankruptcy ( faillite ), insolvency, voluntary or judicial liquidation ( liquidation volontaire ou judiciaire ), composition with creditors ( concordat préventif de faillite ), controlled management ( gestion contrôlée ), reprieve from payment ( sursis de paiement ), general settlement with creditors, reorganization or similar laws affecting the rights of creditors generally and no application has been made or is to be made by its director or, as far as it is aware, by any other Person for the appointment of a commissaire , juge-commissaire , liquidateur , curateur or similar officer pursuant to any voluntary or judicial insolvency, winding-up, liquidation or similar proceedings, (C) an up-to-date electronic certified true and complete certificate of non-registration of judgments ( certificat de non-inscription d’une décision judiciaire ), issued by the Companies Register no earlier than one Business Day prior to the Closing Date and reflecting the situation no more than two Business Days prior to the Closing Date certifying that, as of the date of the day immediately preceding such certificate, the Lux Company Borrower has not been declared bankrupt ( en faillite ), and that it has not applied for general settlement or composition with creditors ( concordat préventif de la faillite ), controlled management ( gestion contrôlée ), or reprieve from payment ( sursis de paiement ), judicial liquidation ( liquidation judiciaire ), such other proceedings listed at Article 13, items 2 to 12 and Article 14 of the Luxembourg Act dated December 19, 2002 on the Register of Commerce and Companies, on Accounting and on Annual Accounts of the Companies (as amended from time to time) (and which include foreign court decisions as to faillite , concordat or analogous procedures according to Council Regulation (EC) n°1346/2000 of May 29, 2000 on insolvency proceedings) and (D) an electronic certified copy of the resolution of its directors (or similar body) approving the Loan Documents to which it is party and approving the execution, delivery and performance of, and authorizing named persons to sign the Loan Documents to which it is party and any documents to be delivered by it under any of the same.

 

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(g)           Legal Opinions . The Administrative Agent shall have received the executed legal opinion of Latham & Watkins LLP, special New York counsel to the Loan Parties, and executed legal opinions of each local counsel to the Loan Parties or the Administrative Agent, as applicable, set forth on Schedule 5.1(g) , each of which shall be in form and substance reasonably satisfactory to the Administrative Agent (provided that counsel to the Administrative Agent shall provide such opinions to the extent customary in any applicable jurisdiction).

 

(h)           Pledged Stock; Stock Powers; Pledged Notes . Subject to the last paragraph of this Section 5.1 , the Administrative Agent shall have received (i) the certificates representing the shares of Capital Stock (to the extent certificated) pledged or otherwise required to be delivered pursuant to the Security Documents to be entered into on the Closing Date (to the extent required to be delivered pursuant to such Security Documents and the Agreed Security Principles, but in any event in respect of all the first-tier Subsidiaries of UK Holdco), together with (where applicable in the relevant jurisdiction) an undated stock power or other equity transfer form for each such certificate executed or endorsed in blank by a duly authorized signatory of the pledgor thereof and (ii) notes evidencing the Tower LLC Loans and the Tower Co Loan, certificates evidencing the Loan Note Instruments and the Global Intercompany Note.

 

(i)           Filings, Registrations and Recordings . Subject to the last paragraph of this Section 5.1 , each document (including any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than Permitted Priority Liens), shall have been executed and delivered to the Administrative Agent in proper form for filing, registration or recordation (other than, with respect to any security interest granted by a Loan Party incorporated in England and Wales, registrations with the Registrar of Companies in England and Wales, which shall be effected within 21 days of creating a security interest granted by a Loan Party incorporated in England and Wales).

 

(j)           Solvency Certificate . The Administrative Agent shall have received Solvency Certificates, which demonstrate that (i) Holdings and its Subsidiaries, (ii) the US Tower Borrower and Tower LLC, and (iii) the FHC Tower Borrower and Tower Co, each on a consolidated basis, are and, after giving effect to the Transactions and the other transactions contemplated hereby, will be and will continue to be, Solvent.

 

(k)           Patriot Act . The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least 10 Business Days prior to the Closing Date) shall have received, at least three Business Days prior to the Closing Date, all documentation and other information about Holdings, UK Holdco, Tower LLC, Tower Co, the Borrowers (and, for the avoidance of doubt, excluding the Company) that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including without limitation the Patriot Act.

 

(l)           Representations and Warranties . Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (except where such representations and warranties are already qualified by materiality, in which case such representation and warranty shall be accurate in all respects) on and as of the Closing Date; provided , however , that the failure of such representations and warranties to be true and correct on the date hereof shall not, except to the extent set forth in clause (m) below, be a condition to the funding of the Loans on the Closing Date.

 

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(m)           Specified Representations and Acquisition Agreement Representations . (i) The Specified Representations shall be true and correct in all material respects (or, if already qualified by “materiality”, “Material Adverse Effect” or similar phrases, in all respects (after giving effect to such qualification)) on and as of the Closing Date (except those representations and warranties that address matters only as of a particular date or only with respect to a specific period of time which need only to be true and accurate (or materially true and accurate, as applicable) as of such date) and (ii) the Acquisition Agreement Representations shall be true and correct on and as of the Closing Date, but only to the extent that the Buyer has the right to terminate its obligations, or decline to consummate the Acquisition, under the Acquisition Agreement as a result of a breach of such representations and warranties.

 

(n)           No Material Adverse Effect . Since July 10, 2016, there shall not have occurred any event, change, occurrence or effect that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect (as defined in the Acquisition Agreement).

 

(o)           Guarantees . The guarantees of the Guarantor Obligations by Holdings, UK Holdco, the Tower Group Members and all U.S. Subsidiaries shall be in full force and effect.

 

Notwithstanding the foregoing, to the extent any Collateral or any security interest therein (other than Collateral with respect to which a lien or security interest may be perfected by (w) intellectual property security filings with the United States Patent and Trademark Office or the United States Copyright Office, (x) the filing of a financing statement under the Uniform Commercial Code, (y) the delivery of any promissory note or certificate evidencing a Tower LLC Loan, the Tower Co Loan and the Loan Note Instruments, together with undated note powers, and (z) the delivery of any stock certificates, if any, together with undated stock powers executed in blank, (I) by Holdings, with respect to the Company Borrowers and UK Holdco only and (II) with respect to all material (to be defined in the relevant Security Document in a manner to be agreed) wholly-owned restricted subsidiaries formed in the United States; provided that stock certificates together with undated stock powers executed in blank of such material subsidiaries of the Company will only be delivered on the Closing Date to the extent received from the Company after the Borrowers’ use of commercially reasonable efforts to do so) is not provided or perfected on the Closing Date after the Borrowers’ use of commercially reasonable efforts to do so or cannot be provided or perfected without undue burden or expense, the provision and/or perfection of such security interests in such Collateral shall not constitute a condition precedent to the availability of any Facility on the Closing Date, but shall be required to be provided and/or perfected within 90 days after the Closing Date (or 120 days after the Closing Date for non-U.S. collateral) (and, in any event, in the case of the pledge of and perfection of security interests in collateral not otherwise required on the Closing Date, subject to extensions granted by the Administrative Agent in its reasonable discretion).

 

5.2           Conditions to Each Borrowing Date . The agreement of each Lender to make any extension of credit (other than its initial extension of credit on the Closing Date or as otherwise agreed in connection with a Limited Condition Acquisition) requested to be made by it on any date (except as otherwise provided herein in the case of Incremental Term Loans and Incremental Revolving Loans) is subject to the satisfaction of the following conditions precedent:

 

(a)           Representations and Warranties . Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (except where such representations and warranties are already qualified by materiality, in which case such representation and warranty shall be accurate in all respects) on and as of such date as if made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (except where such representations and warranties are already qualified by materiality, in which case such representation and warranty shall be accurate in all respects) as of such earlier date.

 

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(b)           No Default . No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

 

(c)           Notice . The Administrative Agent and, if applicable, the Issuing Lenders or the Swingline Lender, shall have received notice from the Borrower Representative, which, if in writing, may be in the form of a Borrowing Request.

 

Each borrowing by, and each issuance, renewal, extension, increase or amendment of a Letter of Credit on behalf of, the Revolving Borrowers hereunder shall constitute a representation and warranty by the Revolving Borrowers as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied.

 

Notwithstanding the foregoing, the conditions set forth in clauses (a) and (b) of this Section 5.2 shall be qualified during the Clean-Up Period by the provisions of Section 9.6 .

 

SECTION 6.
AFFIRMATIVE COVENANTS

 

Each Opco Borrower, UK Holdco and (solely with respect to Sections 6.1 , 6.2 , 6.3 , 6.4 , 6.6 , 6.9 , 6.11 , 6.14 , 6.16 and 6.18 ) Holdings hereby jointly and severally agree that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made) and all Letters of Credit have been canceled, have expired or have been Collateralized, each Opco Borrower, UK Holdco and (solely with respect to Sections 6.1 , 6.2 , 6.3 , 6.4 , 6.6 , 6.9 , 6.11 , 6.14 , 6.16 and 6.18 ) Holdings will, and will cause each of its Restricted Subsidiaries to:

 

6.1           Financial Statements . Furnish to the Administrative Agent (who shall promptly furnish to each Lender):

 

(a)          as soon as available, but in any event within 90 days (or, in the case of the fiscal year ending December 31, 2016, 135 days) after the last day of each fiscal year of UK Holdco ending thereafter, a copy of the audited consolidated balance sheet of UK Holdco and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year and accompanied by an opinion of PricewaterhouseCoopers LLP or other independent certified public accountants of recognized national standing, which opinion shall not be subject to qualification as to scope or contain any “going concern” qualification or exception other than with respect to or resulting from (i) the maturity of any Loans under this Agreement or the Senior Notes or (ii) any potential inability to satisfy any financial covenant on a future date or for a future period ( provided that delivery within the time periods specified above of copies of the Annual Report on Form 10-K of UK Holdco (or any direct or indirect parent company thereof) filed with the SEC (or the equivalent documents filed with a comparable agency in any applicable non-U.S. jurisdiction, provided such documents contain substantially the same information as would be set forth in a Form 10-K) shall be deemed to satisfy the requirements of this Section 6.1(a) ); and

 

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(b)          as soon as available, but in any event within 45 days (or, in the case of the fiscal quarters ending December 31, 2016, March 31, 2017 and June 30, 2017, 75 days) after the last day of the first three fiscal quarters of each fiscal year of UK Holdco, the unaudited consolidated balance sheet of UK Holdco and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as fairly stating in all material respects the financial position of UK Holdco and its consolidated Subsidiaries in accordance with GAAP for the period covered thereby (subject to normal year-end audit adjustments and the absence of footnotes) ( provided that delivery within the time periods specified above of copies of the Quarterly Report on Form 10-Q of UK Holdco (or any direct or indirect parent company thereof) filed with the SEC (or the equivalent documents filed with a comparable agency in any applicable non-U.S. jurisdiction, provided such documents contain substantially the same information as would be set forth in Form 10-Q) shall be deemed to satisfy the requirements of this Section 6.1(b) ).

 

All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and (except as otherwise provided below) in accordance with GAAP applied consistently (except to the extent any such inconsistent application of GAAP has been approved by such accountants (in the case of clause (a) above) or officer (in the case of clause (b) above), as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods (subject, in the case of quarterly financial statements, to normal year-end audit adjustments and the absence of footnotes), and all such financial statements shall include a presentation of Consolidated EBITDA and any scheduling adjustments.

 

Notwithstanding the foregoing, the obligations in Section 6.1(a) , Section 6.1(b) and Section 6.2(d) may be satisfied by furnishing, at the option of the Borrower Representative, the applicable financial statements or, as applicable, forecasts of (I) any predecessor or successor of UK Holdco or any entity meeting the requirements of clause (II) or (III) of this paragraph, (II) any other wholly-owned Restricted Subsidiary that, together with its consolidated Restricted Subsidiaries, constitutes substantially all of the assets of UK Holdco and its consolidated Subsidiaries (a “ Qualified Reporting Subsidiary ”) or (III) any Parent Holding Company, provided that to the extent such information relates to a Qualified Reporting Subsidiary or a Parent Holding Company, (x) such information is accompanied by consolidating information (which need not be audited) that explains in reasonable detail the differences between the information relating to such Qualified Reporting Subsidiary or such Parent Holding Company, on the one hand, and the information relating to UK Holdco and its Restricted Subsidiaries on a standalone basis, on the other hand and (y) solely in the case of a Qualified Reporting Subsidiary, neither such Parent Holding Company nor any Subsidiary of such Parent Holding Company (other than Holdings or such Qualified Reporting Subsidiary and its Subsidiaries) shall have any material assets or liabilities.

 

6.2           Certificates; Other Information . Furnish to the Administrative Agent (who shall promptly furnish to each Lender) or, in the case of clause (g), to the relevant Lender:

 

(a)          promptly upon the request of the Administrative Agent, in connection with the delivery of any financial statements or other information pursuant to Section 6.1 or this Section 6.2 , confirmation of whether such statements or information contains any Private Lender Information. The Borrowers and each Lender acknowledge that certain of the Lenders may be “public-side” Lenders (Lenders that do not wish to receive material non-public information with respect to the Borrowers, Holdings, their respective Subsidiaries or their securities) (the “ Public Lenders ”) and, if documents or notices required to be delivered pursuant to Section 6.1 or this Section 6.2 or otherwise are being distributed through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform (the “ Platform ”), any document or notice that Borrower Representative has indicated contains Private Lender Information shall not be posted on that portion of the Platform designated for such public-side Lenders, provided that if Borrower Representative has not indicated whether a document or notice delivered pursuant to Section 6.1 or this Section 6.2 contains Private Lender Information, the Administrative Agent reserves the right to post such document or notice solely on that portion of the Platform designated for Lenders who wish to receive material nonpublic information with respect to the Borrowers, Holdings, their respective Subsidiaries or their respective securities;

 

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(b)          concurrently with the delivery of the financial statements referred to in Section 6.1(a) , a report of the accounting firm opining on or certifying such financial statements stating that in the course of its regular audit of the financial statements of UK Holdco and its consolidated Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge that any Default insofar as it relates to the covenant set forth in Section 7.1 has occurred or, if in the opinion of such accounting firm such a Default has occurred, specifying the nature and extent thereof;

 

(c)          concurrently with the delivery of any financial statements pursuant to Section 6.1 , (i) an Officer’s Certificate of Borrower Representative stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate, (ii) (x) a Compliance Certificate containing all information and calculations reasonably necessary for determining the Applicable Margin and, to the extent that a Financial Compliance Date occurred on the last day of the period covered by such financial statements, compliance by UK Holdco with the provisions of Section 7.1 of this Agreement as of the last day of the fiscal quarter or fiscal year of UK Holdco, as the case may be (and, with respect to each annual financial statement commencing with the fiscal year of UK Holdco ending December 31, 2017, the amount, if any, of Excess Cash Flow for such fiscal year together with the calculation thereof in reasonable detail), and (y) to the extent not previously disclosed to the Administrative Agent, a description of any change in the jurisdiction of organization of any Loan Party and a list of any registered intellectual property acquired or developed (and not sold, transferred or otherwise disposed of) by any Loan Party since the date of the most recent report delivered pursuant to this clause (y) (or, in the case of the first such report so delivered, since the Closing Date), (iii) certifying a list of names of all Immaterial Subsidiaries designated as such (or certifying as to any changes to such list since the delivery of the last such certificate) and that each Subsidiary set forth on such list individually qualifies as an Immaterial Subsidiary, and (iv) certifying a list of names of all Unrestricted Subsidiaries (if any) (or certifying as to any changes to such list since the delivery of the last such certificate) and that each Subsidiary set forth on such list individually qualifies as an Unrestricted Subsidiary;

 

(d)          as soon as available, but in any event within 90 days after the last day of each fiscal year of UK Holdco (commencing with the fiscal year ending on or about December 31, 2017), a detailed consolidated budget for the following fiscal year (including (i) projected consolidated quarterly income statements and (ii) projected consolidated annual balance sheets of UK Holdco and its consolidated Subsidiaries, the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a description of the material underlying assumptions applicable thereto) (collectively, the “ Projections ”), which Projections shall be based on reasonable estimates, information and assumptions that are reasonable at the time in light of the circumstances then existing, it being understood that projections are subject to uncertainties and there is no assurance that any projections will be realized; provided that delivery of such Projections pursuant to this Section 6.2(d) shall only be required hereunder prior to an initial public offering of the Capital Stock of UK Holdco, any Qualified Reporting Subsidiary or any Parent Holding Company.

 

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(e)          simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 6.1(a) and (b) above, a narrative discussion and analysis of the financial condition and results of operations of UK Holdco and its Restricted Subsidiaries for such fiscal quarter or fiscal year, as applicable, and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter (or for the entire such fiscal year most recently ended in the case of such discussion and analysis given after the end of such fiscal year), as compared to the comparable periods of the previous year ( provided that delivery within the time periods specified above of copies of the Quarterly Report on Form 10-Q and Annual Report on Form 10-K, as applicable, of UK Holdco (or any direct or indirect parent company thereof) filed with the SEC (or the equivalent documents filed with a comparable agency in any applicable non-U.S. jurisdiction, provided such documents contain substantially the same information as would be set forth in equivalent U.S. documents) shall be deemed to satisfy the requirements of this Section 6.2(e) );

 

(f)          promptly, copies of all financial statements and reports that UK Holdco and its Restricted Subsidiaries send generally to the holders of any class of their debt securities or public equity securities, acting in such capacity, and, within five days after the same are filed, copies of all financial statements and reports that UK Holdco or any Qualified Reporting Subsidiary may make to, or file with, the SEC (or the equivalent documents filed with a comparable agency in any applicable non-U.S. jurisdiction, provided such documents contain substantially the same information as would be set forth in equivalent U.S. documents);

 

(g)          promptly following any Lender’s request therefor, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the Patriot Act;

 

(h)          to the extent equivalent conference calls are required pursuant to the terms of the Senior Notes, quarterly, at a time mutually agreed with the Administrative Agent that is promptly after the delivery of the information required pursuant to clause (a) and (b) above, participate in a conference call for Lenders to discuss the financial condition and results of operations of UK Holdco and its Subsidiaries for the most recently-ended period for which financial statements have been or were required to have been delivered; and

 

(i)          as promptly as reasonably practicable from time to time following the Administrative Agent’s request therefor, such other information regarding the operations, business affairs and financial condition of any Group Member, or compliance with the terms of any Loan Document, as the Administrative Agent may reasonably request.

 

Nothing in this Agreement or in any other Loan Document shall require any Loan Party to provide information (i) that constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure is prohibited by applicable Laws or (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product.

 

6.3           Payment of Taxes . Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its Tax obligations of whatever nature, except (i) where the failure to do so could not reasonably be expected to have a Material Adverse Effect or (ii) where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of UK Holdco or the relevant Group Member.

 

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6.4           Maintenance of Existence; Compliance with Law .

 

(a)          (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain or obtain all Governmental Approvals and all other all rights, privileges and franchises, in each case necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.8 or by the Security Documents and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(b)          comply with all Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect; and

 

(c)          comply with all Governmental Approvals except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.5           Maintenance of Property; Insurance . (a) Keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect, (b) maintain all the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect and (c) maintain with insurance companies that the Borrower Representative believes (in the good faith judgment of the management of the Borrower Representative) are financially sound and responsible at the time the relevant coverage is placed or renewed insurance in at least such amounts (after giving effect to any self-insurance which the Borrower Representative believes (in the good faith judgment of management of the Borrower Representative) is reasonable and prudent in light of the size and nature of its business) and against at least such risks (and with such risk retentions) as the Borrower Representative believes (in the good faith judgment of management of the Borrower Representative) is reasonable and prudent in light of the size and nature of its business (it being agreed that in any event flood insurance shall not be required except to the extent required by applicable Law).

 

6.6           Inspection of Property; Books and Records; Discussions . (a) Keep proper books of records and account in which entries full, true and correct in all material respects in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities and (b) permit, at the Borrowers’ expense, representatives of the Administrative Agent to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time during normal business hours, upon reasonable prior written notice, and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Company Group Members with officers and employees of the Company Group Members and with their independent certified public accountants; provided that (i) in no event shall there be more than one such visit for the Administrative Agent and its representatives as a group per calendar year except during the continuance of an Event of Default and (ii) the Company Borrowers shall have the right to be present during any discussions with accountants. Notwithstanding anything to the contrary in this Section 6.6 or Section 6.2(h) , none of the Company Group Members will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discuss any document, information or other matter that (a) constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law or any binding agreement (other than any agreement with another Company Group Member or any Affiliate thereof) or (c) is subject to attorney-client or similar privilege or constitutes attorney work product.

 

6.7           Notices . Promptly give notice to the Administrative Agent (who shall promptly furnish to each Lender) of:

 

(a)          the occurrence of any Default or Event of Default;

 

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(b)          the following events where there is any reasonable likelihood of the imposition of liability on any Company Borrower as a result thereof that could be reasonably expected to have a Material Adverse Effect, promptly and in any event within 30 days after the Borrower Representative knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan in a material amount, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan that would result in the imposition of a material withdrawal liability, or (ii) the institution of proceedings or the taking of any other action by the PBGC or any Company Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination (in other than a “standard termination” as defined in ERISA), Reorganization or Insolvency of, any Plan; and

 

(c)          any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer of the Borrower Representative setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

 

6.8           Environmental Laws .

 

(a)          Comply with, and take commercially reasonably action to ensure compliance by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply with and maintain, and take commercially reasonably action to ensure that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

(b)          Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect, and in the event that any Group Member shall fail timely to commence or cause to be commenced or fail diligently to prosecute to completion such actions, or contest such requirement in good faith as provided herein, allow the Administrative Agent (at its election) to cause such actions to be performed, and promptly pay all costs and expenses (including attorneys’ and consultants’ fees, charges and disbursements) thereof or incurred by the Administrative Agent in connection therewith.

 

6.9           Additional Collateral, etc.

 

(a)          With respect to any property (to the extent included in the definition of Collateral) acquired at any time after the Closing Date by any Loan Party (or any Group Member required to become a Loan Party pursuant to the terms of the Loan Documents) (other than (x) any property described in paragraph (b) , (c) or (d)  below and (y) any property subject to a Lien expressly permitted by clauses (6) , (8) , (9) , (12) , (16) , (17) , (18) , (27) , (30) , (36) and (39) of the definition of “Company Group Member Permitted Liens” to the extent and for so long as the obligations relating to such Liens do not permit a Lien on such property in favor of the Secured Parties) as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected (or equivalent under applicable foreign law) Lien (in each case subject to the Agreed Security Principles) within 90 days (or such longer period as the Administrative Agent shall reasonably agree) (i) execute and deliver to the Administrative Agent such amendments to the relevant Security Document or such other documents as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such property and (ii) take all actions reasonably necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected (or equivalent under applicable foreign law) first priority security interest (subject to Permitted Liens) in such property, including the filing of Uniform Commercial Code financing statements (or equivalent filings in jurisdictions outside of United States) in such jurisdictions as may be required by any Security Document or by applicable law or as may reasonably be requested by the Administrative Agent.

 

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(b)          The Borrower Representative shall ensure that the Minimum Guarantor Coverage Threshold is satisfied (i) on the date falling 90 days after the Closing Date (the “ Post-Closing Test Date ”) when tested by reference to the financial statements described in clause (b) of Section 5.1(d) and (ii) thereafter, with reference to the most recently ended fiscal period for which financial statements of UK Holdco referred to in Section 6.1(a) are required to be delivered to the Administrative Agent for that fiscal year, on the date such financial statements are required to be delivered to the Administrative Agent for that fiscal year; provided that, if on any relevant test date the Minimum Guarantor Coverage Threshold is not satisfied, such other Restricted Subsidiaries (as reasonably determined by the Borrower Representative) shall become Guarantors in accordance with Section 6.9(c) to ensure that the Minimum Guarantor Coverage Threshold is satisfied (calculated as if such additional Guarantors had been Guarantors for the purposes of the relevant test) and provided that, if the Minimum Guarantor Coverage Threshold is so satisfied within the time period set forth in Section 6.9(c) , no Default, Event of Default or other breach of this Agreement or any other Loan Document shall arise in respect thereof.

 

(c)          Subject to Section 6.15 , if applicable, within 30 days (or such longer period as the Administrative Agent shall reasonably agree) of the relevant test date under Section 6.9(b)(i) or (ii) , as the case may be, the Borrower Representative will cause each Restricted Subsidiary specified below to execute and to deliver to the Administrative Agent (1) a Guarantor Joinder Agreement, (2) subject to the Agreed Security Principles, applicable Security Documents substantially similar to other Loan Parties organized in the same jurisdiction, or, if at such time there are no other Loan Parties in such jurisdiction, in respect of substantially all of its assets (other than any Excluded Assets (except any Excluded Assets described in clauses (iv)(3), (v)(B), (xi) and/or (xiv) of the definition thereof in the case of any Restricted Subsidiary referred to in clause (c)(iii)) and any assets excluded pursuant to the Agreed Security Principles), (3) an Officer’s Certificate, in a form substantially similar to those delivered on the Closing Date and (4) if requested by the Administrative Agent, legal opinions relating to the matters described above, which opinions shall be in form and substance reasonably satisfactory to the Administrative Agent:

 

(i)          each (x) Material Restricted Subsidiary and (y) each such Material Restricted Subsidiary’s direct parent Holding Company that is a Restricted Subsidiary, provided that the Borrower Representative shall reasonably determine the order in which such Subsidiaries become Guarantors;

 

(ii)         if and solely to the extent required to satisfy the Minimum Guarantor Coverage Threshold pursuant to Section 6.9(b) , one or more Immaterial Subsidiaries (thereby causing such Immaterial Subsidiaries to become Guarantors under this paragraph (c)), provided that the Borrower Representative shall reasonably determine the order in which such Subsidiaries become Guarantors; and

 

(iii)        if and solely to the extent required to satisfy the Minimum Guarantor Coverage Threshold pursuant to Section 6.9(b) , each Restricted Subsidiary that is not an Excluded Subsidiary pursuant to any of the clauses (i) through (vi), (x), (xi)(A) and (xii) of the definition thereof; provided that the Borrower Representative shall reasonably determine the order in which such Subsidiaries become Guarantors.

 

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(d)          Notwithstanding anything to the contrary in this Agreement, (i) in no event shall control agreements or perfection by control or similar arrangements be required with respect to any Collateral (including deposit or securities accounts), other than in respect of (x) 100% of the certificated equity interests in UK Holdco, the Top Borrowers, the Co-Borrowers and material wholly-owned Restricted Subsidiaries thereof otherwise required to be pledged and (y) intercompany notes (including the notes evidencing the Tower Loans, both Loan Note Instruments and the Global Intercompany Note) and other promissory notes held by a Borrower or a Guarantor that constitute Collateral evidencing debt for borrowed money in a principal amount of at least $25,000,000; and (ii) in no event shall Collateral include any Excluded Assets unless the Borrower Representative so elects, which election shall be deemed to occur with respect to any Restricted Subsidiary that becomes a Guarantor in accordance with Section 6.9(c) , in order to satisfy the Borrower Representative’s obligations with respect to the Minimum Guarantor Coverage Threshold under Section 6.9(c) .

 

6.10         Credit Ratings . Use commercially reasonable efforts to maintain at all times a credit rating by each of S&P and Moody’s in respect of the Facilities provided for under this Agreement and a corporate rating by S&P and a corporate family rating by Moody’s for Holdings (it being understood that there shall be no requirement to maintain any specific credit rating).

 

6.11         Further Assurances . At any time or from time to time upon the reasonable request of the Administrative Agent, at the expense of the Borrowers, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent may reasonably request in order to effect fully the purposes of the Loan Documents. In furtherance and not in limitation of the foregoing, the Loan Parties shall take such actions as the Administrative Agent may reasonably request from time to time (including the execution and delivery of guaranties, security agreements, pledge agreements, stock powers, financing statements and other documents, the filing or recording of any of the foregoing, and the delivery of stock certificates and other collateral with respect to which perfection is obtained by possession, in each case to the extent required by the applicable Security Documents) to ensure that the Obligations are guaranteed by the Guarantors, on a first priority basis (subject to Permitted Priority Liens) and are secured by substantially all of the assets (other than those assets specifically excluded by the terms of this Agreement and the other Loan Documents) of the Loan Parties, in each case subject to the Agreed Security Principles.

 

6.12         Designation of Unrestricted Subsidiaries . The Borrower Representative may at any time after the Closing Date designate any Restricted Subsidiary as an Unrestricted Subsidiary and subsequently re-designate any Unrestricted Subsidiary as a Restricted Subsidiary if (i) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary that is a Receivables Subsidiary in connection with the establishment of a Qualified Receivables Financing, the Fixed Charge Coverage Ratio of UK Holdco and the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such designation or re-designation, as applicable, would have been at least 2.00 to 1.00, determined on a pro forma basis, and (ii) no Default or Event of Default has occurred and is continuing or would result therefrom. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment by the applicable Loan Party or Restricted Subsidiary therein at the date of designation in an amount equal to the fair market value of the applicable Loan Party’s or Restricted Subsidiary’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (x) the incurrence at the time of designation of Indebtedness or Liens of such Subsidiary existing at such time, and (y) a return on any Investment by the applicable Loan Party or Restricted Subsidiary in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal to the fair market value at the date of such designation of such Loan Party’s or Restricted Subsidiary’s Investment in such Subsidiary. For the avoidance of doubt, neither a Borrower nor UK Holdco shall be permitted to be an Unrestricted Subsidiary. At any time a Subsidiary is designated as an Unrestricted Subsidiary hereunder, the Borrower Representative shall cause such Subsidiary to be designated as an Unrestricted Subsidiary (or any similar applicable term) under any Indebtedness permitted under Section 7.2 that is pari passu in right of payment with the Obligations, and, in any event, any Indebtedness described in Section 7.2(b)(ii) , (iv) or (b)(vi) .

 

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6.13         Employee Benefit Plans . Maintain, and cause each Commonly Controlled Entity to maintain, all Plans that are presently in existence or may, from time to time, come into existence, in compliance with the terms of any such Plan, ERISA, the Code and all other applicable laws, except to the extent the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Maintain, or cause to be maintained, all Foreign Plans that are presently in existence or may, from time to time, come into existence, in compliance with the terms of any such Plan and all applicable laws, except to the extent the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

6.14         Use of Proceeds . The Borrowers will only use the proceeds of the Loans in accordance with Sections 4.17(d) and 4.19 .

 

6.15         Post-Closing Matters . The Borrower Representative will, and will cause each of the Restricted Subsidiaries to, take each of the actions set forth on Schedule 6.15 within the time period prescribed therefor on such schedule (as such time period may be extended by the Administrative Agent).

 

6.16         FCPA; OFAC; Sanctions . The Loan Parties agree to maintain policies, procedures, and internal controls reasonably designed to ensure compliance with the Sanctions Laws, the Export Control Laws and the applicable Anti-Corruption Laws, provided that the obligations in this Section 6.16 shall in no event be interpreted or applied in such a manner that the obligations hereunder would violate or expose any Loan Party or any of its Subsidiaries in each case resident in the United Kingdom, Luxembourg, Spain or Germany or any Secured Party resident in the European Union (or any director, officer or employee thereof) to any liability under any anti-boycott or blocking law, regulation or statute that is in force from time to time and applicable to such entity or person (including, without limitation, EU Regulation (EC) 2271/96).

 

6.17         Centre of Main Interests . No Loan Party shall do anything to change the location of its centre of main interests for the purposes of the Regulation (as defined in Section 4.21 ); provided that in respect of Loan Parties other than UK Holdco, Holdings and the Lux Company Borrower, such change of location shall be permitted if it could not be expected that such change would be materially adverse to the interests of the Lenders (taken as a whole).

 

6.18         Repayment of Tower Loans . Unless otherwise prohibited under any Tower Subordination Agreement, make payments under any Tower Term Loan Credit Agreement at times and in amounts sufficient for any Tower Borrower to make all principal payments and prepayments of the Loans, as required under this Agreement.

 

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6.19         Additional Covenants .

 

(a)          Neither the US Company Borrowers nor any other entity that is a member of a U.S. “consolidated group” (as defined in Treasury Regulation Section 1.1502-1(h)) that includes one or more of the US Company Borrowers (for purposes of this Section 6.19 , collectively, the “ Group ”) will engage in any Triggering Action, if such Triggering Action would cause the Tower LLC Loan to be recharacterized as equity under the proposed regulations under Section 385 (if not finalized, withdrawn or superseded) or, if existing at the time of such Triggering Action, under the finalized regulations, otherwise superseding proposed or temporary regulations under Section 385 or amendments to Section 385 and would cause a material amount of the Group’s interest deductions with respect to interest paid on the Tower LLC Loan to be disallowed for U.S. federal income tax purposes; provided , that for the avoidance of doubt, at any time after the U.S. federal income tax year in which the Tower LLC Loan is issued, the restrictions contained in this Section 6.19 shall not apply to, and shall not prevent the Group from taking, any action if the US Company Borrowers are first irrevocably released from all of their obligations with respect to the Tower LLC Loan in accordance with any Tower Borrower Release.

 

(b)          If (i) an Event of Default has occurred and is continuing and (ii) as a result of such Event of Default, the Lenders have a remedy pursuant to the Loan Documents, which, if exercised, would require the Group to engage in a Triggering Action and the Lenders have provided notice to the Group that the Lenders intend to exercise such remedy, then, at the written request of the Lenders, the US Company Borrowers shall be irrevocably released from all of their obligations with respect to the Tower LLC Loan in accordance with Section 11.7 prior to the Lenders exercising such remedy.

 

(c)          In the event of the finalization of the regulations under Section 385, the promulgation of temporary regulations under Section 385 or an amendment to Section 385 that, in each case, would cause a material amount of the Group’s interest deductions with respect to interest paid on the Tower LLC Loan to be disallowed for U.S. federal income tax purposes and such disallowance would not apply if the Tower LLC Loan had been issued to a third party, the US Company Borrowers shall be irrevocably released from all of their obligations with respect to the Tower LLC Loan in accordance with Section 11.7 .

 

(d)          The Foreign Loan Parties (including the FHC Tower Borrower, Tower Co, Lux Company Borrower and UK Holdco) are not subject to any restrictions pursuant to this Section 6.19 ; provided , however , that in the event Luxembourg adopts new final legislation or regulations with the effect of law after the Closing Date that are substantially similar to the proposed regulations under Section 385, such that certain triggering actions would cause the Tower Co Loan to be recharacterized as equity for Luxembourg income tax purposes, the FHC Tower Borrower will consider in good faith any actions to be taken to mitigate the likelihood of such recharacterization, including whether to cause the Lux Company Borrower to be irrevocably released from all of its obligations with respect to the Tower Co Loan in accordance with Section 11.7 .

 

(e)          In the event that the United States Treasury publishes official guidance that would exclude loans such as the Tower LLC Loan from the regulations under Section 385, the restrictions contained in this Section 6.19 shall not apply to the Tower LLC Loan.

 

(f)          UK Holdco will use its commercially reasonable efforts to maintain a listing of the Loan Note Instruments on a “recognized stock exchange” as defined in Section 1005 of the ITA 2007.

 

Section 6.A
AFFIRMATIVE COVENANTS OF THE TOWER BORROWERS

 

Each Tower Borrower hereby agrees that, until either (i) all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made) and all Letters of Credit have been canceled, have expired or have been Collateralized or (ii) the applicable Tower Borrower Release has become effective pursuant to Section 11.7 , such Tower Borrower will, and will cause its Subsidiary to:

 

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6.1.A       Information . Furnish to the Administrative Agent (who shall promptly furnish to each Lender) or, in the case of clause (b), to the relevant Lender, (a) upon request by the Administrative Agent, within 5 days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance with, or maintenance of, Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material effect on any of the Governmental Approvals or otherwise on the operations of the Group Members; (b) promptly following any Lender’s request therefor, all documentation and other in-formation that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the Patriot Act; (c) as promptly as reasonably practicable from time to time following the Administrative Agent’s request therefor, such other information regarding the operations, business affairs and financial condition of any Tower Group Member, or compliance with the terms of any Loan Document, as the Administrative Agent may reasonably request (on behalf of itself or any Lender); and (d) where applicable, a copy of the register of mortgages and charges maintained by Tower Co reflecting the details of the security granted by Tower Co under the relevant Loan Documents.

 

6.2.A       Payment of Obligations . (i) Pay, discharge or otherwise satisfy or cause to be paid, discharged or otherwise satisfied, at or before maturity or before they become delinquent, as the case may be, all of its obligations under the Tower Borrower Documents and (ii) pay, discharge or otherwise satisfy, or cause to be paid, discharged or otherwise satisfied, at or before maturity or before they become delinquent, as the case may be, all of its other material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the relevant Group Member.

 

6.3.A       Maintenance of Existence; Compliance .

 

(a)          (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain or obtain all Governmental Approvals and all other all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(b)          comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect;

 

(c)          comply with all Governmental Approvals except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(d)          maintain the US Tower Borrower’s status as a corporation for United States federal income tax purposes; and

 

(e)          cause Tower LLC to maintain its status as a disregarded entity for United States federal income tax purposes.

 

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6.4.A       Inspection of Property; Books and Records; Discussions . (a) Keep proper books of records and account in which entries full, true and correct in all material respects in conformity with all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and from which financial statements conforming with GAAP can be derived and (b) permit, at the Tower Borrower’s sole expense, representatives of the Administrative Agent to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time during normal business hours, upon reasonable prior notice, and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Tower Group Members with officers and employees of the Tower Group Members and with their independent certified public accountants; provided that (i) in no event shall there be more than one such visit for the Administrative Agent and its representatives as a group per calendar year except during the continuance of an Event of Default and (ii) the Company Borrowers shall have the right to be present during any discussions with accountants. Notwithstanding anything to the contrary in this Section 6.4.A , none of the Tower Group Members will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discuss any document, information or other matter that (a) constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law or any binding agreement (other than any agreement with another Tower Group Member or any of its Affiliates) or (c) is subject to attorney-client or similar privilege or constitutes attorney work product.

 

6.5.A       Notices . Promptly give notice to the Administrative Agent (who shall promptly furnish to each Lender) of:

 

(a)          the occurrence of any Tower Borrower Default or Tower Borrower Event of Default;

 

(b)          any (i) default or event of default under any Contractual Obligation of any Tower Group Member or (ii) litigation, investigation or proceeding that may exist at any time between any Tower Group Member and any Governmental Authority, that in either case could reasonably be expected to have a Material Adverse Effect;

 

(c)          any litigation or proceeding affecting any Tower Group Member (i) in which the amount involved is $15,000,000 or more and not covered by adequate insurance, (ii) in which injunctive or similar relief is sought which injunctive or similar relief could reasonably be expected to result in a Material Adverse Effect or (iii) which relates to any Loan Document or the Tower Transactions;

 

(d)          the following events where there is any reasonable likelihood of the imposition of liability on any Tower Borrower as a result thereof that could be reasonably expected to have a Material Adverse Effect, promptly and in any event within 30 days (or such longer time as the Administrative Agent shall reasonably agree) after the Borrower Representative knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan in a material amount, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan that would result in the imposition of a material withdrawal liability, or (ii) the institution of proceedings or the taking of any other action by the PBGC or any Tower Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination (in other than a “standard termination” as defined in ERISA), Reorganization or Insolvency of, any Plan; and

 

(e)          any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

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Each notice pursuant to this Section 6.5.A shall be accompanied by a statement of a Responsible Officer of the Borrower Representative setting forth details of the occurrence referred to therein and stating what action the relevant Tower Group Member proposes to take with respect thereto.

 

6.6.A       Additional Collateral, etc . With respect to any Collateral acquired at any time after the Closing Date by any Loan Party that is a Tower Group Member as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected Lien, within the later of (x) ninety days from the date of acquisition and (y) ten days following the end of the applicable fiscal quarter (or such longer period as the Administrative Agent shall reasonably agree), (i) execute and deliver to the Administrative Agent such amendments, joinders or supplements to the Security Agreement or such other documents as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected security interest in such property and (ii) take all actions reasonably necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected security interest (subject to Permitted Liens) in such property, including the filing of UCC financing statements and similar instruments in such jurisdictions as may be required by the Security Agreement or by law or as may be reasonably requested by the Administrative Agent (including updating the relevant register of mortgages and charges maintained by the relevant Person reflecting the details of any security granted by such Person, where applicable.

 

6.7.A       Further Assurances . At any time or from time to time upon the request of the Administrative Agent, at the expense of the Borrowers, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent may reasonably request in order to effect fully the purposes of the Loan Documents. In furtherance and not in limitation of the foregoing, the Loan Parties that are Tower Group Members shall take such actions as the Administrative Agent may reasonably request from time to time (including, without limitation, the execution and delivery of guaranties, security agreements, pledge agreements, stock powers and share transfer documents, financing statements and other documents, the filing or recording of any of the foregoing, and the delivery of stock or share certificates and other collateral with respect to which perfection is obtained by possession, in each case to the extent required by the applicable Security Documents or the applicable Tower Borrower Documents) to ensure that the Obligations are guaranteed by the Guarantors, on a first priority basis (subject to Permitted Priority Liens), and are secured by substantially all of the assets (other than those assets specifically excluded by the terms of this Agreement and the other Loan Documents) of the Loan Parties, in each case subject to the Agreed Security Principles.

 

6.8.A       Employee Benefit Plans . Maintain, and cause each Commonly Controlled Entity to maintain, all Plans that are presently in existence or may, from time to time, come into existence, in compliance with the terms of any such Plan, ERISA, the Code and all other applicable laws, except to the extent the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Maintain, or cause to be maintained, all Foreign Plans that are presently in existence or may, from time to time, come into existence, in compliance with the terms of any such Plan and all applicable laws, except to the extent the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

SECTION 7.
NEGATIVE COVENANTS

 

Each Opco Borrower, UK Holdco, (solely with respect to Sections 7.1 , 7.10 , 7.11 , 7.12 and 7.13 ) Lux Company Borrower and (solely with respect to Section 7.12 ) Holdings hereby jointly and severally agree that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made) and all Letters of Credit have been canceled, have expired or have been Collateralized, UK Holdco (solely with respect to Sections 7.1 , 7.10 , 7.11 , 7.12 and 7.13 ) Lux Company Borrower and (solely with respect to Section 7.12 ) Holdings will, and will cause the Restricted Subsidiaries to, comply with this Section 7 .

 

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7.1           Total First Lien Net Leverage Ratio . UK Holdco shall not, without the written consent of the Majority Revolving Lenders, permit the Total First Lien Net Leverage Ratio on a Pro Forma Basis as at the last day of any period of four consecutive fiscal quarters of UK Holdco commencing with the fiscal quarter ending March 31, 2017 (but only if the last day of such fiscal quarter constitutes a Financial Compliance Date) to exceed 7.50 to 1.00 or, beginning with the first fiscal quarter of Holdings of 2019, 7.00 to 1.00.

 

7.2           Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

 

(a)          (i) UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) UK Holdco will not, and will not permit any of the Restricted Subsidiaries to issue any shares of Preferred Stock; provided , however , that any of the Restricted Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and Preferred Stock, in each case if the Fixed Charge Coverage Ratio of UK Holdco and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (“ Ratio Debt ”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , however, that the aggregate amount of Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (a) by Restricted Subsidiaries that are not Guarantors, taken together with the amount of all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued by Restricted Subsidiaries that are Non-Guarantor Subsidiaries pursuant to clauses (b)(vi), (b)(xxii) and (b)(xxx) of this Section 7.2 , shall not exceed the greater of $75,000,000 and 2.00% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding.

 

(b)          The limitations set forth in Section 7.2(a) shall not apply to (collectively, “ Permitted Debt ”):

 

(i)          Indebtedness Incurred pursuant to this Agreement, any other Loan Document, any Loan Note Instrument and any Tower Loan (including any Indebtedness incurred pursuant to Section 2.25 , 2.26 or 2.28 );

 

(ii)         the Incurrence by the Lux Company Borrower and the Guarantors of Indebtedness represented by the Senior Notes (not including any additional notes) and the guarantees, as applicable (and any exchange notes and guarantees thereof);

 

(iii)        Indebtedness existing on the Closing Date (other than Indebtedness described in Section 7.2(b)(i) and (ii) ), and set forth on Schedule 7.2 ;

 

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(iv)        Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;

 

(v)         Permitted Unsecured Refinancing Debt;

 

(vi)        Indebtedness, Disqualified Stock or Preferred Stock not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as the Total First Lien Net Leverage Ratio on a Pro Forma Basis (but without giving effect to the cash proceeds remaining on the balance sheet of such Indebtedness) as of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered (calculated assuming that such Indebtedness is fully drawn throughout such period) does not exceed 4.90 to 1.00 (without giving effect to any contemporaneous borrowing under clauses (y) or (z) below), plus (y) the amount of all prior voluntary prepayments, loan buybacks and commitment reductions of Term Loans, Revolving Loans, Incremental Loans and Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) ( minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y) ), plus (z) an amount equal to the greater of $300,000,000 and 75% of Consolidated EBITDA on a Pro Forma Basis based on the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been delivered (and after giving effect to any acquisition consummated concurrently therewith) ( minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z) ) ( provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to the ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided , that:

 

(1)         the amount of Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are Non-Guarantor Subsidiaries, taken together with all other Indebtedness Incurred and Disqualified Stock and Preferred Stock issued pursuant to this proviso (1) shall not exceed the greater of $75,000,000 and 2.00% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding ( minus the amount of Indebtedness Incurred by Restricted Subsidiaries that are Non-Guarantor Subsidiaries pursuant to clauses (a), (b)(xxii) and (b)(xxx) of this Section 7.2 );

 

(2)         the Applicable Requirements shall have been satisfied;

 

(3)         no Indebtedness under this clause (vi) may be Incurred at any time that a Default or Event of Default has occurred and is continuing (unless such Indebtedness is used to finance, in whole or in part, a Limited Condition Acquisition);

 

(4)         any Indebtedness in the form of term loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the “MFN” provisions set forth in Section 2.25(a)(vii) ;

 

(5)         that any junior lien or any unsecured Indebtedness Incurred under this clause (vi) shall be treated as Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations for the purpose of calculating the Total First Lien Net Leverage Ratio pursuant to clause (x) above or Section 2.25(a)(i)(x) ;

 

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(6)         (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the Total First Lien Net Leverage Ratio will be calculated with respect to such incurrence under the clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above; and

 

(7)         unsecured Indebtedness, Disqualified Stock or Preferred Stock in an unlimited amount may be incurred at any time so long as the Total Net Leverage Ratio on a Pro Forma Basis (but without giving effect to the cash proceeds remaining on the balance sheet of such Indebtedness) as of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered (calculated assuming that such Indebtedness is fully drawn throughout such period) does not exceed 6.50 to 1.00;

 

(vii)       Indebtedness (including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by UK Holdco or any of the Restricted Subsidiaries, Disqualified Stock issued by UK Holdco or any of the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance or Refinance, all or any part of the acquisition, purchase, lease, construction, design, installation, repair, replacement or improvement of property (real or personal), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or in a Similar Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount, including all Indebtedness Incurred to renew, refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (vii), not to exceed the greater of $75,000,000 and 2.00% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding (in each case minus amounts incurred under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (vii) shall cease to be deemed Incurred or outstanding pursuant to this clause (vii) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which UK Holdco or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent UK Holdco or any of the Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification)); provided , that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (d) in connection with a Sale Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any Credit Agreement, Debt Facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;

 

(viii)      Indebtedness (x) in respect of any bankers’ acceptance, bank guarantees, discounted bill of exchange or the discounting or factoring of receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided , however , that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing;

 

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(ix)         Indebtedness arising from agreements of UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets or a Subsidiary of UK Holdco in accordance with the terms of this Agreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

 

(x)          shares of Preferred Stock of a Restricted Subsidiary issued to UK Holdco or another Wholly-Owned Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;

 

(xi)         Indebtedness or Disqualified Stock of (a) a Restricted Subsidiary to UK Holdco or (b) UK Holdco or any Restricted Subsidiary to any Restricted Subsidiary; provided that if UK Holdco or a Guarantor Incurs such Indebtedness or issues such Disqualified Stock to a Restricted Subsidiary that is not a Company Borrower or a Guarantor, such Indebtedness or Disqualified Stock, as applicable, is subordinated in right of payment to the Loans or the Guarantee of such Guarantor, as the case may be; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness or Disqualified Stock, as applicable, ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock, as applicable (except to UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock, as applicable;

 

(xii)        Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes) or in connection with the Transactions: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Agreement to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;

 

(xiii)       obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by UK Holdco or any Restricted Subsidiaries;

 

(xiv)       Indebtedness, Disqualified Stock or Preferred Stock in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xiv), does not exceed the greater of $125,000,000 and 3.25% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding (in each case minus amounts incurred under clause (xvi) in respect of Indebtedness originally incurred under this clause (xiv)) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (xiv) shall cease to be deemed Incurred or outstanding pursuant to this clause (xiv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which UK Holdco or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent UK Holdco or any of the Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));

 

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(xv)       any guarantee by UK Holdco or any of the Restricted Subsidiaries of Indebtedness or other obligations of UK Holdco or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by UK Holdco or such Restricted Subsidiary is permitted under the terms of this Agreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Loans or the Guarantee of any Guarantor, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Loans and the Guarantees, substantially to the same extent as such Indebtedness is subordinated to the Loans or any relevant Guarantees, as applicable;

 

(xvi)      the Incurrence by UK Holdco or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, Refinance, replace or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under clause (a) of this Section 7.2 and clauses (b)(i) , (b)(ii) , (b)(iii) , (b)(vi) , (b)(vii) , (b)(xiv) , (b)(xvi) , (b)(xix) , (b)(xxii) , (b)(xxvii) and (b)(xxx) , of this Section 7.2 or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or Refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest, fees and expenses, including any premium and defeasance costs in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

 

(1)         has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the shorter of (x) the Indebtedness, being refunded or Refinanced or (y) the Senior Notes;

 

(2)         has a Stated Maturity which is no earlier than the earlier of the Stated Maturity of (x) the Indebtedness being refunded or Refinanced or (y) the Senior Notes;

 

(3)         to the extent such Refinancing Indebtedness Refinances (x) Subordinated Indebtedness, such Refinancing Indebtedness is Subordinated Indebtedness, or (y) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;

 

(4)         is Incurred in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus (y) the amount necessary to pay accrued and unpaid interest, fees, underwriting discounts and expenses, including any premium and defeasance costs Incurred in connection with such Refinancing; and

 

(5)         shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that Refinances Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco; (y) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary that is not a Guarantor that Refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or (z) Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or a Restricted Subsidiary that Refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

 

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(xvii)     Indebtedness arising from (x) Cash Management Services and (y) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that, in the case of this (y), such Indebtedness is extinguished within ten Business Days of its Incurrence;

 

(xviii)    Indebtedness of UK Holdco or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to this Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

 

(xix)       Contribution Indebtedness;

 

(xx)        Indebtedness of UK Holdco or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements;

 

(xxi)       Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to UK Holdco or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

 

(xxii)      (x) Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Acquired Indebtedness of UK Holdco or any of the Restricted Subsidiaries; provided that, in either case, after giving effect to the transactions that result in the Incurrence or issuance thereof, on a pro forma basis, either (a) UK Holdco would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt or (b) the Fixed Charge Coverage Ratio of UK Holdco and its Restricted Subsidiaries would not be less than immediately prior to such transactions; provided , that the aggregate principal amount of Indebtedness Incurred or assumed by Restricted Subsidiaries which are Non-Guarantor Subsidiaries under this clause (xxii) shall not exceed the greater of $75,000,000 and 2.00% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding ( minus the amount of Indebtedness Incurred by Restricted Subsidiaries that are Non-Guarantor Subsidiaries pursuant to clauses (a),(b)(vi) and (b)(xxx) of this Section 7.2 );

 

(xxiii)     Indebtedness Incurred by UK Holdco or any Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Senior Notes (and any exchange notes or refinancing indebtedness with respect thereto);

 

(xxiv)    Guarantees (A) Incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (B) otherwise constituting Investments permitted under this Agreement;

 

(xxv)     Indebtedness issued by UK Holdco or any of the Restricted Subsidiaries to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of UK Holdco or any direct or indirect parent company of UK Holdco to the extent permitted by Section 7.3(b)(iv) ;

 

(xxvi)    Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions Incurred in the ordinary course of business of UK Holdco and the Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of UK Holdco and the Restricted Subsidiaries;

 

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(xxvii)   Indebtedness Incurred by joint ventures of Holdings or any of the Restricted Subsidiaries and Restricted Subsidiaries that are Non-Guarantor Subsidiaries, in an aggregate principal amount that does not exceed the greater of $125,000,000 and 3.25% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding (in each case minus amounts incurred under clause (xvi) in respect of Indebtedness originally incurred under this clause (xxvii) (it being understood that any Indebtedness Incurred pursuant to this clause (xxvii) shall cease to be deemed Incurred or outstanding pursuant to this clause (xxvii) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which such non-Guarantor Restricted Subsidiary or joint venture could have Incurred such Indebtedness as Ratio Debt (to the extent UK Holdco or any of the Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));

 

(xxviii)    customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;

 

(xxix)      Indebtedness Incurred pursuant to Sale Leaseback Transactions;

 

(xxx)        Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or a Restricted Subsidiary Incurred to finance or assumed in connection with an acquisition of any assets (including Capital Stock), business or Person in an aggregate principal amount or liquidation preference that does not exceed $30,000,000, at any one time outstanding (minus amounts Incurred and outstanding under (clause (xvi) in respect of Indebtedness originally Incurred under this clause (xxx)); provided , that the aggregate principal amount of Indebtedness Incurred or assumed by Restricted Subsidiaries which are Non-Guarantor Subsidiaries under this clause (xxx) shall not exceed the greater of $75,000,000 and 2.00% of Total Assets (at the time such Indebtedness is Incurred) at any one time outstanding (minus the amount of Indebtedness Incurred by Restricted Subsidiaries that are Non-Guarantor Subsidiaries pursuant to clauses (a), (b)(vi) and (b)(xxii) of this Section 7.2 ); and

 

(xxxi)      Indebtedness Incurred pursuant to any Tower Transactions and any other transactions relating to the implementation of such structure.

 

(c)          For purposes of determining compliance with this Section 7.2 , in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt or is entitled to be Incurred as Ratio Debt, the Borrower Representative shall, in its sole discretion, at the time of Incurrence, divide and/or classify, or at any later time redivide and/or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 7.2 . The Borrower Representative will also be entitled to divide, classify or reclassify an item of Indebtedness in more than one of the types of Permitted Debt described in clauses (a) and (b) of this Section 7.2 without giving pro forma effect to the Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) Incurred pursuant to clause (b) of this Section 7.2 when calculating the amount of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) that may be Incurred pursuant to clause (a) of this Section 7.2 . For the avoidance of doubt, Indebtedness Incurred under (x) clause (b)(ii) of this Section 7.2 shall be deemed to have been Incurred solely pursuant to such clause and shall not be permitted to be reclassified and (y) any subclause of clause (a)(ii) of Section 2.25 or any subclause of clause (b)(vi) of this Section 7.2 shall be deemed to have been Incurred solely pursuant to such specific subclause and shall not be permitted to be reclassified as Indebtedness Incurred under the other subclause thereof. For purposes of determining compliance with this Section 7.2 , with respect to Indebtedness Incurred, reborrowings of amounts previously repaid pursuant to “cash sweep” provisions or any similar provisions that provide that Indebtedness is deemed to be repaid daily (or otherwise periodically) shall only be deemed for purposes of this Section 7.2 to have been Incurred on the date such Indebtedness was first Incurred and not on the date of any subsequent reborrowing thereof. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 7.2 . For the avoidance of doubt, the outstanding principal amount of any particular Indebtedness shall be counted only once. Indebtedness in respect of any Tower Loan shall not be included in calculating the amount of Indebtedness of UK Holdco and any Restricted Subsidiaries outstanding at any time, and guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness, provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 7.2 .

 

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(d)          For purposes of determining compliance with any Dollar-denominated restriction on the Incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower Dollar-equivalent amount), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to Refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced.

 

7.3           Limitation on Restricted Payments .

 

(a)          UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:

 

(i)          declare or pay any dividend or make any distribution on account of UK Holdco’s or any Restricted Subsidiary’s Equity Interests, including any payment made in connection with any merger or consolidation involving UK Holdco (other than dividends, payments or distributions (A) payable solely in Equity Interests (other than Disqualified Stock) of UK Holdco or to UK Holdco and the Restricted Subsidiaries; or (B) by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, UK Holdco or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

 

(ii)         purchase or otherwise acquire or retire for value any Equity Interests of UK Holdco or any other direct or indirect parent of UK Holdco;

 

(iii)        make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Junior Indebtedness (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Junior Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under Section 7.2(b)(xi) ); or

 

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(iv)         make any Restricted Investment;

 

(all such payments and other actions set forth in clauses (i) through (iv) above, other than any of the exceptions thereto, being collectively referred to as “ Restricted Payments ”), unless at the time of such Restricted Payment:

 

(1)         no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(2)         immediately after giving effect to such transaction on a pro forma basis, a Company Borrower could Incur $1.00 of additional Indebtedness as Ratio Debt; and

 

(3)         such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by UK Holdco and the Restricted Subsidiaries after the Closing Date (including Restricted Payments permitted by clause (b)(i) , but excluding all other Restricted Payments permitted by clause (b) of this Section 7.3 ), is less than the sum of, without duplication,

 

(A) 50% of the Consolidated Net Income of UK Holdco for the period (taken as one accounting period) from October 1, 2016 to the end of UK Holdco’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

 

(B) 100% of the aggregate net proceeds, including cash and the Fair Market Value of assets other than cash, received by UK Holdco after the Closing Date from (1) the issue or sale of Equity Interests of UK Holdco or (2) the issue or sale of Equity Interests of any direct or indirect parent of UK Holdco (excluding (without duplication) any Cure Amount, the Equity Contribution, Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amount, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary or an employee stock ownership plan or trust established by UK Holdco or any of its Subsidiaries), plus

 

(C) 100% of the aggregate amount of contributions to the capital of UK Holdco received in cash and the Fair Market Value of property other than cash after the Closing Date (other than the Equity Contribution, Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and the Cash Contribution Amount, plus

 

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(D) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock, of UK Holdco or any Restricted Subsidiary thereof issued after the Closing Date (other than any Indebtedness or Disqualified Stock issued to UK Holdco or any Restricted Subsidiary) that has been converted into or exchanged for Equity Interests in UK Holdco or any direct or indirect parent of UK Holdco (other than Disqualified Stock), plus

 

(E) 100% of the aggregate amount received by UK Holdco or any Restricted Subsidiary in cash and the Fair Market Value of property other than cash received by UK Holdco or any Restricted Subsidiary from:

 

(I) the sale or other disposition (other than to UK Holdco or a Restricted Subsidiary) of Restricted Investments made by UK Holdco and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from UK Holdco and the Restricted Subsidiaries by any Person (other than UK Holdco or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (b)(vii) or (b)(x) of this Section 7.3 ),

 

(II) the sale (other than to UK Holdco or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary of Holdings, or

 

(III) any distribution or dividend from any Unrestricted Subsidiary of Holdings (to the extent such distribution or dividend is not already included in the calculation of Consolidated Net Income); plus

 

(F) in the event any Unrestricted Subsidiary of UK Holdco has been redesignated as a Restricted Subsidiary or has been merged or consolidated with or into, or transfers or conveys its assets to, or is liquidated into, UK Holdco or a Restricted Subsidiary, in each case after the Closing Date, the Fair Market Value of the Investment of UK Holdco in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with such Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clauses (b)(vii) or (b)(x) of this Section 7.3 or constituted a Permitted Investment); plus

 

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(G) the aggregate amount of Retained Declined Proceeds; plus

 

(H) $40,000,000.

 

(b)          The provisions of Section 7.3(a) will not prohibit:

 

(i)          the payment of any dividend or distribution or consummation of any redemption within 60 days after the date of declaration thereof or the giving of a redemption notice related thereto, if at the date of declaration or notice such payment would have complied with the provisions of this Agreement;

 

(ii)         (A) the redemption, repurchase, defeasance, exchange, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) of Holdings or any direct or indirect parent of UK Holdco or any Restricted Subsidiary or Junior Indebtedness of UK Holdco or any Restricted Subsidiary, in exchange for, or out of the proceeds of a sale (other than to UK Holdco or a Restricted Subsidiary) of, Equity Interests of any direct or indirect parent of UK Holdco (other than any Disqualified Stock or any Equity Interests sold to UK Holdco or any Subsidiary of UK Holdco or to an employee stock ownership plan or any trust established by UK Holdco or any of its Subsidiaries) (collectively, including any such contributions, “ Refunding Capital Stock ”); (B) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this Section 7.3(b) , the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, defease, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of UK Holdco) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement; and (C) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the sale (other than to UK Holdco or a Restricted Subsidiary) (made within 90 days of such redemption, repurchase, defeasance, exchange, retirement, or other acquisition) (other than to a Subsidiary of UK Holdco or to an employee stock ownership plan or any trust established by UK Holdco or any of its Subsidiaries) of Refunding Capital Stock;

 

(iii)        the redemption, repurchase, defeasance, exchange or other acquisition or retirement of Junior Indebtedness of UK Holdco or any Restricted Subsidiary (x) constituting Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction or (y) made by exchange for, or out of the proceeds of the sale (made within 90 days of such redemption, repurchase, defeasance, exchange, or other acquisition) of, new Indebtedness of UK Holdco or a Restricted Subsidiary that is Incurred in accordance with Section 7.2 so long as:

 

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(1)         the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Junior Indebtedness being so redeemed, repurchased, defeased, exchanged, acquired or retired for value ( plus accrued and unpaid interest, fees, underwriting discounts and expenses, including any premium and defeasance costs, required to be paid under the terms of the instrument governing the Junior Indebtedness being so redeemed, repurchased, defeased, exchanged, acquired or retired plus any fees and expenses Incurred in connection therewith, including reasonable tender premiums);

 

(2)         if such original Junior Indebtedness was subordinated to the Facilities or the related Guarantee, as the case may be, such new Indebtedness must be subordinated to the Facilities or the related Guarantee at least to the same extent as such Junior Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, exchanged, acquired or retired;

 

(3)         such Indebtedness has a final scheduled maturity date no earlier than the earlier of (x) the final scheduled maturity date of the Junior Indebtedness being so redeemed, repurchased, defeased, exchanged, acquired or retired or (y) the Latest Maturity Date; and

 

(4)         such Indebtedness has a Weighted Average Life to Maturity that is not less than the remaining Weighted Average Life to Maturity of the Junior Indebtedness being so redeemed, repurchased, defeased, acquired or retired;

 

(iv)        the purchase, retirement, redemption or other acquisition (or dividends to UK Holdco or any other direct or indirect parent of UK Holdco to finance any such purchase, retirement, redemption or other acquisition) for value of Equity Interests of any other direct or indirect parent of UK Holdco held by any future, present or former employee, director or consultant of UK Holdco or any direct or indirect parent of UK Holdco or any Subsidiary of UK Holdco or their estates or the beneficiaries of such estates pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other similar agreement or arrangement; provided , however , that the aggregate amounts paid under this clause (iv) do not exceed $20,000,000 in any calendar year, which shall increase to $30,000,000 subsequent to the consummation of an underwritten public Equity Offering by UK Holdco or any direct or indirect parent (with unused amounts in any calendar year being carried over to the next two succeeding calendar years); provided, further , however , that such amount in any calendar year may be increased by an amount not to exceed:

 

(1)         the cash proceeds received after the Closing Date by UK Holdco, any direct or indirect parent of UK Holdco and the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) to members of management, directors or consultants of UK Holdco and the Restricted Subsidiaries ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (a)(3) of this Section 7.3 ); plus

 

(2)         the cash proceeds of key man life insurance policies received after the Closing Date by UK Holdco, any direct or indirect parent of UK Holdco and the Restricted Subsidiaries;

 

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provided that the Borrower Representative may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year); in addition, cancellation of Indebtedness owing to UK Holdco or any of its Restricted Subsidiaries from any current, former or future officer, director or employee (or any permitted transferees thereof) of UK Holdco or any of the Restricted Subsidiaries (or any direct or indirect parent company thereof), in connection with a repurchase of Equity Interests of UK Holdco from such Persons will not be deemed to constitute a Restricted Payment for purposes of this Section 7.3 or any other provisions of this Agreement;

 

(v)         the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of any Company Borrower or any of the Restricted Subsidiaries and any Preferred Stock of any Restricted Subsidiaries issued or Incurred in accordance with Section 7.2 ;

 

(vi)        (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Closing Date, (B) the declaration and payment of dividends to any direct or indirect parent of UK Holdco, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of UK Holdco issued after the Closing Date; and (C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (b)(ii) of this Section 7.3 ; provided , however , that (x) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Fixed Charge Coverage Ratio of UK Holdco and the Restricted Subsidiaries would have been at least 2.00 to 1.00 and (y) the aggregate amount of dividends declared and paid pursuant to this clause (vi) does not exceed the net cash proceeds actually received by UK Holdco from any such sale of Designated Preferred Stock (other than Disqualified Stock issued after the Closing Date and securities issued in connection with the Cure Right);

 

(vii)       Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of $35,000,000 and 1.00% of Total Assets (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding;

 

(viii)      the payment of dividends on UK Holdco’s common stock (or the payment of dividends to any direct or indirect parent of UK Holdco to fund the payment by any direct or indirect parent of UK Holdco of dividends on such entity’s common stock) of up to 6.00% per annum of the net proceeds received by Holdings or any direct or indirect parent of Holdings from any public offering of common stock;

 

(ix)         Restricted Payments in an amount equal to the amount of Excluded Contributions made;

 

(x)          other Restricted Payments in an aggregate amount, taken together with all other Restricted Payments made pursuant to this clause (x), not to exceed the greater of $100,000,000 and 2.50% of Total Assets (at the time such Restricted Payment is made);

 

(xi)         the distribution, as a dividend or otherwise, of shares of Capital Stock of, or other securities of, or Indebtedness owed to, UK Holdco or a Restricted Subsidiary by, Unrestricted Subsidiaries;

 

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(xii)        any payments pursuant to a tax sharing agreement between UK Holdco and any other Person or a Restricted Subsidiary and any other Person with which UK Holdco or any Restricted Subsidiary files a consolidated tax return or with which UK Holdco or any Restricted Subsidiary is part of a group for tax purposes or any tax advantageous group contribution made pursuant to applicable legislation; provided , however , that any such tax sharing agreement or arrangement and payment does not permit or require payments in excess of the amounts of Tax that would be payable by UK Holdco or the Restricted Subsidiaries on a stand-alone basis;

 

(xiii)       the payment of dividends, other distributions or other amounts to, or the making of loans to any direct or indirect parent of UK Holdco, in the amount required for such entity to:

 

(1)         pay amounts equal to the amounts required for any direct or indirect parent of UK Holdco to pay fees and expenses (including franchise, capital stock, minimum and other similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of UK Holdco or any direct or indirect parent of UK Holdco, if applicable, and general corporate operating and overhead expenses (including legal, accounting and other professional fees and expenses) of any direct or indirect parent of UK Holdco, if applicable, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of UK Holdco, if applicable, and its Subsidiaries;

 

(2)         so long as no Event of Default has occurred and is continuing under Section 9.1(a) , pay, if applicable, amounts equal to amounts required for any direct or indirect parent of UK Holdco, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to UK Holdco or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, UK Holdco or any of the Restricted Subsidiaries Incurred in accordance with Section 7.2 ;

 

(3)         pay fees and expenses Incurred by any direct or indirect parent, other than to Affiliates of UK Holdco, related to any equity or debt offering of such parent (whether or not successful); and

 

(4)         make payments to the Sponsors (a) pursuant to the Management Agreement or any amendment thereto (so long as such amendment is not less advantageous to the Lenders, when taken as a whole, in any material respect than the Management Agreement) or (b) for any other consulting, financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, in each case to the extent permitted under Section 7.6(b)(xii) and (b)(xiii) or (c) expense reimbursement and indemnities related to clauses (a) or (b);

 

(xiv)      (i) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants and (ii) in connection with the withholding of a portion of the Equity Interests granted or awarded to a director or an employee to pay for the taxes payable by such director or employee upon such grant or award;

 

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(xv)       purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

 

(xvi)      the payment, prepayment, purchase, redemption, defeasance or other acquisition or retirement for value of any Tower Loan to the extent permitted under the Tower Borrower Documents and provided that an amount equal to the amount of such payment, prepayment, purchase, redemption, defeasance or other acquisition or retirement for value of any Tower Loan contemporaneously applied in discharge of the Obligations under the Term Loans;

 

(xvii)     the payment, purchase, redemption, defeasance or other acquisition or retirement for value of Junior Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco and the Restricted Subsidiaries in connection with a “change of control” (as defined in the documentation governing such Junior Indebtedness, Disqualified Stock or Preferred Stock) or an Asset Sale that is permitted under Section 7.5 and the other terms of this Agreement; provided that, prior to such payment, purchase, redemption, defeasance or other acquisition or retirement for value, (x) in the case of a change of control, no Event of Default shall have occurred and be continuing under Section 9.1(l) or the Commitments shall have been terminated and the full amount of all Obligations (other than contingent indemnification and reimbursement obligations for which no claim has been made) shall have been indefeasibly paid in full in cash or (y) in the case of an Asset Sale, UK Holdco (or a third party to the extent permitted by this Agreement) has applied such amounts in accordance with Section 2.11 , as the case may be;

 

(xviii)    any joint venture that is not a Restricted Subsidiary may make Restricted Payments required or permitted to be made pursuant to the terms of the joint venture arrangements to holders of its Equity Interests;

 

(xix)       any Restricted Payments made in connection with the consummation of the Transactions (including (i) any such payments made in connection with obligations set forth in the Acquisition Agreement and any transaction services agreement related thereto, in each case to effectuate the Day 2 Acquisition and (ii) dividends or distributions to any direct or indirect parent of UK Holdco to fund such payment);

 

(xx)        the payment of cash in lieu of the issuance of fractional shares of Equity Interests upon exercise or conversion of securities exercisable or convertible into Equity Interests of UK Holdco;

 

(xxi)       payments or distributions, in the nature of satisfaction of dissenters’ rights, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Agreement applicable to mergers, consolidations and transfers of all or substantially all the property and assets of UK Holdco and its Subsidiaries;

 

(xxii)      the redemption, repurchase, defeasance, exchange, retirement or other acquisition of any Junior Indebtedness of UK Holdco or any Restricted Subsidiary or any direct or indirect parent of UK Holdco (including dividends made to effectuate such redemption, repurchase, defeasance, exchange, retirement or other acquisition), taken together with all other redemptions, repurchases, defeasances, retirements or other acquisitions of any Junior Indebtedness pursuant to this clause (xxii), in an amount not to exceed $25,000,000 in the aggregate;

 

(xxiii)      unlimited Restricted Payments; provided , that the Total Net Leverage Ratio, on a Pro Forma Basis as of the most recently completed period of four consecutive fiscal quarters for which the financial statements and certificates required by Section 6.1(a) or (b) , as the case may be, have been or were required to have been delivered, does not exceed 5.25 to 1.00; and

 

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(xxiv)    any Restricted Payment made in connection with the Tower Transactions, including, but not limited to, payments made in connection with the obligations arising out of the Tower Transactions;

 

provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (b)(vi) , (b)(vii) , (b)(x) , (b)(xxii) and (b)(xxiii) of this Section 7.3 , no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

 

(c)          For purposes of this Section 7.3 , if any Investment or Restricted Payment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Borrower Representative may divide and classify such Investment or Restricted Payment in any manner that complies with this Section 7.3 and, except for clause (b)(xxiii) , may later divide and reclassify any such Investment or Restricted Payment so long as the Investment or Restricted Payment (as so divided and/or reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification. For the avoidance of doubt, the Borrower Representative may not reclassify any other Restricted Payment or Permitted Investment as having been permitted under clause (b)(xxiii) of this Section 7.3 .

 

7.4          Dividend and Other Payment Restrictions Affecting Subsidiaries . UK Holdco will not, and will not permit any Restricted Subsidiary that is not a Guarantor to, directly or indirectly create or otherwise cause to become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:

 

(a)          (i) pay dividends or make any other distributions to UK Holdco or any of the Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to UK Holdco or any of the Restricted Subsidiaries;

 

(b)          make loans or advances to UK Holdco or any of the Restricted Subsidiaries; or

 

(c)          sell, lease or transfer any of its properties or assets to UK Holdco or any of the Restricted Subsidiaries;

 

except in each case for such encumbrances or restrictions existing under or by reason of:

 

(1)         contractual encumbrances or restrictions in effect or entered into or existing on the Closing Date, including pursuant to this Agreement, Hedging Obligations and the other documents relating to the Transactions and the Tower Transactions;

 

(2)         this Agreement, the Loan Documents, the Senior Notes, any additional notes permitted to be Incurred under the Indenture and, in each case, any exchange notes and guarantees thereof;

 

(3)         applicable law or any applicable rule, regulation or order;

 

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(4)         any agreement or other instrument of a Person acquired by UK Holdco or any Restricted Subsidiary which was in existence at the time of such acquisition or at the time it merges with or into UK Holdco or any Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person and its Subsidiaries, other than the Person, or the property or assets of the Person and its Subsidiaries, so acquired or the property or assets so assumed;

 

(5)         contracts or agreements for the sale of assets, including customary restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary;

 

(6)         Indebtedness secured by a Lien that is otherwise permitted to be Incurred pursuant to Sections 7.2 and 7.7 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

 

(7)         restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(8)         customary provisions in joint venture, operating or other similar agreements, asset sale agreements and stock sale agreements in connection with the entering into of such transaction;

 

(9)         purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature described in clause (c) of this Section 7.4 on the property so acquired;

 

(10)        customary provisions contained in leases, licenses, contracts and other similar agreements entered into in the ordinary course of business (including leases or licenses of intellectual property) that impose restrictions of the type described in clause (c) of this Section 7.4 on the property subject to such lease, license, contract or agreement;

 

(11)        any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , that such restrictions apply only to such Receivables Subsidiary;

 

(12)        other Indebtedness, Disqualified Stock or Preferred Stock of UK Holdco or any Restricted Subsidiary that is Incurred subsequent to the Closing Date pursuant to Section 7.2 ; provided that either (A) such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Borrowers’ ability to make anticipated principal or interest payment on the Loans (as determined by the Borrower Representative in good faith) or (B) such encumbrances and restrictions are not materially more restrictive, taken as a whole, than those, in the case of encumbrances, outstanding on the Closing Date, and in the case of restrictions, contained in this Agreement or the Senior Notes Indenture or any Refinancing Indebtedness with respect thereto;

 

(13)        any Restricted Investment not prohibited by Section 7.3 and any Permitted Investment;

 

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(14)        arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of UK Holdco or any Restricted Subsidiary in any manner material to UK Holdco or any Restricted Subsidiary;

 

(15)        existing under, by reason of or with respect to Refinancing Indebtedness; provided that the encumbrances and restrictions contained in the agreements governing that Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being Refinanced;

 

(16)        restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which UK Holdco or any of the Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of UK Holdco or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of UK Holdco or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary; and

 

(17)        any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) of this Section 7.4 imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (16) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Borrower Representative, not materially more restrictive as a whole with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

For purposes of determining compliance with this Section 7.4 , (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to UK Holdco or a Restricted Subsidiary to other Indebtedness Incurred by UK Holdco or such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

7.5          Asset Sales . UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless:

 

(a)          UK Holdco or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Borrower Representative) of the Equity Interests issued or assets sold or otherwise disposed of;

 

(b)          immediately before and after giving effect to such Asset Sale, no Event of Default has occurred and is continuing or would result therefrom; and

 

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(c)          except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by UK Holdco or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents, provided , however , that in the case of Asset Sales involving the disposition of non-core assets (as determined by the Borrower Representative in its good faith judgment provided the value of such non-core assets does not exceed 50% of the consideration payable in connection with such acquisition) acquired as part of any acquisition after the Closing Date, only 50% of the consideration therefor must be in the form of cash or Cash Equivalents; provided, further, that the amount of:

 

(i)          any liabilities (as shown on UK Holdco’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto or, if Incurred, increased or decreased subsequent to the date of such balance sheet, such liabilities that would have been reflected in UK Holdco’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence, increase or decrease had taken place on the date of such balance sheet, as reasonably determined in good faith by the Borrower Representative) of UK Holdco or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Obligations) that are assumed by the transferee (or a third party on behalf of the transferee) of any such assets or Equity Interests pursuant to an agreement that releases or indemnifies UK Holdco or such Restricted Subsidiary (or a third party on behalf of the transferee), as the case may be, from further liability;

 

(ii)         any notes or other obligations or other securities or assets received by UK Holdco or such Restricted Subsidiary from such transferee that are converted by UK Holdco or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received);

 

(iii)        any Designated Non-cash Consideration received by UK Holdco or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of $75,000,000 and 2.00% of Total Assets, at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value);

 

(iv)        Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the extent that UK Holdco and each other Restricted Subsidiary are released from any Guarantee of such Indebtedness in connection with such Asset Sale; and

 

(v)         consideration consisting of Indebtedness of UK Holdco or any Guarantor received from Persons who are not UK Holdco or a Restricted Subsidiary,

 

shall each be deemed to be Cash Equivalents for the purposes of this Section 7.5 ;

 

After UK Holdco’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale pursuant to clauses (a) to (c) above, UK Holdco or such Restricted Subsidiary shall apply the Net Cash Proceeds from such Asset Sale if and to the extent required by Section 2.11(c) .

 

7.6          Transactions with Affiliates .

 

(a)          UK Holdco will not, and will not permit any Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of UK Holdco (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $25,000,000, unless such Affiliate Transaction is on terms that are not materially less favorable to UK Holdco or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by UK Holdco or such Restricted Subsidiary with an unrelated Person.

 

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(b)          The foregoing provisions will not apply to the following:

 

(i)          (A) transactions between or among Holdings, UK Holdco and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction), any Tower Borrower and/or any Tower Subsidiary Guarantor, (B) the Tower Transactions and any other transactions contemplated by the Tower Borrower Documents and (C) any merger or consolidation between or among UK Holdco and/or any direct parent company of UK Holdco, provided that such parent company shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of UK Holdco and such merger or consolidation is otherwise in compliance with the terms of this Agreement and effected for a bona fide business purpose; provided , that upon giving effect to such merger or consolidation, the surviving Person shall be (or shall immediately become) a Loan Party and otherwise comply with the requirements of Section 6.9 , and 100% of the Capital Stock of such surviving Person shall be pledged to the Administrative Agent in accordance with the terms of the Loan Documents;

 

(ii)         (A) Restricted Payments permitted by Section 7.3 (including any payments that are exceptions to the definition of Restricted Payments set forth in Section 7.3(a)(i) through (iv) ) and (B) Permitted Investments;

 

(iii)        transactions pursuant to compensatory, benefit and incentive plans and agreements with officers, directors, managers or employees of UK Holdco (or any direct or indirect parent thereof) or any of the Restricted Subsidiaries approved by a majority of the Board of Directors of UK Holdco in good faith;

 

(iv)        the payment of reasonable and customary fees and reimbursements paid to, and indemnity and similar arrangements provided on behalf of, former, current or future officers, directors, managers, employees or consultants of UK Holdco or any Restricted Subsidiary or any direct or indirect parent of UK Holdco;

 

(v)         transactions in which UK Holdco or any of the Restricted Subsidiaries, as the case may be, delivers to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to UK Holdco or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of this Section 7.6 ;

 

(vi)        payments, loans or advances to employees or consultants or guarantees in respect thereof (or cancellation of loans, advances or guarantees) for bona fide business purposes in the ordinary course of business;

 

(vii)       any agreement, instrument or arrangement as in effect as of the Closing Date or any transaction contemplated thereby, or any amendment thereto (so long as any such amendment is not disadvantageous to Lenders in any material respect when taken as a whole as compared to the applicable agreement as in effect on the Closing Date as reasonably determined by the Borrower Representative in good faith);

 

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(viii)      the existence of, or the performance by UK Holdco or any of the Restricted Subsidiaries of its obligations under the terms of any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date, and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided , however , that the existence of, or the performance by UK Holdco or any of the Restricted Subsidiaries of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Closing Date shall only be permitted by this clause (viii) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the Lenders in any material respect when taken as a whole as compared to the original transaction, agreement or arrangement as in effect on the Closing Date;

 

(ix)         (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement, which are fair to UK Holdco and the Restricted Subsidiaries in the reasonable determination of the Borrower Representative, and are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business;

 

(x)          any transaction effected as part of a Qualified Receivables Financing;

 

(xi)         the sale or issuance of Equity Interests (other than Disqualified Stock) of UK Holdco to Holdings (or a successor direct parent of UK Holdco) in each case, subject to compliance with the requirements of Section 6.9(d) ;

 

(xii)        the payment of annual management, consulting, monitoring and advisory fees to the Sponsors pursuant to the Management Agreement in an aggregate amount in any fiscal year not to exceed the greater of $3,000,000 and 1.00% of Consolidated EBITDA on a Pro Forma Basis based on the most recently completed period of four consecutive fiscal quarters for which internal financial statements are available immediately preceding the date on which such payment is made, plus all reasonable out-of-pocket expenses Incurred by the Sponsors or any of their Affiliates in connection with the performance of management, consulting, monitoring, advisory or other services with respect to UK Holdco and the Restricted Subsidiaries, plus any applicable termination fee paid pursuant to such Management Agreement;

 

(xiii)       payments by UK Holdco or any of the Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to agreements with the Sponsors as in effect on the Closing Date or (y) approved by a majority of the Board of Directors of UK Holdco or any direct or indirect parent of UK Holdco in good faith;

 

(xiv)      any contribution to the capital of UK Holdco or any Restricted Subsidiary;

 

(xv)       transactions permitted by, and complying with, the provisions of Section 7.5 or Section 7.8 ;

 

(xvi)      [reserved];

 

(xvii)     pledges of Equity Interests of Unrestricted Subsidiaries;

 

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(xviii)    any employment agreements, option plans and other similar arrangements entered into by UK Holdco or any of the Restricted Subsidiaries with employees or consultants in the ordinary course of business;

 

(xix)       the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of UK Holdco or any direct or indirect parent of UK Holdco or of a Restricted Subsidiary, as appropriate, in good faith;

 

(xx)        the entering into of any tax sharing agreement or arrangement and any payments permitted by Section 7.3(b)(xii) or, with respect to franchise or similar Taxes, by Section 7.3(b)(xiii)(1) ;

 

(xxi)       transactions to effect the Transactions and the Tower Transactions and the payment of all fees and expenses related to the Transactions and the Tower Transactions;

 

(xxii)      any employment, consulting, service or termination agreement, or customary indemnification arrangements, entered into by UK Holdco or any of the Restricted Subsidiaries with current, former or future officers and employees of UK Holdco or any of its Restricted Subsidiaries and the payment of compensation to officers and employees of UK Holdco or any of its respective Restricted Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), in each case in the ordinary course of business;

 

(xxiii)     transactions with a Person that is an Affiliate of UK Holdco solely because UK Holdco, directly or indirectly, owns Equity Interests in, or controls, such Person entered into in the ordinary course of business;

 

(xxiv)    transactions with Affiliates solely in their capacity as holders of Indebtedness or Equity Interests of UK Holdco or any of its Subsidiaries, so long as such transaction is with all holders of such class (and there are such non-Affiliate holders) and such Affiliates are treated no more favorably than all other holders of such class generally;

 

(xxv)     any agreement that provides customary registration rights to the equity holders of UK Holdco or any direct or indirect parent of UK Holdco and the performance of such agreements;

 

(xxvi)    payments to and from and transactions with any joint venture in the ordinary course of business; provided such joint venture is not controlled by an Affiliate (other than a Restricted Subsidiary) of UK Holdco;

 

(xxvii)   transactions between UK Holdco or any of its Restricted Subsidiaries and any Person that is an Affiliate thereof solely due to the fact that a director of such Person is also a director of UK Holdco or any direct or indirect parent of UK Holdco; provided , however , that such director abstains from voting as a director of UK Holdco or such direct or indirect parent of UK Holdco, as the case may be, on any matter involving such other Person; and

 

(xxviii)  transactions with any Day 2 Subsidiary and with any entity that owns Day 2 Assets or Day 2 Liabilities (as such transaction relates to such Day 2 Assets or Day 2 Liabilities), in each case until such time as such Day 2 Subsidiary, Day 2 Asset or Day 2 Liability is acquired by UK Holdco or one of its Restricted Subsidiaries.

 

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7.7          Liens . UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, create or Incur any Lien (other than Permitted Liens) that secures obligations under any Indebtedness on any asset or property of UK Holdco or any Restricted Subsidiary.

 

7.8          Fundamental Changes . UK Holdco will not, nor will it permit any of the Restricted Subsidiaries to, directly or indirectly merge, dissolve, liquidate, amalgamate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, (other than in the case of clause (e) below) so long as no Event of Default would result therefrom:

 

(a)          (i) any Restricted Subsidiary (other than any Opco Borrower) may merge, amalgamate or consolidate with (1) any US Company Borrower (including a merger, the purpose of which is to reorganize such US Company Borrower into a new jurisdiction in any State of the United States); provided that such US Company Borrower shall be the continuing or surviving Person or the surviving Person shall expressly assume the obligations of such US Company Borrower pursuant to documents reasonably acceptable to the Administrative Agent, (2) the Lux Company Borrower; provided that the Lux Company Borrower shall be the continuing or surviving Person, or (3) any one or more other Restricted Subsidiaries and (ii) any Opco Borrower may merger, amalgamate or consolidate with any other Opco Borrower; provided that if the surviving Person is not Lux Company Borrower such surviving Person shall be subject to Section 7.12(c) ; provided that (y) when any Revolver Co-Borrower is merging, amalgamating or consolidating with another Restricted Subsidiary that is not another Revolver Co-Borrower or a Loan Party then either (A) the Revolver Co-Borrower shall be the continuing or surviving Person and resident in its jurisdiction of incorporation or (B)(I) the Revolver Co-Borrower shall cease to be a Borrower under this Agreement in accordance with Section 12.3 , (II) to the extent constituting an Investment, such Investment must be a Permitted Investment or Indebtedness of a Restricted Subsidiary which is not a Loan Party in accordance with Section 7.2, respectively, and (III) to the extent constituting a Disposition, such Disposition must be permitted hereunder and (z) when any Guarantor is merging with another Restricted Subsidiary that is not a Loan Party (A) the Guarantor shall be the continuing or surviving Person, (B) to the extent constituting an Investment, such Investment must be a Permitted Investment or Indebtedness of a Restricted Subsidiary which is not a Loan Party in accordance with Section 7.2 , respectively and (C) to the extent constituting a Disposition, such Disposition must be permitted hereunder;

 

(b)          (i) any Restricted Subsidiary that is not a Loan Party may merge, amalgamate or consolidate with or into any other Restricted Subsidiary that is not a Loan Party and (ii) any Restricted Subsidiary may liquidate or dissolve, or any Borrower or any Restricted Subsidiary may (if the validity, perfection and priority of the Liens securing the Obligations is not adversely affected thereby) change its legal form if the Borrower Representative determines in good faith that such action is in the best interest of UK Holdco and its Subsidiaries and is not disadvantageous to the Lenders in any material respect (it being understood that in the case of any dissolution of a Restricted Subsidiary that is (A) a Revolver Co-Borrower, such Subsidiary shall at or before the time of such dissolution cease to be a Revolver Co-Borrower under this Agreement in accordance with Section 12.3 or (B) a Guarantor, such Subsidiary shall at or before the time of such dissolution transfer its assets to another Restricted Subsidiary that is a Guarantor in the same jurisdiction or a different jurisdiction reasonably satisfactory to the Administrative Agent unless such Disposition of assets is permitted hereunder; and in the case of any change in legal form, a Restricted Subsidiary that is a Revolver Co-Borrower or a Guarantor will remain a Revolver Co-Borrower or Guarantor unless such Revolver Co-Borrower or Guarantor is otherwise permitted to cease being a Revolver Co-Borrower or Guarantor hereunder);

 

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(c)          any Restricted Subsidiary (other than any Opco Borrower) may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any Company Borrower or to any Restricted Subsidiary; provided that if the transferor in such a transaction is (A) a Revolver Co-Borrower, then such Subsidiary shall cease to be a Revolver Co-Borrower under this Agreement in accordance with Section 11.03 or (B) a Guarantor, then (i) the transferee must either be a Borrower or a Guarantor in the same jurisdiction or a different jurisdiction reasonably satisfactory to the Administrative Agent and (ii) to the extent constituting an Investment, such Investment must be a Permitted Investment or Indebtedness of a Restricted Subsidiary which is not a Loan Party in accordance with Section 7.2 , respectively; provided , further , that any US Company Borrower may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any other Loan Party that is a US Subsidiary;

 

(d)          any Restricted Subsidiary (other than any Company Borrower) may merge, amalgamate or consolidate with, or dissolve into, any other Person in order to effect Permitted Investment; provided that (i) the continuing or surviving Person shall, to the extent subject to the terms hereof, have complied with the requirements of Section 6.9 , (ii) to the extent constituting an Investment, such Investment must be a Permitted Investment, (iii) to the extent constituting a Disposition, such Disposition must be permitted hereunder and (iv) to the extent such Restricted Subsidiary is a Revolver Co-Borrower, it shall cease to be a Revolver Co-Borrower in accordance with Section 12.3 ;

 

(e)          UK Holdco, the Borrowers and the other Restricted Subsidiaries may consummate the Transactions;

 

(f)          subject to clause (a) above, any Restricted Subsidiary (excluding any Company Borrower other than any US Company Borrower) may merge, dissolve, liquidate, amalgamate, consolidate with or into another Person in order to effect a Disposition permitted pursuant to Section 7.5 ; provided that if such Restricted Subsidiary is a Revolver Co-Borrower, it shall cease to be a Revolver Co-Borrower in accordance with Section 12.3 ; and

 

(g)          any Permitted Investment may be structured as a merger, consolidation or amalgamation,

 

provided , in each case, that if any asset subject to a disposal or transfer to, or merger, amalgamation or consolidation with, or dissolution into, any other Loan Party pursuant to this Section 7.8 is subject to a Lien created by any Security Document at the time of such disposal or transfer to, or merger, amalgamation or consolidation with, or dissolution into, any other Person, it shall be disposed of or transferred on the basis that it shall remain subject to, or otherwise become subject to equivalent, Liens under a Security Document immediately following such disposal (subject to the Agreed Security Principles).

 

7.9         [ Reserved ].

 

7.10        Changes in Fiscal Periods . UK Holdco will not permit the fiscal year of UK Holdco to end on a day other than December 31 or change UK Holdco’s method of determining fiscal quarters.

 

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7.11        Negative Pledge Clauses . UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of UK Holdco or any Group Member to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan Documents to which it is a party other than (a) this Agreement and the other Loan Documents, (b) any agreements evidencing or governing any purchase money Liens or Capitalized Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) customary restrictions on the assignment of leases, licenses and contracts entered into in the ordinary course of business, (d) any agreement in effect at the time any Person becomes a Restricted Subsidiary; provided that such agreement was not entered into in contemplation of such Person becoming a Restricted Subsidiary, (e) customary restrictions and conditions contained in agreements relating to the sale of a Restricted Subsidiary (or the assets of a Restricted Subsidiary) pending such sale; provided that such restrictions and conditions apply only to the Restricted Subsidiary that is to be sold (or whose assets are to be sold) and such sale is permitted hereunder), (f) restrictions and conditions existing on the Closing Date and any amendments or modifications thereto so long as such amendment or modification does not expand the scope of any such restriction or condition in any material respect, (g) restrictions under agreements evidencing or governing or otherwise relating to Indebtedness of Non-Guarantor Subsidiaries permitted under Section 7.2 ; provided that such Indebtedness is only with respect to the assets of Non-Guarantor Subsidiaries and (h) customary provisions in joint venture agreements, limited liability company operating agreements, partnership agreements, stockholders agreements and other similar agreements.

 

7.12        Lines of Business; Holding Company; Lux Company Borrower .

 

(a)          Holdings and UK Holdco will not, and will not permit any of the Restricted Subsidiaries to, enter into any business, either directly or through any Restricted Subsidiary, except for those businesses in which UK Holdco and the Restricted Subsidiaries are engaged on the Closing Date or that are reasonably related, complementary, required or ancillary thereto and reasonable extensions thereof. UK Holdco will not issue any Capital Stock other than to Holdings.

 

(b)          Holdings shall not incur any material liabilities, own any material assets or conduct, transact or otherwise engage in any material business or operations; provided , that the following shall be permitted in any event: (i) Holdings’ ownership of the Equity Interests of UK Holdco and activities incidental thereto, (ii) the entry into, and the performance of its obligations with respect to the Loan Documents and other Indebtedness that has been guaranteed by, or is otherwise considered Indebtedness of, any Company Borrower or any of the Restricted Subsidiaries Incurred in accordance with Section 7.2 ; (iii) the consummation of the Transactions; (iv) the performing of activities (including, without limitation, cash management activities) and the entry into documentation with respect thereto, in each case, permitted by this Agreement for Holdings to enter into and perform; (v) the payment of dividends and distributions (and other activities in lieu thereof permitted by this Agreement), the making of contributions to the capital of its Subsidiaries and Guarantees of Indebtedness permitted to be incurred hereunder and the Guarantees of other obligations not constituting Indebtedness; (vi) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance and performance of activities relating to its officers, directors, managers and employees and those of its Subsidiaries); (vii) the performing of activities in preparation for and consummating any public offering of its common stock or any other issuance or sale of its Equity Interests (other than Disqualified Stock) including converting into another type of legal entity; (viii) the participation in Tax, accounting and other administrative matters as a member of any consolidated or similar group including UK Holdco, including compliance with applicable Laws and legal, Tax and accounting matters related thereto and activities relating to its officers, directors, managers and employees; (ix) the holding of any cash and Cash Equivalents (but not operating any property); (x) the entry into and performance of its obligations with respect to contracts and other arrangements, including the providing of indemnification to officers, managers, directors and employees; (xi) establishing and maintaining bank accounts; (xii) guaranteeing ordinary course obligations incurred by any of the Restricted Subsidiaries; (xiii) engaging in any activities incidental to compliance with the provisions of the Securities Act and the Exchange Act and similar laws and regulations of other jurisdictions and the rules of securities exchanges, in each case, as applicable to companies with listed equity or debt securities, as well as activities incidental to investor relations, shareholder meetings and reports to shareholders or debt-holders; and (xiv) any activities incidental to the foregoing. Holdings shall not create, incur, assume or suffer to exist any Lien on any Equity Interests of UK Holdco, any Company Borrower or any Restricted Subsidiary or any other assets of Holdings (other than Liens on such Equity Interests or assets pursuant to any Loan Document and non-consensual Liens arising solely by operation of Law). Holdings will cause UK Holdco to, and UK Holdco will, at all times remain a Wholly Owned Subsidiary of Holdings.

 

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(c)          The Lux Company Borrower (and any successor permitted under Section 7.6(b) and Section 7.8(a) ) shall not incur any material liabilities, own any material assets or conduct, transact or otherwise engage in any material business or operations; provided, that the following shall be permitted in any event: (i) the entry into, and the performance of its obligations with respect to the Tower Co Loan, (ii) the entry into, and the performance of its obligations under and with respect to the Loan Documents, the Senior Notes Indenture and related Documents, the Tower Security Documents and documentation relating to any refinancing Indebtedness; (iii) the entry into, and the performance of its obligations under the Loan Note Instruments; (iv) the consummation of the Transactions; (v) the performing of activities (including, without limitation, cash management activities) and the entry into documentation with respect thereto, in each case, specifically and expressly contemplated by this Agreement for Lux Company Borrower to enter into and perform or incidental to such performance; (vi) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance and performance of activities relating to its officers, directors, managers and employees); (vii) the participation in Tax, accounting and other administrative matters as a member of any consolidated or similar group including Holdings, including compliance with applicable Laws and legal, Tax and accounting matters related thereto and activities relating to its officers, directors, managers and employees; (viii) the holding of any cash and Cash Equivalents (but not operating any property); (ix) the entry into and performance of its obligations with respect to contracts and other arrangements, including the providing of indemnification to officers, managers, directors and employees; (x) establishing and maintaining bank accounts (and granting security, charges and other liens thereon to secure the Obligations); (xi) engaging in any activities incidental to compliance with the provisions of the Securities Act and the Exchange Act and similar laws and regulations of other jurisdictions and the rules of securities exchanges, in each case, as applicable to companies with listed equity or debt securities, as well as activities incidental to investor relations, shareholder meetings and reports to shareholders or debt-holders; and (xii) any activities incidental to the foregoing. Lux Company Borrower shall not create, incur, assume or suffer to exist any Liens on any assets of Lux Company Borrower (other than Liens on such Equity Interests or assets pursuant to any Loan Document or the Tower Borrower Documents and non-consensual Liens arising solely by operation of Law).

 

(d)          The Lux Company Borrower shall not (i) issue any Capital Stock (other than to UK Holdco) or (ii) undertake any action that will require the Issuer to register as an ‘‘investment company’’ or an entity ‘‘controlled by an investment company’’ as defined in the US Investment Company Act of 1940, as amended and the rules and regulations thereunder.

 

(e)          UK Holdco shall cause the Lux Company Borrower to, and the Lux Company Borrower shall, at all times remain a Wholly Owned Restricted Subsidiary of UK Holdco.

 

(f)          For so long as any Commitments are outstanding, UK Holdco will not, and will not permit any of its Restricted Subsidiaries to, commence or take any action to facilitate a winding-up, liquidation or other analogous proceeding in respect of the Lux Company Borrower.

 

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7.13        Amendments to Organizational Documents . UK Holdco will not, and will not permit any Restricted Subsidiary to, terminate or agree to any amendment, supplement, or other modification of (pursuant to a waiver or otherwise), or waive any of its rights under, any Organizational Documents of UK Holdco or any Restricted Subsidiary, if, in light of the then-existing circumstances, a Material Adverse Effect would be reasonably likely to exist or result after giving effect to such termination, amendment, supplement or other modification or waiver, except, in each case, as otherwise permitted by the Loan Documents.

 

Section 7.A
NEGATIVE COVENANTS OF THE TOWER BORROWERS

 

Each Tower Borrower hereby agrees that, (i) until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made) and all Letters of Credit have been canceled, have expired or have been Collateralized or (ii) the applicable Tower Borrower Release has become effective pursuant to Section 11.7 , such Tower Borrower will not, and will not permit its Subsidiary to, directly or indirectly:

 

7.1.A      Indebtedness . Incur any Indebtedness, except:

 

(a)         (i) Indebtedness of any Tower Borrower (and Guarantee Obligations of any Tower Group Member in respect thereof) pursuant to any Loan Document or as a co-borrower or co-obligor in respect of Indebtedness incurred by any Company Borrower pursuant to Section 7.2(a) or Section 7.2(b)(iv) , (v) , (vi) or (xxii) , and refinancings thereof in accordance with Section 7.2(b)(xvi) and (ii) Guarantee Obligations of any Tower Group Member with respect to Indebtedness permitted to be incurred pursuant to the clauses of Section 7.2(b) expressly enumerated in clause (i) hereof.

 

(b)         Indebtedness of (w) Tower LLC to the US Tower Borrower, (x) US Tower Borrower to Tower LLC, (y) Tower Co to the FHC Tower Borrower and (z) FHC Tower Borrower to the Tower Co;

 

(c)          Indebtedness of any Tower Borrower and its Subsidiaries in respect of Swap Agreements permitted by Section 7.10.A ;

 

(d)          intercompany Indebtedness permitted pursuant to Section 7.2(b)(xii) ; and

 

(e)          Contribution Indebtedness in respect of the capital of any Tower Borrower.

 

7.2.A      Liens . Incur any Lien upon any of its property, whether now owned or hereafter acquired, except the following (herein referred to as the “Tower Group Member Permitted Liens”):

 

(a)          Liens for Taxes (i) not yet delinquent or (ii) that are being contested in good faith by appropriate proceedings and for which adequate reserves with respect thereto are maintained on the books of any Tower Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

 

(b)          Liens created pursuant to the Loan Documents;

 

(c)          Liens on Indebtedness to the extent such Liens are permitted to exist with respect to Indebtedness permitted to be incurred under Section 7.1.A(a) (inclusive of cross-referenced provisions set forth therein);

 

(d)          Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection; and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry; and

 

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(e)          bankers’ Liens, rights of setoff and similar Liens existing solely with respect to Cash Equivalents on deposit in one or more accounts maintained by any Tower Group Member, in each case granted in the ordinary course of business in favor of the bank or banks which such accounts are maintained, securing amounts owing to such bank with respect to cash management or other account arrangements, including those involving pooled accounts and netting arrangements, provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness.

 

7.3.A      Fundamental Changes . Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, except in connection with a Tower Borrower Release.

 

7.4.A      Disposition of Property . Dispose of any of its property, whether now owned or hereafter acquired, or issue or sell any shares of Capital Stock to any Person, other than (i) the issuance, sale or other Disposition of Capital Stock to (x) in the case of any Subsidiary of any Tower Borrower, a Tower Group Member and (y) in the case of the Tower Borrowers, the Sponsors and its Affiliates so long as such Capital Stock is Qualified Equity Interests and (ii) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement and the other Loan Documents.

 

7.5.A      Restricted Payments . Declare or pay any Restricted Payment, other than Restricted Payments or returns of capital paid to any Tower Borrower or any Tower Subsidiary Guarantor.

 

7.6.A      Consolidated Capital Expenditures . Make any Capital Expenditures.

 

7.7.A      Investments . Make any Investments, except:

 

(a)          Investments in Cash Equivalents;

 

(b)          Investments by Tower LLC in the US Company Borrowers evidenced by the Tower LLC Loans;

 

(c)          Investments by the US Tower Borrower in Tower LLC;

 

(d)          Investments by Tower Co in the Lux Company Borrower evidenced by the Tower Co Loans;

 

(e)          Investments by the FHC Tower Borrower in Tower Co;

 

(f)          Investments in the ordinary course of business consisting of endorsements of negotiable instruments for collection or deposit;

 

(g)          intercompany Indebtedness permitted by Section 7.1.A(b) and (d) ;

 

(h)          Investments permitted by Section 7.10.A ; and

 

(i)          Investments made pursuant to the investment policy of any Tower Borrower, as disclosed to the Administrative Agent prior to the date hereof and amended from time to time; provided that any prior material amendments to such investment policies shall be subject to the written consent of the Administrative Agent.

 

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7.8.A      Transactions with Affiliates . Directly or indirectly, enter into or permit to exist any Affiliate Transaction, except (a) transactions between or among the Group Members, (b) transactions that are on terms and conditions not less favorable to such Tower Group Member as would be obtainable by such Tower Group Member at the time in a comparable arm’s-length transaction from unrelated third parties that are not Affiliates, (c) any Restricted Payment permitted by Section 7.5.A , (d) any transaction permitted by Section 7.1.A , Section 7.2.A(b) , Section 7.2.A(c) , Section 7.3.A and Section 7.7.A(b) , (e) transactions relating to any Tower Borrower Release and (f) capital contributions made to any Tower Borrower, or by any Tower Borrower or any of its Subsidiaries to any Subsidiary of such Tower Borrower utilizing the proceeds (directly or indirectly) of a capital contribution to such Tower Borrower.

 

7.9.A      Swap Agreements . Enter into any Swap Agreement, except Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any actual or reasonably anticipated interest bearing liability or investment of any Tower Borrower or any Tower Subsidiary Guarantor.

 

7.10.A    Lines of Business . Engage in any business or activity other than (i) the ownership of all outstanding Capital Stock in and Indebtedness of Tower LLC and Tower Co, (ii) maintaining its corporate existence, (iii) the performance of obligations under the Loan Documents to which it is a party, (iv) the Tower Transactions, (v) receiving payments and contributions and making payments, by way of distribution, dividend or otherwise, to any Person of any amount as permitted by this Agreement, (vi) with respect to the Tower Borrowers only, participating in Tax, accounting and other administrative activities as the parent of the consolidated group of companies including the other Tower Group Members, (vii) Incurring Indebtedness permitted under Section 7.1.A and making Investments permitted by Section 7.7.A , (viii) establishing and maintaining bank accounts, (ix) entering into employment arrangements with officers and directors and (x) activities incidental to the businesses or activities described in clauses (i)-(ix), as applicable.

 

7.11.A    Other Agreements . Enter into any contract or agreement other than in connection with, arising out of or reasonably related to the Tower Transactions, the Loan Documents and Swap Agreements permitted by Section 7.1.A(c) , any Tower Borrower Release and other loan documentation permitted by Section 7.1.A .

 

7.12.A    Amendments to Certain Agreements . Terminate or agree to any amendment, supplement, or other modification of (pursuant to a waiver or otherwise), or waive any of its rights under (i) the Tower LLC Term Loan Credit Agreement, (ii) the Tower Co Term Loan Credit Agreement, (iii)  the Tower LLC Subordination Agreement, (iv) the Tower Co Subordination Agreement or (v) any organizational documents of any of the Tower Group Members, if (x) such termination, amendment, supplement or other modification or waiver, in light of the then existing circumstances at the time such termination, amendment, supplement or other modification or waiver is entered into, taken as a whole, could reasonably be expected to be materially adverse to the Company Group Members, taken as a whole, or the Administrative Agent, any Lender or any other Secured Party or (y) a Material Adverse Effect would be reasonably likely to exist or result after giving effect to such termination, amendment, supplement or other modification.

 

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SECTION 8.
GUARANTEE

 

8.1          The Guarantee . (a) Each Tower Guarantor hereby jointly and severally guarantees, as a primary obligor and not as a surety, to each Secured Party and their respective successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of (1) the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of the Bankruptcy Code after any bankruptcy or insolvency petition under the Bankruptcy Code or any similar law of any other jurisdiction) on (i) the Loans made by the Lenders to, and the Notes held by each Lender of, any Tower Borrower, (ii) the Incremental Term Loans or Incremental Revolving Loans made by the Incremental Term Lenders or Incremental Revolving Lenders to any Tower Borrower, (iii) the Other Term Loans or Other Revolving Loans made to any Tower Borrower by any lender thereof and (2) all other Obligations from time to time owing to the Secured Parties by any Tower Borrower (such obligations under clauses (1) and (2) being herein collectively called the “ Tower Guaranteed Obligations ”). Each Tower Guarantor hereby jointly and severally agrees that, if any Tower Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Tower Guaranteed Obligations, such Tower Guarantor will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Tower Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

(b)          Each Company Guarantor hereby jointly and severally guarantees, as a primary obligor and not as a surety, to each Secured Party and their respective successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of (1) the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of the Bankruptcy Code after any bankruptcy or insolvency petition under the Bankruptcy Code or any similar law of any other jurisdiction) on (i) the Loans made by the Lenders to any Opco Borrower, (ii) the Incremental Loans made by the Incremental Term Lenders or Incremental Revolving Lenders to any Opco Borrower, (iii) the Other Term Loans and Other Revolving Loans made by any lender thereof, and (iv) the Notes held by each Lender of any Opco Borrower and (2) all other Obligations from time to time owing to the Secured Parties by any Opco Borrower (such obligations under clauses (1) and (2) being herein collectively called the “ Company Guaranteed Obligations ” and, together with the Tower Guaranteed Obligations, the “ Guarantor Obligations ”). Each Company Guarantor hereby jointly and severally agrees that, if any Opco Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Company Guaranteed Obligations, such Company Guarantor will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Company Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

8.2          Obligations Unconditional .

 

(a)          The obligations of the Guarantors under Section 8.1 , respectively, shall constitute a guaranty of payment (and not of collection) and to the fullest extent permitted by applicable Requirements of Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of (i) in the case of the Tower Guarantors, the Tower Guaranteed Obligations of the Tower Borrowers under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Tower Guaranteed Obligations and (ii) in the case of the Company Guarantors, the Company Guaranteed Obligations under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Company Guaranteed Obligations, and, in each case, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety by any Tower Guarantor or any Company Guarantor, as applicable (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall, in each case, remain absolute, irrevocable and unconditional under any and all circumstances as described above:

 

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(i)          at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Guarantor Obligations shall be extended, or such performance or compliance shall be waived;

 

(ii)         any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;

 

(iii)        the maturity of any of the Guarantor Obligations shall be accelerated, or any of the Guarantor Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guarantor Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

 

(iv)        any Lien or security interest granted to, or in favor of, the Issuing Lenders or any Lender or the Administrative Agent as security for any of the Guarantor Obligations shall fail to be valid or perfected or entitled to the expected priority;

 

(v)         the release of any other Guarantor pursuant to Section 8.9 , 10.10 or otherwise; or

 

(vi)        except for the payment in full of the Guarantor Obligations, any other circumstance whatsoever which may or might in any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Guarantor Obligations or which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower or any Guarantor for the Guarantor Obligations, or of such Guarantor under the Guarantee or of any security interest granted by any Guarantor, whether in a proceeding under any Debtor Relief Law or in any other instance.

 

(b)          Each of the Guarantors hereby expressly waives diligence, presentment, demand of payment, marshaling, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against any Tower Borrower or any Opco Borrower, as the case may be, under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guarantor Obligations. Each of the Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guarantor Obligations and notice of or proof of reliance by any Secured Party upon the guarantee made under this Section 8 (this “ Guarantee ”) or acceptance of the Guarantee, and the Guarantor Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon the Guarantee, and all dealings between the Tower Borrowers and the Secured Parties and between the Opco Borrowers and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon the Guarantee. The Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guarantor Obligations at any time or from time to time held by the Secured Parties and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time of any right or remedy against any Tower Borrower or any Opco Borrower or against any other person which may be or become liable in respect of all or any part of the Guarantor Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. The Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the applicable Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guarantor Obligations outstanding.

 

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8.3          Reinstatement . The obligations of the Guarantors under this Section 8 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Tower Borrowers, the Opco Borrowers or any other Loan Party in respect of the Guarantor Obligations is rescinded or must be otherwise restored by any holder of any of the Guarantor Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

 

8.4          No Subrogation . Each Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guarantor Obligations (other than contingent indemnification and reimbursement obligations for which no claim has been made) and the expiration and termination of the Commitments under this Agreement, it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its Guarantee, whether by subrogation, right of contribution or otherwise, against any Tower Borrower or any Opco Borrower, as applicable, or any other Guarantor of any of the Guarantor Obligations or any security for any of the Guarantor Obligations.

 

8.5          Remedies . Each Guarantor jointly and severally agrees that, as between the Guarantors and the Lenders, the obligations of each Borrower under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as provided in Section 9 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 9 ) for purposes of Section 8.1 , notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against any Borrower or any Guarantor and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable, or the circumstances occurring where Section 9 provides that such obligations shall become due and payable), such obligations (whether or not due and payable by any Tower Borrower and/or any Opco Borrower, as applicable) shall forthwith become due and payable by the Guarantors for purposes of Section 8.1 .

 

8.6          Instrument for the Payment of Money . Each Guarantor hereby acknowledges that the Guarantee constitutes an instrument for the payment of money, and consents and agrees that any Lender or the Administrative Agent, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action under New York CPLR Section 3213.

 

8.7          Continuing Guarantee . The Guarantee made by the Tower Guarantors is a continuing guarantee of payment, and shall apply to all Tower Guaranteed Obligations whenever arising and the Guarantee made by the Company Guarantors is a continuing guarantee of payment, and shall apply to all Company Guaranteed Obligations whenever arising.

 

8.8          General Limitation on Guarantor Obligations . In any action or proceeding involving any federal, state, provincial or territorial, corporate, limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 8.1 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 8.1 , then, notwithstanding any other provision to the contrary, the amount of such liability of such Guarantor shall, without any further action by such Guarantor, any Loan Party or any other Person, be automatically limited and reduced to the highest amount (after giving effect to the right of contribution established in Section 8.10 ) that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. To effectuate the foregoing, the Administrative Agent and the Guarantors hereby irrevocably agree that the Guarantor Obligations of each Guarantor in respect of the Guarantee at any time shall be limited to the maximum amount as will result in the Guarantor Obligations of such Guarantor with respect thereto hereof not constituting a fraudulent transfer or conveyance after giving full effect to the liability under such Guarantee and its related contribution rights but before taking into account any liabilities under any other guarantee by such Guarantor. For purposes of the foregoing, all guarantees of such Guarantor other than its Guarantee will be deemed to be enforceable and payable after the Guarantee. To the fullest extent permitted by applicable law, this Section 8.8 shall be for the benefit solely of creditors and representatives of creditors of each Guarantor and not for the benefit of such Guarantor or the holders of any Equity Interest in such Guarantor.

 

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8.9          Release of Subsidiary Guarantors . (i) A Company Subsidiary Guarantor or a Co-Borrower shall be automatically released from its obligations hereunder in the event that all the Capital Stock of such Company Subsidiary Guarantor or Co-Borrower shall be sold, transferred or otherwise disposed of to a Person other than a Loan Party in a transaction permitted by this Agreement; provided that the Borrower Representative shall have delivered to the Administrative Agent, at least five days, or such shorter period as the Administrative Agent may agree, prior to the date of the release, a written notice of such for release identifying the relevant Company Subsidiary Guarantor or Co-Borrower and the terms of the sale or other disposition in reasonable detail, together with a certification by the Borrower Representative stating that such transaction is in compliance with this Agreement and the other Loan Documents and (ii) a Tower Group Member shall be released from its obligations hereunder upon the effectiveness of any Tower Borrower Release pursuant to Section 11.7 . In connection with any such release of a Guarantor, the Administrative Agent shall execute and deliver to the Borrower Representative, at the Borrower Representative’s expense, all UCC termination statements and other documents that the Borrower Representative shall reasonably request to evidence such release.

 

8.10        Right of Contribution . Each Company Subsidiary Guarantor and each Tower Subsidiary Guarantor hereby agrees that to the extent that (a) a Company Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Company Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Company Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment and (b) a Tower Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Company Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Company Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment. Each Company Subsidiary Guarantor’s and each Tower Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of Section 8.4 . The provisions of this Section 8.10 shall in no respect limit the obligations and liabilities of any Company Subsidiary Guarantor or Tower Subsidiary Guarantor to the Administrative Agent and the other Secured Parties, and each Company Subsidiary Guarantor and Tower Subsidiary Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Company Subsidiary Guarantor or Tower Subsidiary Guarantor, as applicable, hereunder. Notwithstanding the foregoing, no Excluded ECP Guarantor shall have any obligations or liabilities to any Guarantor, the Administrative Agent or any other Secured Party with respect to Excluded Swap Obligations.

 

8.11        Keepwell . Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under the Guarantee in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 8.11 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 8.11 , or otherwise under the Guarantee, as it relates to such Loan Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 8.11 shall remain in full force and effect until the termination and release of all Obligations in accordance with the terms of this Agreement. Each Qualified ECP Guarantor intends that this Section 8.11 constitute, and this Section 8.11 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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8.12        Limitations .

 

(a)           Limitations in Luxembourg .

 

(i)          Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Documents, the aggregate obligations of a Luxembourg Guarantor in respect of the obligations of a Group Member which is not a direct or indirect subsidiary of such Luxembourg Guarantor shall be limited at any time to an aggregate amount not exceeding 90% of the greater of:

 

(1)         an amount equal to the sum of the Luxembourg Guarantor’s Net Assets ( Capitaux Propres ), as referred to in annex I to the grand-ducal regulation dated 18 December 2015 defining the form and content of the presentation of balance sheet and profit and loss account, and enforcing the Luxembourg law dated 19 December 2002 on the register of commerce and companies, accounting and companies annual accounts, as amended (the “ Regulation ”) and its subordinated debt ( dettes subordonnées ), as reflected in the financial information of the Luxembourg Guarantor available to the Secured Parties as at the date of this Agreement or (as applicable) as at the date of its accession as a Guarantor, including, without limitation, its most recently and duly approved financial statements ( comptes annuels ) and any (unaudited) interim financial statements signed by its board of directors ( administrateurs ); and

 

(2)         an amount equal to the sum of the Luxembourg Guarantor’s Net Assets ( Capitaux Propres ), as referred to in the Regulation, and its subordinated debt ( dettes subordonnées ), as reflected in the financial information of the Luxembourg Guarantor available to the Secured Parties as at the date the Guarantee is called, including, without limitation, its most recently and duly approved financial statements ( comptes annuels ) and any (unaudited) interim financial statements signed by its board of directors ( administrateurs ).

 

(ii)         The limitation set forth at paragraph (i) above shall not apply to any amounts borrowed under this Agreement and made available, in any form whatsoever, to such Luxembourg Guarantor or any of its direct or indirect subsidiaries.

 

(iii)        The Luxembourg Guarantor’s obligations under this Section 8 will not extend to include any obligations or liabilities if such inclusion would constitute a breach of the financial assistance prohibitions contained at Article 49-6 (where applicable) of the Luxembourg act on commercial companies of 10 August 1915, as amended.

 

(b)           Limitations in the United Kingdom . Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Documents, this Guarantee does not apply to any liability to the extent that it would result in such Guarantee constituting unlawful financial assistance within the meaning of sections 678 or 679 of the United Kingdom Companies Act 2006.

 

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(c)           Limitations in Spain . Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, the aggregate obligations of a Spanish Guarantor will not extent to any liability to the extent that it would result in such guarantee constituting unlawful financial assistance within the meaning of Sections 143.2 and 150 of the Spanish Companies’ Act ( Ley de Sociedades de Capital ).

 

(d)           Limitations in Germany .

 

(i)          The Secured Parties agree not to enforce the Guarantee granted under this Section 8 ( Guarantee ) against a Guarantor incorporated in Germany as a limited liability company ( GmbH ) (a “ German GmbH Guarantor ”), or as a limited partnership ( Kommanditgesellschaft ) with a limited liability company as sole general partner ( GmbH & Co. KG ) (the “ German GmbH & Co. KG Guarantor ”, together with any German GmbH Guarantor hereinafter referred to as a “ German Guarantor ”) to the extent that this Guarantee secures liabilities of an affiliated company ( verbundenes Unternehmen ) within the meaning of Section 15 et seq. of the German Stock Corporation Act ( AktG Aktiengesetz ) of that German Guarantor (other than the German Guarantor’s (direct or indirect) Subsidiaries) (the “ Guaranteed Loan Party ”) if and to the extent that a payment under the Guarantee would cause that German Guarantor’s, or, in the case of a German GmbH & Co. KG Guarantor, its general partner’s, net assets (to be calculated in accordance with generally accepted accounting principles applicable in Germany consistently applied by the German Guarantor in preparing its unconsolidated balance sheets ( Jahresabschluss according to § 42 GmbH-Act, §§ 242, 264 of the German Commercial Code ( HGB Handelsgesetzbuch )) being the German Guarantors’ or, in the case of a German GmbH & Co. KG Guarantor, its general partner’s, assets less the sum of (i) the German Guarantor’s liabilities (to be calculated in accordance with generally accepted accounting principles applicable in Germany consistently applied by the German Guarantor in preparing its unconsolidated balance sheets ( Jahresabschluss according to § 42 GmbH-Act, §§ 242, 264 of the German Commercial Code), (disregarding, for the avoidance of doubt, (x) any provision in respect of the guarantee created under this Agreement, and (y) any provision in respect of or liabilities of the German Guarantor under any Guarantee of senior unsecured indebtedness or Indebtedness subordinated in right of payment to the Obligations which Guarantee contains a limitation as to maximum amount similar to that set forth in this paragraph, pursuant to which the liability of such Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount), (ii) the amounts of profits ( Gewinne ) not available for distribution to its shareholders and (iii) the stated share capital ( Stammkapital ) of the German Guarantor or, in the case of a German Guarantor in the legal form of GmbH & Co. KG, its general partner (the “ Net Assets ”), (as adjusted in accordance with sub-paragraph (ii) below) to be reduced below zero, or further reduced if already below zero.

 

(ii)         For the purposes of the calculation of the Net Assets the following balance sheet items shall be adjusted as follows:

 

(1)         the amount of any increase of the stated share capital ( Stammkapital ) of the German Guarantor, or, in case of a German GmbH & Co. KG Guarantor, its general partner, after the date hereof (A) that has been effected without the prior written consent of the Administrative Agent out of retained earnings ( Kapitalerhöhung aus Gesellschaftsmitteln ) or (B) to the extent that it is not fully paid up, shall be deducted from the stated share capital;

 

(2)         loans and contractual liabilities incurred in violation of the provisions of the Loan Documents shall be disregarded; and

 

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(3)         any liabilities of the German Guarantor in respect of intercompany indebtedness owed to any other Loan Party to the extent that such intercompany indebtedness may be permanently discharged in an amount equal to the amount paid by such German Guarantor hereunder by way of set-off, contribution, waiver or otherwise (and the relevant Loan Parties are actually permitted to do so under the Loan Documents and applicable law at the relevant time).

 

(iii)        In addition, each German Guarantor, and, in case of a German GmbH & Co. KG Guarantor, its general partner, shall, for the purposes of determining the Net Assets, upon the request of the Collateral Agent realize, to the extent legally permitted and commercially justifiable with respect to the cost and efforts involved, in a situation where such German Guarantor, and, in the case of a German GmbH & Co. KG Guarantor, its general partner, does not have sufficient Net Assets to maintain its stated share capital, any and all of its assets that are shown in the balance sheet of the German Guarantor, or, in case of a German GmbH & Co. KG Guarantor, its general partner, with a book value ( Buchwert ) that is significantly lower than the market value of the assets if the asset is not necessary for such German Guarantor’s, and, in the case of a German GmbH & Co. KG Guarantor, its general partner’s, business, ( betriebsnotwendig ) (the “ Realizable Assets ”).

 

(iv)        No Secured Party shall enforce this Agreement against the relevant German Guarantor before the Net Assets (as determined in accordance with clauses (i) and (ii) of this Section 8.12(d) ), i.e., the amounts which may be claimed against a relevant German Guarantor, or, in the case of a German GmbH & Co. KG Guarantor, its general partner, have been determined in accordance with the following further procedure:

 

(1)         following a notification by the Collateral Agent to the relevant German Guarantor of the Secured Parties’ intention to enforce this Guarantee such German Guarantor shall notify the Collateral Agent in writing within twenty (20) Business Days of such notification of the Net Assets (the “ Management Determination ”). If the Collateral Agent disagrees with this Management Determination such German Guarantor, acting reasonably, shall engage at its expense a firm of auditors of international standard and repute which shall proceed to audit the relevant German Guarantor with a view to investigating such German Guarantor’s Net Assets (the “ Auditors’ Determination ”) within thirty (30) Business Days (or such longer period as has been agreed between the German Guarantor and the Collateral Agent) from the date the Collateral Agent has contested the Management Determination and the German Guarantor shall give notice of such engagement to the Collateral Agent. Each relevant German Guarantor shall render any and all reasonable assistance requested by the auditors for the purposes of facilitating the Auditors’ Determination and shall allow full access to and inspection of its books and any other necessary documents.

 

(2)         The Auditors’ Determination of the Net Assets shall take into account, in addition to the terms set forth in clauses (i), (ii) and (iii) of this Section 8.12(d) , the generally accepted accounting principles applicable in Germany and be based on the same principles that were applied when establishing the previous year’s balance sheet.

 

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(3)         The Secured Parties may proceed to enforce this Guarantee granted by the relevant German Guarantor, if and to the extent that (i) the German Guarantor has not provided the Management Determination within the twenty (20) Business Days period or (ii) an Auditors’ Determination cannot has not been obtained within the thirty (30) Business Days following notice by the Collateral Agent to the relevant German Guarantor that it disagrees with its Management Determination. The maximum amount that may be claimed against such relevant German Guarantor in those circumstances will be the amount determined by the Collateral Agent in good faith acting reasonably by reference to the most recent financial statements delivered in respect of the relevant German Guarantor under this Agreement and, based on such determination by the Collateral Agent, the payment of which would not result in such German Guarantor, or, in the case of a German GmbH & Co. KG Guarantor, its general partner, having insufficient assets to maintain its stated share capital. For the purpose of calculating such amount, the adjustments referred to in clauses (i) and (ii) of this Section 8.12(d) will be made to the most recent financial statements delivered as aforesaid.

 

(v)         If the amount payable under the relevant Guarantee was determined in accordance with Section 8.12(d)(iv)(3) , because an Auditors’ Determination or Management Determination could not be obtained as outlined in Section 8.12(d)(iv)(1) , and, in such case, an Auditors’ Determination delivered by the relevant German Guarantor to the Collateral Agent within sixty (60) Business Days after the respective auditor should have been engaged in accordance with Section 8.12(d)(iv)(1) confirms that the amount available under the relevant Guarantee granted hereunder at the time of enforcement was less than the amount recovered by the Collateral Agent, the Secured Parties agree to release to the relevant German Guarantor an amount of the proceeds equal to the amount by which the recoveries relating to the relevant Guarantee exceeded the amount determined to be available.

 

(vi)        The limitations set out in clause (i) of this Section 8.12(d) shall not apply:

 

(1)         to any amounts due and payable under any Loan Document which relate to funds which have been drawn under the Loans and on-lent to the relevant German Guarantor or to any of its (direct or indirect) Subsidiaries and such amounts on-lent have not been repaid prior to a demand for payment being made under this Guarantee and are still outstanding ;

 

(2)         if the German Guarantor is subject to a domination and/or profit transfer agreement ( Beherrschungs- und/oder Gewinnabführungsvertrag ) (a “ DPTA ”) (as dominated entity) with the Guaranteed Loan Party, whether directly or indirectly through a chain of DPTAs between each company and its shareholder (or in case of a German GmbH & Co. KG Guarantor between its general partner and its shareholder), if and to the extent that the existence of a DPTA leads to the inapplicability of Section 30 para. 1 sentence 1 of the German Limited Liability Companies Act;

 

(3)         if and to the extent that the relevant German Guarantor holds on the date of enforcement of the Guarantee a fully recoverable indemnity claim or claim for refund (“ vollwertiger Gegenleistungs- oder Rückgewähranspruch ”) against the Guaranteed Loan Party; or

 

(4)         if and to the extent it is not required in order to avoid any personal liability of the managing directors of the German Guarantors (or, in case of a German GmbH & Co. KG Guarantor, of its general partner) as a result of a breach of section 30 GmbHG.

 

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(vii)       None of the reduction of the amount enforceable under this Agreement in accordance with the above limitations set out in this Section 8.12(d) will prejudice the rights of the Secured Parties to continue enforcing this Guarantee (subject always to the operation of the limitations set forth above at the time of such enforcement) until full satisfaction of the Guarantor Obligations of the German Guarantor.

 

(e)          Each Guarantor that as of the date of this Agreement or thereafter is incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than those jurisdictions set forth in clauses (a) through (d) above (an “ Other Guarantor ”), and by its acceptance hereof, each Lender and the Administrative Agent, hereby confirm that it is the intention of all such parties that the Guarantee of an Other Guarantor (i) does not constitute a fraudulent transfer or conveyance for purposes of, or otherwise violate, applicable Law and (ii) shall be subject to the Agreed Security Principles. To effectuate the foregoing intention, each Lender and each Other Guarantor hereby irrevocably agrees that the obligations of an Other Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Other Guarantor result in the obligations of such Other Guarantor not constituting such a fraudulent transfer or conveyance or otherwise violating applicable Law and be subject to such other limitations in accordance with the Agreement Security Principles or under applicable Law and as are described in such Other Guarantor’s Guarantor Joinder Agreement and/or Co-Borrower Joinder.

 

(f)          Notwithstanding anything in this Section 8.12 to the contrary, if following the date of this Agreement:

 

(i)          there shall be any change in the Laws of any of the jurisdictions set forth in clauses (a) and (b) of this Section 8.12 ;

 

(ii)         there shall be any change in the Laws under which any Other Guarantor is incorporated, organized or formed, as the case may be; or

 

(iii)        any Person shall be required to execute a Guarantee pursuant to Section 6.9 and such Person is incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than those in which entities are contemplated to become Guarantors as of the Closing Date, including those jurisdictions addressed in clauses (a) and (b) of this Section 8.12 and other than any jurisdiction in which a then existing Other Guarantor is incorporated, organized or formed, as the case may be (a “ Future Guarantor ”), and the Borrower Representative shall reasonably determine that the provisions of Section 8.12 hereof with respect to any Other Guarantor shall not adequately address the limitations on such Guarantee as set forth in the Agreed Security Principles or imposed by applicable Law of the jurisdiction of incorporation, organization or formation, as the case may be, of such Future Guarantor,

 

then the Administrative Agent and the Borrower Representative shall be permitted to amend such clause or add such additional provisions to such clause, as the case may be, to the extent necessary so that the Guarantee of a Guarantor is subject to the limitations set forth in the Agreed Security Principles or does not violate applicable Law.

 

(g)          With respect to any Guarantor, this Guarantee is subject to any limitations set out in any Guarantor Joinder Agreement and/or Co-Borrower Joinder applicable to such Guarantor.

 

SECTION 9.
EVENTS OF DEFAULT

 

9.1          Company Events of Default . A Company Borrower Event of Default shall occur if any of the following events shall occur and be continuing; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied (any such event, a “ Company Borrower Event of Default ”):

 

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(a)          any Company Borrower shall fail to pay (x) any principal of any Loan (other than any payment of principal under Section 2.3(a)(i) ) or Reimbursement Obligation when due in accordance with the terms hereof, (y) any principal of any Loan under Section 2.3(a)(i) within one Business Day after any such principal becomes due in accordance with the terms hereof or (z) any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document within three Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

(b)          any representation or warranty made or deemed made by any Company Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other written statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect (except where such representations and warranties are already qualified by materiality, in which case, in any respect) on or as of the date made or deemed made (or if any representation or warranty is expressly stated to have been made as of a specific date, inaccurate in any material respect as of such specific date); or

 

(c)          any Company Loan Party shall default in the observance or performance of any agreement contained in Section 6.4(a)(i) (in respect of Holdings and UK Holdco), Section 6.7(a) , Section 6.9(c) or Section 7 of this Agreement (other than Section 7.1 ); or

 

(d)          subject to Section 9.4 , UK Holdco shall default in the observance or performance of its agreement contained in Section 7.1 ; provided that, notwithstanding anything to the contrary in this Agreement or any other Loan Document, a breach of the requirements of Section 7.1 shall not constitute an Event of Default for purposes of any Facility other than the Revolving Facility; or

 

(e)          any Company Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (d) of this Section 9.1 ), and such default shall continue unremedied for a period of 30 days after notice to the Borrower Representative from the Administrative Agent or the Required Lenders; or

 

(f)          any Company Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation in respect of Indebtedness, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to (x) cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable or (y) to cause, with the giving of notice if required, any Company Group Member to purchase or redeem or make an offer to purchase or redeem such Indebtedness prior to its stated maturity; provided that a default, event or condition described in clause (i), (ii) or (iii) of this Section 9.1(f)  shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this Section 9.1(f)  shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $75,000,000; provided , further , that clause (iii) of this Section 9.1(f) shall not apply to secured Indebtedness that becomes due as a result of the voluntary Disposition of the property or assets securing such Indebtedness, if such Disposition is permitted hereunder and such Indebtedness that becomes due is paid upon such Disposition; or

 

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(g)          (i) any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, suspension of payments, moratorium or any indebtedness, winding up, dissolution, administration, scheme of arrangement or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a liquidator, receiver, administrative receiver, compulsory manager, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary any case, proceeding, analogous procedure, step or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) (1) in respect of any US Subsidiary of UK Holdco, remains undismissed, undischarged or unbonded for a period of 60 days and (2) in respect of Holdings, UK Holdco, the Lux Company Borrower and any Foreign Subsidiary, remains undismissed, undischarged or unbonded for a period of 30 days; or (iii) there shall be commenced against any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that (1) in respect of any US Subsidiary of UK Holdco, shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof and (2) in respect of Holdings, UK Holdco, the Lux Company Borrower and any Foreign Subsidiary, shall not have been vacated, discharged, or stayed or bonded pending appeal within 30 days from the entry thereof; or (iv) any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; (v) any Opco Borrower, any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) or any Significant Subsidiary shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) a Luxembourg Insolvency Event shall have occurred;

 

(h)          (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any Plan shall fail to meet the minimum funding standards of Section 412 or 430 of the Code or Section 302 or 303 of ERISA or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Company Group Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)  any Company Group Member or any Commonly Controlled Entity shall, or is reasonably likely to, incur any liability in connection with a complete or partial withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan; (vi) any other event or condition shall occur or exist with respect to a Plan that could give rise to liability under Title IV of ERISA; or (vii) any Foreign Benefit Plan Event shall occur; and in each case in clauses (i) through (vii) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or

 

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(i)          one or more judgments or decrees shall be entered against any Company Group Member involving in the aggregate a liability (not (x) paid or covered by insurance as to which the relevant insurance company has been notified of the claim and has not denied coverage or (y) covered by valid third party indemnification obligation from a third party which is Solvent and which third party has been notified of the claim under such indemnification obligation and not disputed that it is liable for such claim) of $75,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

 

(j)          any of the Security Documents shall cease, for any reason, to be in full force and effect, other than pursuant to the terms hereof or thereof, or any Company Loan Party or any Affiliate of any Company Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby, except (A) to the extent that (x) any such loss of perfection or priority results from the failure of the Administrative Agent to maintain possession of certificates actually delivered to it representing securities pledged under any Security Agreement or from the failure of the Administrative Agent to file UCC continuation statements (or similar statements or filings in other jurisdictions) and (y) the Company Loan Parties take such action as the Administrative Agent may reasonably request to remedy such loss of perfection or priority or (B) where the fair market value of assets affected thereby does not exceed $30,000,000; or

 

(k)          the Guarantee of any Company Guarantor (other than any Company Guarantor that is an Immaterial Subsidiary) shall cease, for any reason, to be in full force and effect, other than as provided for in Sections 8.9 or 10.10 , or any Company Loan Party or any Affiliate of any Company Loan Party shall so assert;

 

(l)          a Change of Control shall occur; or

 

(m)         any Loan Party repudiates or rescind this Agreement or the Loan Documents or evidences an intention to repudiate or rescind this Agreement or the Loan Documents in a manner which is materially adverse to the interests of the Lenders as a whole and, where capable of remedy, the circumstance are not remedied within 10 days of the earlier of (a) becoming aware of a failure to comply and (b) receiving a written notice of the Administrative Agent notifying it of that failure.

 

9.2          Tower Borrower Events of Default . A Tower Borrower Event of Default shall occur if any of the following events shall occur and be continuing; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied (any such event, a “ Tower Borrower Event of Default ”):

 

(a)          any Tower Borrower shall fail to pay (x) any principal of any Loan (other than any payment of principal under Section 2.3(a)(i) ) when due in accordance with the terms hereof, (y) any principal of any Loan under Section 2.3(a)(i) within one Business Day after any such principal becomes due in accordance with the terms hereof or (z) any interest on any Loan, or any other amount payable hereunder or under any other Loan Document within three Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

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(b)          any representation or warranty made or deemed made by any Tower Group Member herein or in any other Loan Document or that is contained in any certificate, document or financial or other written statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made (or if any representation or warranty is expressly stated to have been made as of a specific date, inaccurate in any material respect as of such specific date); or

 

(c)          any Tower Group Member shall default in the observance or performance of any agreement contained in clause (i) or (ii) of Section 6.3.A(a) , Section 6.5.A(a) or Section 7.A of this Agreement; or

 

(d)          any Tower Group Member shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 9.2 ), and such default shall continue unremedied for a period of 30 days after notice to the Borrower Representative from the Administrative Agent or the Required Lenders; or

 

(e)          any Tower Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation in respect of Indebtedness, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to (x) cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable or (y) to cause, with the giving of notice if required, any Tower Group Member to purchase or redeem or make an offer to purchase or redeem such Indebtedness prior to its stated maturity; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this Section 9.2(e) shall not at any time constitute an Tower Borrower Event of Default unless, at such time, (x) all applicable grace periods have expired and (y) one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this Section 9.2(e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $75,000,000; or

 

(f)          (i) any Tower Group Member shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Tower Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Tower Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) (1) in the case of the US Tower Borrower and Tower LLC, remains undismissed, undischarged or unbonded for a period of 60 days and (2) in the case of the FHC Borrower and Tower Co, remains undismissed, undischarged or unbonded for a period of 30 days; or (iii) there shall be commenced against any Tower Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that (1) in the case of the US Tower Borrower and Tower LLC, shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof and (2) in the case of the FHC Tower Borrower and Tower Co, shall not have been vacated, discharged, or stayed or bonded pending appeal within 30 days from the entry thereof; or (iv) any Tower Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Tower Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

 

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(g)          (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan; (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Tower Group Member or any Commonly Controlled Entity; (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA; (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA; (v) any Tower Group Member or any Commonly Controlled Entity shall, or is reasonably likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan; (vi) any other event or condition shall occur or exist with respect to a Plan that could give rise to liability under Title IV of ERISA; or (vii) any Foreign Benefit Plan Event shall occur; and in each case in clauses (i) through (vii) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or

 

(h)          one or more judgments or decrees shall be entered against any Tower Group Member involving in the aggregate a liability (not (x) paid or covered by insurance as to which the relevant insurance company has been notified of the claim and has not denied coverage or (y) covered by valid third party indemnification obligation from a third party which is Solvent and which third party has been notified of the claim under such indemnification obligation and not disputed that it is liable for such claim; provided that notwithstanding the foregoing clauses (x) and (y), an Event of Default that would otherwise exist under this clause (h) but for such clauses (x) and (y) above shall exist in the event actions to enforce such judgments or decrees are commenced against any Group Member or any Group Member’s assets of $75,000,000 or more), and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

 

(i)          any of the Security Documents shall cease, for any reason, to be in full force and effect, other than pursuant to the terms hereof and thereof, or any Tower Group Member or any Affiliate of any Tower Group Member shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby, except to the extent that (x) any such loss of perfection or priority results from the failure of the Administrative Agent to maintain possession of certificates actually delivered to it representing securities pledged under any Security Agreement or from the failure of the Administrative Agent to file UCC continuation statements (or similar statements or filings in other jurisdictions) and (y) the Tower Loan Parties take such action as the Administrative Agent may request to remedy such loss of perfection or priority; or

 

(j)           the Guarantee of any Tower Guarantor contained in Section 8 shall cease, for any reason, to be in full force and effect, other than as provided for in Section 8.9 , or any Tower Loan Party or any Affiliate of any Tower Loan Party shall so assert; or

 

(k)          a Change of Control shall occur;

 

(l)           a Company Borrower Event of Default shall occur; or

 

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(m)         any Tower Group Member repudiates or rescind this Agreement or the Tower Borrower Documents or evidences an intention to repudiate or rescind this Agreement or the Tower Borrower Documents in a manner which is materially adverse to the interest of the Lenders as a whole and, where capable of remedy, the circumstance are not remedied within 10 days of becoming aware of a failure to comply.

 

9.3          Action in Event of Default .

 

(a)          (x) Upon any Event of Default specified in Section 9.1(g)(i) or (ii) or Section 9.2(f)(i) or (ii) occurring and continuing with respect to any Loan Party under the Bankruptcy Code or any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States from time to time in effect and affecting the rights of creditors generally, the Commitments to lend to such Loan Party shall immediately terminate automatically and the Loans (with accrued interest thereon) and all other Obligations owing by such Loan Party under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall automatically immediately become due and payable ( provided that the occurrence of such event in relation to such Loan Party shall not, except to the extent provided in this clause (x), result in any Loan being accelerated without a notice having been given pursuant to clause (y) below to the Borrowers (including, for the avoidance of doubt, any other Loan Party)), and (y) if any other Event of Default (other than under Section 9.1(g)(i) or (ii) or Section 9.2(f)(i) or (ii) in respect of a Loan Party as set out in clause (x) above) occurs and is continuing, subject to Section 9.3(b) and (c) , either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrowers declare the Revolving Commitments to be terminated forthwith, whereupon the Revolving Commitments shall immediately terminate; and/or (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrowers, declare the Loans (with accrued interest thereon) and all other Obligations owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. In furtherance of the foregoing, the Administrative Agent may, or upon the request of the Required Lenders the Administrative Agent shall, exercise any and all other remedies available under the Loan Documents at law or in equity, including commencing and prosecuting any suits, actions or proceedings at law or in equity in any court of competent jurisdiction and collecting the Collateral or any portion thereof and enforcing any other right in respect of any Collateral.

 

(b)          Upon the occurrence of an Event of Default under Section 9.1(d) (a “ Financial Covenant Event of Default ”) that is uncured or unwaived, the Majority Revolving Lenders may, so long as a Financial Compliance Date continues to be in effect, either (x) terminate the Revolving Commitments and/or (y) take the actions specified in Section 9.3(a) and (c) in respect of the Revolving Commitments, the Revolving Loans, Letters of Credit and any Swingline Loans.

 

(c)          In respect of a Financial Covenant Event of Default that is continuing, the Required Lenders may take the actions specified in Section 9.3(a) on the date that the Majority Revolving Lenders terminate the Revolving Commitments and accelerate all Obligations in respect of the Revolving Commitments; provided , however , that the Required Lenders may not take such actions if either (i) the Revolving Loans have been repaid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made) and the Revolving Commitments have been terminated or (ii) the Financial Covenant Event of Default has been waived by the Majority Revolving Lenders.

 

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(d)          With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrowers shall at such time deposit in a Cash Collateral Account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such Cash Collateral Account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other Obligations of the Borrowers hereunder and under the other Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon and all amounts drawn thereunder have been reimbursed in full and all other Obligations of the Borrowers hereunder and under the other Loan Documents shall have been paid in full (other than contingent indemnification and reimbursement obligations for which no claim has been made), the balance, if any, in such Cash Collateral Account shall be returned to the Borrowers (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section 9.3 , presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrowers.

 

9.4          Right to Cure .

 

(a)          Notwithstanding anything to the contrary contained in Section 9 , in the event that UK Holdco fails (or, but for the operation of this Section 9.4 , would fail) to comply with the requirements of Section 7.1 , Holdings shall have the right from the date of delivery of a Notice of Intent to Cure with respect to the fiscal quarter most recently ended for which financial results have been provided under Sections 6.1(a) or (b) until 10 Business Days thereafter (the “ Cure Period ”), to issue Permitted Cure Securities for cash or otherwise receive cash contributions to the equity capital of Holdings, and, in each case, to contribute any such cash to the equity capital of UK Holdco (collectively, the “ Cure Right ”), and upon the receipt by UK Holdco of such cash (the “ Cure Amount ”) pursuant to the exercise by Holdings of such Cure Right, the Total First Lien Net Leverage Ratio shall be recalculated by increasing Consolidated EBITDA (solely for purposes of compliance with Section 7.1 and determining whether an Event of Default is continuing for the purposes of clause (y) of the definition of Applicable Margin) on a Pro Forma Basis solely for the purpose of measuring the Total First Lien Net Leverage Ratio and not for any other purpose under this Agreement, by an amount equal to the Cure Amount.

 

(b)          If, after giving effect to the foregoing recalculations, UK Holdco shall then be in compliance with the requirements of Section 7.1 , then UK Holdco shall be deemed to have satisfied the requirements of Section 7.1 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of Section 7.1 that had occurred shall be deemed cured for the purposes of this Agreement.

 

(c)          To the extent a fiscal quarter ended for which the Total First Lien Net Leverage Ratio was initially recalculated as a result of a Cure Right and such fiscal quarter is included in the calculation of the Total First Lien Net Leverage Ratio in a subsequent fiscal quarter, the Cure Amount shall be included in Consolidated EBITDA of such initial fiscal quarter.

 

(d)          Notwithstanding anything herein to the contrary, (i) in each four-fiscal-quarter period there shall be at least two fiscal quarters in which the Cure Right is not exercised, (ii) for purposes of this Section 9.4 , the Cure Amount shall be no greater than the amount required for purposes of complying with the Total First Lien Net Leverage Ratio, determined at the time the Cure Right is exercised with respect to the fiscal quarter ended for which the Total First Lien Net Leverage Ratio was initially recalculated as a result of a Cure Right, (iii) the Cure Amount shall be disregarded for all other purposes of this Agreement, including, determining any baskets with respect to the covenants contained in Section 7 , and shall not result in any adjustment to any amounts other than the amount of Consolidated EBITDA as described in clause (a) above, (iv) there shall be no pro forma reduction in Indebtedness with the proceeds of any Cure Amount for the fiscal quarter immediately preceding the fiscal quarter in which the Cure Right is exercised for purposes of determining compliance with Section 7.1 and (v) Holdings shall not exercise the Cure Right in excess of five instances over the term of this Agreement.

 

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9.5          Application of Proceeds . If an Event of Default shall have occurred and be continuing, the Administrative Agent may apply, at such time or times as the Administrative Agent may elect, all or any part of proceeds constituting Collateral in payment of the Obligations (and in the event the Loans and other Obligations are accelerated pursuant to Section 9.3 , the Administrative Agent shall, from time to time, apply the proceeds constituting Collateral in payment of the Obligations) in the following order:

 

(a)           First , to the payment of all costs and expenses of any sale, collection or other realization on the Collateral, including reimbursement for all costs, expenses, liabilities and advances made or incurred by the Administrative Agent in connection therewith (including all reasonable costs and expenses of every kind incurred in connection any action taken pursuant to any Loan Document or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the other Secured Parties hereunder, reasonable attorneys’ fees and disbursements and any other amount required by any provision of law (including Section 9-615(a)(3) of the Uniform Commercial Code) (or any equivalent law in any foreign jurisdiction)), and all amounts for which Administrative Agent is entitled to indemnification hereunder and under the other Loan Documents and all advances made by the Administrative Agent hereunder and thereunder for the account of any Loan Party (excluding principal and interest in respect of any Loans extended to such Loan Party), and to the payment of all costs and expenses paid or incurred by the Administrative Agent in connection with the exercise of any right or remedy hereunder or under this Agreement or any other Loan Document and to the payment or reimbursement of all indemnification obligations, fees, costs and expenses owing to the Administrative Agent hereunder or under this Agreement or any other Loan Document, all in accordance with the terms hereof or thereof;

 

(b)           Second , for application by it pro   rata to (i) repay the Swingline Lender for any then outstanding Swingline Loans to the extent Revolving Lenders have not funded their obligations to acquire participations therein, (ii) cure any Funding Default that has occurred and is continuing at such time and (iii) repay the Issuing Lenders for any amounts not paid by L/C Participants pursuant to Section 3.4 ;

 

(c)           Third , for application by it towards all other Obligations (including, without duplication, Guarantor Obligations), pro   rata  among the Secured Parties according to the amounts of the Obligations then held by the Secured Parties (including all Obligations arising under Specified Cash Management Agreements, Specified Swap Agreements and including obligations to provide cash collateral with respect to Letters of Credit); and

 

(d)           Fourth , any balance of such Proceeds remaining after all of the Obligations shall have been satisfied by payment in full in immediately available funds (or in the case of Letters of Credit, terminated or Collateralized) and the Commitments shall have been terminated, be paid over to or upon the order of the applicable Loan Party or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

 

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9.6          Clean-Up Period .

 

(a)          Notwithstanding anything to the contrary set forth herein, during the Clean-Up Period, the occurrence of any breach of a representation, covenant (other than a failure to comply with Section 6.9 or 6.11 ) or an Event of Default (other than an Event of Default set out in Section 9.1(a) ) will be deemed not to be a breach of a representation or warranty or a breach of a covenant or an Event of Default, as the case may be, if it would have been (if it were not for this provision) a breach of representation or warranty or a breach of a covenant or an Event of Default only by reason of circumstances relating exclusively to (i) with respect to the Acquisition, the Company and its Subsidiaries or (ii) with respect to any Permitted Acquisition or other Permitted Clean-Up Investment, the target of such Permitted Acquisition or Permitted Clean-Up Investment, and provided that such breach or Event of Default:

 

(i)          is capable of being remedied within the Clean-Up Period and the Loan Parties are taking appropriate steps to remedy such breach or Event of Default;

 

(ii)         does not have and is not reasonably likely to have a Material Adverse Effect; and

 

(iii)        was not procured by or approved by Holdings, UK Holdco, the Company Borrowers, the Tower Borrowers or the Buyer;

 

provided that promptly after a Responsible Officer of the Borrower Representative has obtained knowledge thereof, the Borrower Representative shall notify the Administrative Agent of any such breach or Event of Default.

 

(b)          Notwithstanding Section 9.6(a) , if the relevant circumstances are continuing on or after the expiry of the Clean-Up Period, there shall be a breach of representation or warranty, breach of covenant or Event of Default, as the case may be, notwithstanding the above (and without prejudice to the rights and remedies of the Agents and the Lenders).

 

(c)          For the avoidance of doubt, if any breach of representation or covenant or Event of Default shall be deemed to not exist due to Section 9.6(a) during the Clean-Up Period, then such breach of representation or covenant or Event of Default shall be deemed not to exist for purposes of Section 5.2 for so long as (but in no event later than the end of the Clean-Up Period) such breach of representation or covenant or Event of Default shall be deemed not to exist due to the provisions of Section 9.6(a) .

 

SECTION 10.
ADMINISTRATIVE AGENT

 

10.1        Appointment and Authority .

 

(a)           Administrative Agent . Each of the Lenders and the Issuing Lenders hereby irrevocably appoints Credit Suisse to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10 are solely for the benefit of the Administrative Agent, the Joint Bookrunners, the Joint Lead Arrangers, the Lenders and the Issuing Lenders, and, except to the extent that any Group Member has any express rights under this Section 10 , no Group Member shall have rights as a third party beneficiary of any of such provisions. Each Joint Lead Arranger and Joint Bookrunner shall be an intended third party beneficiary of the provisions set forth in this Agreement that are applicable thereto.

 

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(b)           Collateral Agent . The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Qualified Counterparty and a potential Cash Management Provider) and the Issuing Lenders hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the Issuing Lenders (with the full power to appoint and to substitute and to delegate) on its behalf, or in its own name as joint and several creditor or creditor of a parallel debt (as the case may be) for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.5 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Section 10 and Section 11 , as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents as if set forth in full herein with respect thereto. Without limiting the generality of the foregoing, the Lenders hereby expressly authorize the Administrative Agent on its behalf and/or in its own name (including under the parallel debt) to execute any and all documents (including releases) with respect to the Collateral and the rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Documents and acknowledge and agree that any such action by any Agent shall bind the Lenders. Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy with respect to any Collateral against any Borrower or any other Loan Party or any other obligor under any of the Loan Documents, Specified Swap Agreements or any Specified Cash Management Agreement (including, in each case, the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral of any Borrower or any other Loan Party, without the prior written consent of the Administrative Agent. In the event of a foreclosure by the Administrative Agent on any of the Collateral pursuant to a public or private sale or a sale of any of the Collateral pursuant to Section 363 of the Bankruptcy Code (or an equivalent process in any foreign jurisdiction), the Administrative Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and the Administrative Agent, as agent for and representative of the Lenders (but not any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing) shall be entitled, with the consent or at the direction of the Required Lenders, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale, to use and apply any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Administrative Agent at such sale.

 

(c)           German Collateral . In relation to any Collateral created under Security Documents governed by German law (the “ German Collateral ”) the appointment pursuant to paragraph (b) above includes the appointment as trustee ( Treuhänder ) under German law and administrator for the purpose of accepting and, administering the German Collateral for the benefit and account of the other Secured Parties and the Administrative Agent hereby accepts such appointment. The Administrative Agent shall, with respect to any security interest created under any Collateral Documents, or any other Collateral, which in each case is subject to German law, hold, administer and, as the case may be, release and (subject to it having become enforceable) realize in its own name as trustee ( treuhänderisch ) for the benefit and account of the Secured Parties, and not as trustee on behalf of any other party.

 

(d)           Spanish Collateral . In relation to any Collateral created under Security Documents governed by Spanish law, each of the Lenders hereby undertake, upon request by the Administrative Agent, to grant a power of attorney in its favor to exercise the powers contained in this Section 10.1, which shall be notarized and legalized by affixing an apostille pursuant to The Hague Convention of 1961.

 

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10.2        Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Tower Borrowers, Holdings, UK Holdco, the Company Borrowers or any of their respective Subsidiaries or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

10.3        Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)          shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)          shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law;

 

(c)          shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity;

 

(d)          shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 11.1 and Section 9.3 ) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice describing such Default is given to the Administrative Agent by a Borrower, a Lender or the applicable Issuing Lender.

 

(e)          The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Security Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Lenders or Affiliate Lenders. Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Lender, (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Lender or (z) be obligated to ascertain, monitor or enforce the limitations in connection with any assignment to Debt Fund Affiliates and Affiliated Lenders or have any liability with respect thereto or any matter arising thereof.

 

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10.4        Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the applicable Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received written notice to the contrary from such Lender or such Issuing Lender prior to the making of such Loan or the issuance such Letter of Credit. The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or such other number or percentage of Lenders as shall be provided for herein or in the other Loan Documents) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or such other number or percentage of Lenders as shall be provided for herein or in the other Loan Documents), and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and all future holders of the Loans.

 

10.5        Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable decision to have resulted from the gross negligence, bad faith or willful misconduct in the selection of such sub-agents.

 

10.6        Resignation and Removal of Administrative Agent .

 

(a)          The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, subject to the approval of the Borrower Representative, not to be unreasonably withheld, for so long as no Event of Default set forth under Section 9.1(a) , 9.1(g) , 9.2(a) or 9.2(f) has occurred and is continuing, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “ Resignation Effective Date ”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the Issuing Lenders, in consultation with the Borrowers, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

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(b)          If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrowers and such Person remove such Person as Administrative Agent and, subject to the approval of the Borrower Representative, not to be unreasonably withheld, for so long as no Event of Default set forth under Section 9.1(a), 9.1(g), 9.2(a) or 9.2(f) has occurred and is continuing, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “ Removal Effective Date ”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

(c)          With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed), all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lenders directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section 10 and Section 11.5 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

(d)          Any resignation by Credit Suisse as Administrative Agent pursuant to this Section shall also constitute its resignation as Issuing Lender, and any resignation as Administrative Agent by the Person which is simultaneously the Swingline Lender shall also constitute its resignation as Swingline Lender. If Credit Suisse resigns as an Issuing Lender, it shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit issued by it which are outstanding as of the effective date of its resignation as an Issuing Lender and all L/C Obligations with respect thereto, including the right to require the Lenders to make ABR Loans or fund risk participations in unreimbursed amounts in connection with Letters of Credit. Similarly, if the Swingline Lender resigns as such, it shall retain all the rights, powers, privileges and duties of a Swingline Lender hereunder with respect to the Swingline Loans made by it which are outstanding as of the effective date of its resignation, including the right to require the Lenders to make ABR Loans or fund risk participations in outstanding Swingline Loans. Upon the appointment by the Borrowers of a successor Issuing Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender or Swingline Lender, as applicable, (b) the retiring Issuing Lender or Swingline Lender shall be discharged from all of its respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring Issuing Lender which are outstanding at the time of such succession or make other arrangements satisfactory to Credit Suisse to effectively assume the obligations of Credit Suisse with respect to such Letters of Credit.

 

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10.7        Non-Reliance on Administrative Agent and Other Lenders . Each Lender and each Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any Joint Bookrunner, any Joint Lead Arranger or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

10.8        No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Administrative Agent, the Collateral Agent, Joint Bookrunners or Joint Lead Arrangers listed on the cover page hereof (each, an “ Agent ”) shall (a) have any powers, obligations, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or an Issuing Lender hereunder or (b) be obligated to carry out on behalf of any Lender (i) any “know your customer” or other checks in relation to any Person or (ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender, and each Lender confirms to each Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by any Agent.

 

10.9        Administrative Agent May File Proofs of Claim; Credit Bidding .

 

(a)           In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(i)          to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Sections 2.8 , 3.3 and 11.5 ) allowed in such judicial proceeding; and

 

(ii)         to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the applicable Issuing Lender, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.8 and 11.5 .

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any Issuing Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any Issuing Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender or any Issuing Lender or in any such proceeding.

 

The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law.  In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase).  In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles to make a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 11.1 of this Agreement), (iii) the Administrative Agent shall be authorized to assign the relevant Obligations to any such acquisition vehicle pro rata by the Lenders, as a result of which each of the Lenders shall be deemed to have received a pro rata portion of any Equity Interests and/or debt instruments issued by such an acquisition vehicle on account of the assignment of the Obligations to be credit bid, all without the need for any Secured Party or acquisition vehicle to take any further action, and (iv) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.

 

(b)          As regards any judicial proceeding relating to any Spanish Loan Party and for the purposes of Article 572 of the Spanish Civil procedural Law, the Parties expressly agree that:

 

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(i)          a statement as to any amount due to any Loan Party under this Agreement which is certified as being correct by the Administrative Agent or, failing which, by the relevant Lender shall, in the absence of manifest error or unless otherwise provided under this Agreement be prima facie evidence of the amount so due and that such amount is in fact true, net, due and payable. Such statement shall include the balance resulting from the calculation of the debt (in Spanish: liquidación ) made by the Administrative Agent or the relevant Lender, as well as the extract of the credits and debits entries and those corresponding to the application of interest (if any) which determine the particular balance of the amount due;

 

(ii)         the balance of the specific ledgers in relation to the Loan Documents, opened and held by the Administrative Agent or the relevant Lender in the relevant Spanish Loan Party's name, in accordance with the terms of the Spanish Civil Procedure Law 1/2000, in which ledgers all amounts owed by the Spanish Loan Party shall be debited and all amounts paid by the Spanish Loan Party shall be credited, shall be considered by the parties hereof as determining the amount of debt of the Spanish Loan Party outstanding at the time enforcement action is taken;

 

(iii)        the Administrative Agent, failing which, the relevant Lender shall execute an authentic document (in Spanish: documento fehaciente ) evidencing that the calculation of the debt owed by the Spanish Loan Party (in Spanish: liquidación ) made has been done according to the procedure set forth in this Agreement by the Parties;

 

(iv)        prior to commencing enforcement actions in connection with this Agreement or any Loan Document affecting a Spanish Loan Party, to the extent permitted by law, the Administrative Agent, failing which, the relevant Lender, shall deliver a copy of the relevant statement referred to in (iii) above to the relevant Spanish Loan Party through judicial or notarial means, which shall express the total amount due; and

 

(v)         if an Event of Default is continuing each Spanish Loan Party, as the case may be, will, at the request of the Administrative Agent, enter into one or more notarial deeds ( escritura pública ) in the form and substance satisfactory to the Administrative Agent and take all other actions required by the Administrative Agent to ensure that the obligations of any Spanish Loan Party under any guarantee entered by it are raised to the status of a Spanish notarial deed.

 

10.10       Collateral and Guaranty Matters .

 

(a)          Each of the Lenders (including in its capacities as a potential Qualified Counterparty and a potential Cash Management Provider) and the Issuing Lenders irrevocably authorize the Administrative Agent (without requirement of notice to or consent of any Lender except as expressly required by Section 11.1 ): (i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (1) at the time the property subject to such Lien is Disposed of or to be Disposed of as part of or in connection with any Disposition permitted hereunder or under any other Loan Document to any Person other than a Loan Party, (2) subject to Section 11.1 , if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders, (3) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under the Guarantee or (4) that constitutes Excluded Assets or any property that is excluded from the Collateral pursuant to the Agreed Security Principles; (ii) to release or subordinate, as expressly permitted hereunder, any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by this Agreement to the extent required by the holder of, or pursuant to the terms of any agreement governing, the obligations secured by such Liens; (iii) to release any Guarantor from its obligations under the Guarantee if such Person ceases to be a Restricted Subsidiary or (subject to Section 6.9(c) ) becomes an Excluded Subsidiary as a result of a transaction or designation permitted hereunder; (iv) to amend Section 8.12 to the extent permitted by Section 8.12(g) and to give effect to any limitations set forth in Section 8.12 in any Guarantor Joinder Agreement and/or Co-Borrower Joinder applicable to any Guarantor; (v) to amend any Security Document to give effect to any limitations set forth in the Agreed Security Principles and (vi) to release any Collateral or Guarantor Obligations to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 11.1 .

 

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(b)          Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release (pursuant to clause (a) above) any Guarantor from its obligations under the Guarantee.

 

(c)          At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than (i) contingent obligations for which no claim has been made, (ii) Cash Management Obligations as to which arrangements reasonably satisfactory to the Cash Management Providers have been made and (iii) obligations under Specified Swap Agreements as to which arrangements reasonably satisfactory to the Qualified Counterparties have been made) shall have been satisfied by payment in full in immediately available funds, the Commitments have been terminated and no Letters of Credit shall be outstanding or all outstanding Letters of Credit have been Collateralized, the Collateral shall be automatically released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Group Member under the Security Documents shall automatically terminate, all without delivery of any instrument or performance of any act by any Person.

 

(d)          If (i) a Guarantor was released from its obligations under the Guarantee, (ii) a Co-Borrower was released from its obligations under the Loan Documents or (iii) the Collateral was released from the assignment and security interest granted under the Security Document (or the interest in such item subordinated), the Administrative Agent will (and each Lender irrevocably authorizes the Administrative Agent to) execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such Guarantor from its obligations under the Guarantee or such Co-Borrower from its obligations under the Loan Documents, the release of such item of Collateral from the assignment and security interest granted under the Security Documents or to subordinate its interest in such item, in each case in accordance with the terms of the Loan Documents and this Section 10.10 .

 

(e)          If as a result of any transaction not prohibited by this Agreement (i) subject to Section 6.9(c) , any Guarantor or Co-Borrower becomes an Excluded Subsidiary or (ii) any Guarantor or Co-Borrower is sold (or consolidates or merges with a Person that is not a Loan Party), then (x) such Guarantor’s Guarantee (or the obligations of such Co-Borrower under the Loan Documents) shall be automatically released, and (y) the Capital Stock of such Guarantor or Co-Borrower (other than, in the case of a Guarantor or Co-Borrower that is an Excluded Subsidiary solely by reason of being a CFC or a FSHCO, 65% of the total outstanding voting Capital Stock and 100% of the total outstanding non-voting Capital Stock of such Guarantor or such Co-Borrower that, in each case, is directly owned by a Borrower or another Guarantor) shall be automatically released from the security interests created by the Loan Documents, or (iii) any Excluded Subsidiary ceases to be directly owned by a Borrower or Guarantor, then the Capital Stock of such Subsidiary shall be automatically released from any security interests created by the Loan Documents. In connection with any termination or release pursuant to this Section 10.10(e) , the Administrative Agent and any applicable Lender shall promptly execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 10.10(e) shall be without recourse to or warranty by the Administrative Agent or any Lender.

 

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10.11      Intercreditor Agreements .

 

The Lenders hereby authorize the Administrative Agent to enter into an Intercreditor Agreement and any other intercreditor agreement or arrangement permitted under this Agreement (and any amendments, amendments and restatements, restatements or waivers of, or supplements or other modifications to, any such agreement or arrangement permitted under this Agreement), and any such agreement or arrangement will be binding upon the Lenders.

 

Except as otherwise expressly set forth herein or in any Security Document, no Qualified Counterparty or Cash Management Provider that obtains the benefits of Section 9.5 , any Guarantee or any Collateral by virtue of the provisions hereof or of any Guarantee or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Section 10 to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Cash Management Obligations and Obligations arising under Specified Swap Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Provider or Qualified Counterparty, as the case may be.

 

10.12      Withholding Tax Indemnity . To the extent required by any applicable Laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. If the Internal Revenue Service or any other authority of the United States or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold Tax from amounts paid to or for the account of any Lender for any reason (including because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding Tax ineffective), such Lender shall, within 10 days after written demand therefor, indemnify and hold harmless the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrowers or any other Loan Party pursuant to Sections 2.16 and 2.19 and without limiting or expanding the obligation of the Borrowers or any other Loan Party to do so) for all amounts paid, directly or indirectly, by the Administrative Agent as Taxes or otherwise, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses, whether or not such Tax was correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due the Administrative Agent under this Section 10.12 . The agreements in this Section 10.12 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender and the repayment, satisfaction or discharge of all other Obligations. For the avoidance of doubt, a “Lender” shall, for purposes of this Section 10.12 , include any Issuing Lender and the Swingline Lender.

 

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10.13      Indemnification . Each of the Lenders agrees to indemnify the Administrative Agent and the Joint Lead Arrangers (and their Related Parties) in their respective capacities as such (to the extent not reimbursed by any Loan Party and without limiting or expanding the obligation of the Loan Parties to do so), according to its Aggregate Exposure Percentage in effect on the date on which indemnification is sought under this Section 10.13 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, in accordance with its Aggregate Exposure Percentage immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent, the Joint Lead Arrangers or their Related Parties (the foregoing, the “ Lender Indemnitees ”) in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent or any other Person under or in connection with any of the foregoing; provided that no Lender shall be liable to any Lender Indemnitee for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent that they are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Lender Indemnitee. The agreements in this Section 10.13 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

10.14      Appointment of Incremental Arrangers, Refinancing Arrangers and Loan Modification Agents . In the event that the Borrower Representative appoints or designates any Incremental Arranger, Refinancing Arranger or Loan Modification Agent pursuant to (and subject to) Sections 2.25 , 2.26 and 2.28 , as applicable, (i) each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to an agent or arranger with respect to the Incremental Loans, Permitted Credit Agreement Refinancing Debt or Loan Modification Agreement, as applicable, shall be exercisable by and vest in such Incremental Arranger, Refinancing Arranger or Loan Modification Agent to the extent, and only to the extent, necessary to enable such Incremental Arranger, Refinancing Arranger or Loan Modification Agent to exercise such rights, powers and privileges with respect to the Incremental Loans, Permitted Credit Agreement Refinancing Debt or Loan Modification Agreement, as applicable, and to perform such duties with respect to such Incremental Loans, Permitted Credit Agreement Refinancing Debt or Loan Modification Agreement, as applicable, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Incremental Arranger, Refinancing Arranger or Loan Modification Agent shall run to and be enforceable by either the Administrative Agent or such Incremental Arranger, Refinancing Arranger or Loan Modification Agent, and (ii) the provisions of this Section 10 and of Section 11.5 (obligating the Borrower Representative to pay the Administrative Agent’s expenses and to indemnify the Administrative Agent) that refer to the Administrative Agent shall inure to the benefit of the Administrative Agent and such Incremental Arranger, Refinancing Arranger or Loan Modification Agent and all references therein to the Administrative Agent shall be deemed to be references to the Administrative Agent and/or such Incremental Arranger, Refinancing Arranger or Loan Modification Agent, as the context may require. Each Lender and Issuing Lender hereby irrevocably appoints any Incremental Arranger, Refinancing Arranger or Loan Modification Agent to act on its behalf hereunder and under the other Loan Documents pursuant to (and subject to) Sections 2.25 , 2.26 and 2.28 , as applicable, and designates and authorizes such Incremental Arranger, Refinancing Arranger or Loan Modification Agent to take such actions on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to such Incremental Arranger, Refinancing Arranger or Loan Modification Agent by the terms of this Agreement or any other Loan Document, together with such actions and powers as are reasonably incidental thereto.

 

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SECTION 11.
MISCELLANEOUS

 

11.1        Amendments and Waivers .

 

(a)          Except as otherwise provided in clause (b) below or elsewhere in this Agreement, neither this Agreement nor any other Loan Document (or any terms hereof or thereof) may be amended, supplemented or modified other than in accordance with the provisions of this Section 11.1 . The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided , however , that no such waiver and no such amendment, supplement or modification shall (A) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of the Required Lenders) and (y) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (A)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lender’s Commitment or increase such Lender’s Commitment, in each case without the written consent of each Lender directly and adversely affected thereby; (B) amend, modify, eliminate or reduce the voting rights of any Lender under this Section 11.1 without the written consent of all Lenders; (C) (x) reduce any percentage specified in the definition of Required Lenders, (y) consent to the assignment or transfer by any Top Borrower of any of its rights and obligations under this Agreement and the other Loan Documents (other than in connection with a Tower Borrower Release) and (z) release all or substantially all of the Collateral or release any of the Guarantors from their obligations under Section 8 of this Agreement or under any Security Agreement, in each case other than as permitted under this Agreement and the Loan Documents, without the written consent of all Lenders; (D) amend, modify or waive any provision of Section 2.17(a) or (b) which results in a change to the pro   rata application of Loans under any Facility without the written consent of each Lender directly and adversely affected thereby in respect of each Facility adversely affected thereby, unless the amendment is made in connection with an amendment pursuant to paragraph (b) below, in which case the written consent of the Required Lenders shall be required; (E) reduce the percentage specified in the definition of any of Majority Revolving Lenders or Majority Term Lenders without the written consent of all Lenders under such Facility; (F) amend, modify or waive any provision of Section 10 without the written consent of the Administrative Agent; (G) amend, modify or waive any provision of Sections 2.6 or  2.7 without the written consent of the Swingline Lender; (H) amend or modify the application of prepayments set forth in Section 2.11(g) in a manner that adversely affects any Facility without the written consent of the Majority Facility Lenders of each adversely affected Facility; (I) forgive the principal amount or extend the payment date of any Reimbursement Obligation without the written consent of each Lender directly and adversely affected thereby; or (J) change the currency in which any Loan is denominated without the written consent of each Lender holding such Loan; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the applicable Issuing Lender, affect its rights or duties under this Agreement or under any Application or other document, agreement or instrument entered into by such Issuing Lender and a Borrower (or any Restricted Subsidiary ) pertaining to one or more Letters of Credit issued or to be issued by such Issuing Lender hereunder (except that this Agreement may be amended (A) to adjust the mechanics related to the issuance of Letters of Credit, including mechanical changes relating to the existence of multiple Issuing Lenders, with only the written consent of the Administrative Agent, the applicable Issuing Lender and the Borrower Representative if the obligations of the Revolving Lenders, if any, who have not executed such amendment, and if applicable the other Issuing Lenders, if any, who have not executed such amendment, are not adversely affected thereby and (B) to adjust the L/C Sublimits of one or more Issuing Lenders after consultation with the Administrative Agent and any affected Issuing Lenders in a manner which does not result in the aggregate L/C Sublimits exceeding the L/C Commitment with only the written consent (with a copy to the Administrative Agent and any affected Issuing Lenders) of the Borrowing Representative or those Issuing Lenders whose L/C Sublimits may be increased). Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing during the period such waiver is effective; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

 

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(b)          Notwithstanding anything in this Agreement (including clause (a) above) or any other Loan Document to the contrary:

 

(i)          this Agreement may be amended (or amended and restated) with the written consent of the Administrative Agent, the Issuing Lenders (to the extent affected), each Lender participating in the additional or extended credit facilities contemplated under this paragraph (b)(i) and the Borrowers (w) to add one or more additional credit facilities to this Agreement or to increase the amount of the existing facilities under this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and Revolving Extensions of Credit and the accrued interest and fees in respect thereof, (x) to permit any such additional credit facility which is a term loan facility or any such increase in the Term Facility to share ratably in prepayments with the Term Loans, (y) to permit any such additional credit facility which is a revolving loan facility or any such increase in the Revolving Facility to share ratably in prepayments with the Revolving Facility and (z) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Majority Facility Lenders;

 

(ii)         this Agreement may be amended with the written consent of the Administrative Agent, the Borrowers and the Lenders providing the relevant Repriced Term Loans (as defined below) to permit a (x) any prepayment, repayment, refinancing, substitution or replacement of all or a portion of the Term Loans with the proceeds of, or any conversion of Term Loans into, any new or replacement tranche of syndicated term loans bearing interest with an “effective yield” (taking into account interest rate margin and benchmark floors, recurring fees and all upfront or similar fees or original issue discount (amortized over the shorter of (A) the weighted average life to maturity of such term loans and (B) four years), but excluding any arrangement, commitment, structuring, syndication or other fees payable in connection therewith that are not shared ratably with all lenders or holders of such term loans in their capacities as lenders or holders of such term loans) less than the “effective yield” applicable to the Term Loans (determined on the same basis as provided in the preceding parenthetical) and (y) any amendment to the Term Loans or any tranche thereof which reduces the “effective yield” applicable to such Term Loans, as applicable (as determined on the same basis as provided in clause (x)) (“ Repriced Term Loans ”); provided that the Repriced Term Loans shall otherwise meet the Applicable Requirements;

 

(iii)        this Agreement may be amended with the written consent of the Administrative Agent, the Borrowers and the Lenders providing the relevant Repricing Indebtedness to permit any Repricing Transaction;

 

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(iv)        this Agreement and the other Loan Documents may be amended or amended and restated as contemplated by Section 2.25 in connection with any Incremental Amendment and any related increase in Commitments or Loans, with the consent of the Borrowers, the Administrative Agent and the Incremental Term Lenders providing such increased Commitments or Loans ( provided that, if any Incremental Term Loans are intended to have rights to share in the Collateral on a second lien, subordinated basis to the Obligations, then the Administrative Agent may enter into an intercreditor agreement (or amend, supplement or modify the intercreditor agreement) as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the terms of any such Incremental Term Loans);

 

(v)         this Agreement and the other Loan Documents may be amended in connection with the incurrence of any Permitted Credit Agreement Refinancing Debt pursuant to Section 2.26 to the extent (but only to the extent) necessary to reflect the existence and terms of such Permitted Credit Agreement Refinancing Debt (including any amendments necessary to treat the Loans and Commitments subject thereto as Other Term Loans, Other Revolving Loans, Other Revolving Commitments and/or Other Term Commitments), with the written consent of the Borrowers, the Administrative Agent and each Additional Lender and Lender that agrees to provide any portion of such Permitted Credit Agreement Refinancing Debt (a “ Refinancing Amendment ”) ( provided that the Administrative Agent and the Borrowers may effect such amendments to this Agreement, any Intercreditor Agreement (or enter into a replacement thereof) and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrowers, to effect the terms of such Refinancing Amendment);

 

(vi)        this Agreement and the other Loan Documents may be amended in connection with any Permitted Amendment pursuant to a Loan Modification Offer in accordance with Section 2.28(b) (and the Administrative Agent and the Borrowers may effect such amendments to this Agreement, any Intercreditor Agreement (or enter into a replacement thereof) and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrowers, to effect the terms of such Permitted Amendment);

 

(vii)       the Administrative Agent may amend any Intercreditor Agreement or any other intercreditor agreement (or enter into a replacement thereof), additional Security Documents and/or replacement Security Documents (including a collateral trust agreement) in connection with the incurrence of (x) any Permitted First Priority Refinancing Debt to provide that a Senior Representative acting on behalf of the holders of such Indebtedness shall become a party thereto and shall have rights to share in the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations, (y) any Permitted Second Priority Refinancing Debt to provide that a Senior Representative acting on behalf of the holders of such Indebtedness shall become a party thereto and shall have rights to share in the Collateral on a second lien, subordinated basis to the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt or (z) any Indebtedness incurred pursuant to Section 7.2(b)(vi) to provide that an agent, trustee or other representative acting on behalf of the holders of such Indebtedness shall become a party thereto and shall have rights to share in the Collateral on a pari passu or second lien, subordinated basis to the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt;

 

(viii)      only the consent of the Majority Revolving Lenders shall be necessary to amend, modify or waive Sections 5.2 (with respect to the making of Revolving Loans or Swingline Loans or the issuance of Letters of Credit), 7.1 , 9.1(d) , 9.3(b) and 9.4 ;

 

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(ix)         amendments and waivers of this Agreement and the other Loan Documents that affect solely the Lenders under any applicable Class under the Term Facility, Revolving Facility or any Incremental Facility (including waiver or modification of conditions to extensions of credit under the Term Facility, Revolving Facility or any Incremental Facility, the availability and conditions to funding of any Incremental Facility, pricing and other modifications, and in respect of the Revolving Facility, the obligations of Holdings contained in Section 7.1 (or the definition of Total First Lien Net Leverage Ratio for purposes thereof)) will require only the consent of Lenders holding more than 50% of the aggregate commitments or loans, as applicable, under such Class, and, in each case, (x) no other consents or approvals shall be required and (y) any fees or other consideration payable to obtain such amendments or waivers need only be offered on a pro rata basis to the Lenders under the affected Class; and

 

(x)          this Agreement and the other Loan Documents may be amended with the consent of the Administrative Agent and the Borrowers (A) to the extent permitted by Section 8.12(g) or to give effect to any limitations set forth in the Agreed Security Principles, (B) to correct any mistakes or ambiguities of a technical nature and (C) to add any terms or conditions for the benefit of Lenders (or any Class thereof).

 

11.2          Notices . All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy or email, if applicable), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy or email notice, when received, addressed as follows in the case of the Borrower Representative, any Tower Borrower, any Co-Borrowers, the Guarantors and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

 

To the Borrower Representative:  

Camelot U.S. Acquisition 1 Co.

1500 Spring Garden

Philadelphia, PA 19130

Phone: 215-386-0100

     
To any Tower Borrower, Co-Borrower or Guarantor:   c/o the Borrower Representative at the address set forth above
     
To the Administrative Agent:  

Administrative Agent’s Office :

 

Credit Suisse AG

Attn: Loan Operations – Agency Manager

Eleven Madison Avenue, 9th Floor

New York, NY 10010

Phone: 919-994-6369

Fax: 212-322-2291

Email: agency.loanops@credit-suisse.com

 

 

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To Credit Suisse, as Issuing Lender:  

Credit Suisse AG

Eleven Madison Avenue, 9th Floor

New York, NY 10010

Phone: 212-538-1370

Fax: 212-325-8315

Email: list.ib-lettersofcredit-ny@credit-suisse.com

     
To the Collateral Agent:  

Credit Suisse AG

Attn: Loan Operations – Boutique Management

Eleven Madison Avenue, 9th Floor

New York, NY 10010

Tel: (212) 538-3525

Fax: 212-325-8315

E-mail: list.ops-collateral@credit-suisse.com ;

 

provided that any notice, request or demand to or upon the Administrative Agent or the Lenders shall not be effective until received. In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder. All telephonic notices to the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender (“ Approved Electronic Communications ”). The Administrative Agent or the Borrowers may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (b) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (a) of notification that such notice or communication is available and identifying the website address therefor.

 

Each Loan Party agrees to assume all risk, and hold the Administrative Agent, the Joint Bookrunners and each Lender harmless from any losses, associated with, the electronic transmission of information (including the protection of confidential information), except to the extent caused by the gross negligence or willful misconduct of such Person.

 

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THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

Each Loan Party, the Lenders, the Issuing Lenders, the Joint Lead Arrangers, the Joint Bookrunners and the Administrative Agent agree that the Administrative Agent may, but shall not be obligated to, store any Approved Electronic Communications on the Platform in accordance with Administrative Agent’s customary document retention procedures and policies.

 

Each of UK Holdco the Borrowers, the Administrative Agent, Issuing Lenders and Swingline Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower Representative, the Administrative Agent, the Issuing Lenders and the Swingline Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to documents or notices that are not made available through the “Public Side Information” portion of the Platform and that may contain Private Lender Information.

 

11.3        No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

11.4        Survival of Representations and Warranties . All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

 

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11.5        Payment of Expenses . The Borrowers agree upon the occurrence of the Closing Date (a) to pay or reimburse the Joint Lead Arrangers, the Joint Bookrunners, the Issuing Lenders, the Swingline Lender and the Administrative Agent (without duplication) for all their reasonable and documented out-of-pocket costs and expenses incurred in connection with the syndication of the Facilities and the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of one primary outside counsel to the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Joint Lead Arrangers and the Joint Bookrunners, taken as a whole, and one local counsel to the foregoing Persons, taken as a whole, in each appropriate jurisdiction (which may include one special counsel acting in multiple jurisdictions) (and additional counsel in the case of actual or perceived conflicts where such Person informs the Borrowers of such conflict and retains such counsel), and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Company Borrowers on or prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each Lender, each Issuing Lender, the Swingline Lender and the Administrative Agent for all of their reasonable and documented out-of-pocket costs and expenses (other than allocated costs of in-house counsel) incurred in connection with the workout, restructuring, enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the reasonable and documented fees and disbursements of one primary counsel to the Lenders, the Issuing Lenders, the Swingline Lender, the Administrative Agent, the Joint Lead Arrangers and the Joint Bookrunners, taken as a whole, and one local counsel to the foregoing Persons, taken as a whole, in each appropriate jurisdiction (which may include one special counsel acting in multiple jurisdictions) (and in the case of an actual or perceived conflict of interest by any of the foregoing Persons, where such Person informs the Borrowers of such conflict and retains such counsel, additional counsel to such affected Person), (c) to pay, indemnify, and hold each Lender, each Issuing Lender, the Swingline Lender and the Administrative Agent harmless from, any and all recording and filing fees that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender, each Issuing Lender, the Swingline Lender, the Administrative Agent, each Joint Lead Arranger, each Joint Bookrunner, each of their respective Affiliates that are providing services in connection with the financing contemplated by this Agreement and each member (and successors and assigns), officer, director, trustee, employee, agent and controlling person of the foregoing (each, an “ Indemnitee ”) harmless from and against any and all other claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to or arising out of or in connection with the Acquisition, the transactions contemplated hereby, any transactions connected therewith and the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents (regardless of whether any Indemnitee is a party hereto and regardless of whether any such matter is initiated by a third party, the Borrowers, any other Loan Party or any other Person), including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law relating to Holdings or any Group Member or any of the Properties and the reasonable fees and expenses of one primary legal counsel to the Indemnitees, taken as a whole (or in the case of an actual or perceived conflict of interest by an Indemnitee, where such Person informs the Borrowers of such conflict and retains such counsel, additional counsel to the affected Indemnitees), and one local counsel in each appropriate jurisdiction (which may include one special counsel acting in multiple jurisdictions) to the Indemnitees in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the “ Indemnified Liabilities ”) (but excluding any losses, liabilities, claims, damages, costs or expenses relating to the matters referred to in Sections 2.18 , 2.19 and 2.21 (which shall be the sole remedy in respect of the matters set forth therein)), provided that the Borrowers shall not have any obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are (i) (A) found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee, (B) found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from a material breach of the Loan Documents by such Indemnitee, (C) any dispute that does not involve an act or omission by the Borrowers, Holdings or any of their respective Affiliates and that is brought by any Indemnitee against any other Indemnitee (other than in its capacity as Administrative Agent, Joint Lead Arranger, Joint Bookrunner, Swingline Lender, Issuing Lender or similar role hereunder) or (D) directly and exclusively caused, with respect to the violation of, noncompliance with or liability under, any Environmental Law relating to any of the Properties, by the act or omissions by Persons other than the Borrowers or any Subsidiary of the Borrowers or their respective Related Parties with respect to the applicable Property that occur after the Administrative Agent sells the respective Property pursuant to a foreclosure or has accepted a deed in lieu of foreclosure or (ii) settlements entered into by such person without the Borrowers’ written consent (such consent to not be unreasonably withheld, conditioned or delayed). All amounts due under this Section 11.5 shall be payable not later than 10 days after written demand therefor. Statements payable by the Borrowers pursuant to this Section 11.5 shall be submitted to the Borrowers at the address of the Borrowers set forth in Section 11.2 , or to such other Person or address as may be hereafter designated by the Borrowers in a written notice to the Administrative Agent. This Section 11.5 shall not apply with respect to Taxes (other than any Taxes that represent losses, claims or damages arising from any non-Tax claim). The agreements in this Section 11.5 shall survive the termination of this Agreement and the repayment of the Loans and all other amounts payable hereunder.

 

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11.6        Successors and Assigns; Participations and Assignments .

 

(a)          The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of any Issuing Lender that issues any Letter of Credit), except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and the Administrative Agent (and any attempted assignment or transfer by any Borrower without such consent shall be null and void).

 

(b)          (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible Assignees (each, an “ Assignee ”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it and the Note or Notes (if any) held by it) with the prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) of:

 

(A) in the case of any Term Lender (other than with respect to Incremental Term Loans and Incremental Term Commitments), any Revolving Lender or Incremental Term Lender (with respect to Incremental Term Loans and Incremental Term Commitments), the Borrower Representative, provided that such consent shall be deemed to have been given if the Borrower Representative, as the case may be, has not responded within 10 Business Days after notice by the Administrative Agent, provided , further , that no consent of the Borrower Representative shall be required (x) in the case of the Revolving Facility, for an assignment to any existing Lender under the Revolving Facility or, if an Event of Default under Section 9.1(a) (or, in respect of any Company Borrower, Section 9.1(g) ), or Section 9.2(a) (or, in respect of any Tower Borrower, Section 9.2(f) ) has occurred and is continuing, any other Eligible Assignee or (y) in the case of the Term Facility, for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of Default under Section 9.1(a) (or, in respect of any Opco Borrower, Section 9.1(g)), or Section 9.2(a) (or, in respect of any Tower Borrower, Section 9.2(f) ) has occurred and is continuing, any other Eligible Assignee;

 

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(B) except with respect to an assignment of Term Loans to an existing Lender, an Affiliate of a Lender or an Approved Fund, the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed); and

 

(C) with respect to any proposed assignment of all or a portion of any Revolving Loan or Revolving Commitment, the Swingline Lender and each Issuing Lender.

 

(ii)         Assignments shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than (i) with respect to Term Loans, $1,000,000, and (ii) with respect to Revolving Loans and Revolving Commitments, $5,000,000 ( provided that, in each case, that simultaneous assignments to or by two or more Approved Funds shall be aggregated for purposes of determining such amount) unless the Administrative Agent and, in the case of Term Loans (other than Incremental Term Loans), Revolving Commitments or Revolving Loans or Incremental Term Loans or Incremental Term Commitments, the Borrower Representative otherwise consents;

 

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(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption via an electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually), and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which such fee may be waived or reduced in the sole discretion of the Administrative Agent) for each assignment or group of affiliated or related assignments (it being understood that such recordation fee shall not apply to any assignments by any of the Initial Lenders or any of their Affiliates); and

 

(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire and applicable Forms.

 

This paragraph (b) shall not prohibit any Lender from assigning all or any portion of its rights and obligations among separate Facilities on a non- pro   rata basis.

 

For the purposes of this Section 11.6 , “ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

(iii)         Assignments to Permitted Auction Purchasers . Each Lender acknowledges that each Permitted Auction Purchaser is an Eligible Assignee hereunder and may purchase or acquire Term Loans hereunder from Lenders from time to time (x) pursuant to a Dutch Auction in accordance with the terms of this Agreement (including Section 11.6 hereof), subject to the restrictions set forth in the definitions of “Eligible Assignee” and “Dutch Auction” or (y) pursuant to open market purchases, in each case, subject to the following limitations:

 

(A) each Permitted Auction Purchaser agrees that, notwithstanding anything herein or in any of the other Loan Documents to the contrary, with respect to any Auction Purchase or other acquisition of Term Loans, (1) under no circumstances, whether or not any Loan Party is subject to a bankruptcy or other insolvency proceeding, shall such Permitted Auction Purchaser be permitted to exercise any voting rights or other privileges with respect to any Term Loans and any Term Loans that are assigned to such Permitted Auction Purchaser shall have no voting rights or other privileges under this Agreement and the other Loan Documents and shall not be taken into account in determining any required vote or consent and (2) such Permitted Auction Purchaser shall not receive information provided solely to Lenders by the Administrative Agent or any Lender and shall not be permitted to attend or participate in meetings attended solely by Lenders and the Administrative Agent and their advisors; rather, all Loans held by any Permitted Auction Purchaser shall be automatically Cancelled immediately upon the purchase or acquisition thereof in accordance with the terms of this Agreement (including Section 11.6 hereof);

 

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(B) at the time any Permitted Auction Purchaser is making purchases of Loans it shall enter into an Assignment and Assumption Agreement;

 

(C) immediately upon the effectiveness of each Auction Purchase or other acquisition of Term Loans, a Cancellation (it being understood that such Cancellation shall not constitute a voluntary repayment of Loans for purposes of this Agreement) shall be automatically irrevocably effected with respect to all of the Loans and related Obligations subject to such Auction Purchase, with the effect that such Loans and related Obligations shall for all purposes of this Agreement and the other Loan Documents no longer be outstanding, and the Borrowers and the Guarantors shall no longer have any Obligations relating thereto, it being understood that such forgiveness and cancellation shall result in the Borrowers and the Guarantors being irrevocably and unconditionally released from all claims and liabilities relating to such Obligations which have been so cancelled and forgiven, and the Collateral shall cease to secure any such Obligations which have been so cancelled and forgiven; and

 

(D) at the time of such Purchase Notice and Auction Purchase or other acquisition of Term Loans, (w) no Default or Event of Default shall have occurred and be continuing, (x) Holdings, the Borrowers or any of their respective Affiliates shall not be required to make any representation that it is not in possession of material non-public information with respect to Holdings, the Borrowers, their respective subsidiaries or their respective securities, (y) any Affiliated Lender that is a Purchaser shall identify itself as such and (z) no proceeds of Revolving Loans shall be used to consummate the Auction Purchase.

 

Notwithstanding anything to the contrary herein, this Section 11.6(b)(iii) shall supersede any provisions in Section 2.17 to the contrary.

 

(iv)         Assignments to Affiliated Lenders . Any Lender may, at any time, assign all or a portion of its rights and obligations with respect to the Term Loans to an Affiliated Lender through (x) Dutch Auctions open to all Lenders on a pro   rata basis or (y) open market purchases, in each case subject to the following limitations:

 

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(A) notwithstanding anything in Section 11.1 or the definition of “Required Lenders” to the contrary, for purposes of determining whether the Lenders have (1) consented to any amendment, waiver or modification of any Loan Document (including such modifications pursuant to Section 11.1 ), (2) otherwise acted on any matter related to any Loan Document, (3) directed or required Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, or (4) subject to Section 2.23 , voted on any plan of reorganization pursuant to Title 11 of the United States Code, that in either case does not require the consent of each Lender or each affected Lender or does not adversely affect such Affiliated Lender disproportionately in any material respect as compared to other Lenders, the Sponsors and any Non-Debt Fund Affiliate will be deemed to have voted in the same proportion as Lenders that are not Affiliated Lenders voting on such matter; and the Sponsors and each Non-Debt Fund Affiliate each hereby acknowledges, agrees and consents that if, for any reason, its vote to accept or reject any plan pursuant to Title 11 of the United States Code) is not deemed to have been so voted, then such vote will be (x) deemed not to be in good faith and (y) “designated” pursuant to Section 1126(e) of Title 11 of the United States Code such that the vote is not counted in determining whether the applicable class has accepted or rejected such plan in accordance with Section 1126(c) of Title 11 of the United States Code; provided that, for the avoidance of doubt, Debt Fund Affiliates shall not be subject to such limitation and shall be entitled to vote as any other Lender; provided , further , that, notwithstanding the foregoing or anything herein to the contrary, Debt Fund Affiliates may not in the aggregate account for more than 49.9% of the amounts set forth in the calculation of Required Lenders and any amount in excess of 49.9% will be subject to the limitations set forth in this clause (A);

 

(B) the Sponsors and Non-Debt Fund Affiliates shall not receive information provided solely to Lenders by the Administrative Agent or any Lender and shall not be permitted to attend or participate in meetings attended solely by Lenders and the Administrative Agent and their advisors, other than the right to receive notices of Borrowings, notices of prepayments and other administrative notices in respect of its Loans or Commitments required to be delivered to Lenders pursuant to Section 2 ;

 

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(C) at the time any Affiliated Lender is making purchases of Loans pursuant to a Dutch Auction it shall identify itself as an Affiliated Lender and shall enter into an Assignment and Assumption Agreement;

 

(D) with respect to a Dutch Auction, at the time of such Purchase Notice and Auction Purchase, no Affiliated Lender shall be required to make any representation that it is not in possession of material non-public information with respect to Holdings, the Borrowers, their respective Subsidiaries or their respective securities;

 

(E) the aggregate principal amount of all Term Loans which may be purchased by the Sponsors or any Non-Debt Fund Affiliate through Dutch Auctions or assigned to the Sponsors or any Non-Debt Fund Affiliate through open market purchases shall in no event exceed, as calculated at the time of the consummation of any aforementioned Purchases or assignments, 25% of the aggregate Outstanding Amount of the Term Loans at such time; and

 

(F) the Sponsors, the Non-Debt Fund Affiliates and their respective Affiliates shall not be permitted to vote on bankruptcy plans or reorganization.

 

Notwithstanding anything to the contrary herein, this Section 11.6(b)(iv) shall supersede any provisions in Section 2.17 to the contrary.

 

(v)         Subject to acceptance and recording thereof pursuant to Section 11.6(b)(vii)  below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.18 , 2.19 , 2.21 and 11.5 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.6(b) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations if such transaction complies with the requirements of Section 11.6(c) .

 

(vi)        The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of (and any stated interest on) the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by any Borrower and any Lender as to its own Commitments and amounts owing to it (and, in the case of any Issuing Lender, as to the identity of each other Revolving Lender), at any reasonable time and from time to time upon reasonable prior notice (but not to exceed once per calendar month), and to the extent otherwise necessary to establish that the Commitments, Loans, L/C Obligations or other obligations under the Loan Documents are in registered form under Sections 5f.103-1(c) and 1.871-14(c) of the United States Treasury Regulations.

 

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(vii)       Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire and applicable Forms (unless the Assignee shall already be a Lender hereunder), together with (x) any processing and recordation fee and (y) any written consent to such assignment required by Section 11.6(b) , the Administrative Agent shall promptly accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

(viii)      If, other than in the course of primary syndication, a Lender assigns any of its rights or obligations under this Section 11.6 and as a result of circumstances existing at the date the assignment occurs, a Loan Party would be obliged to make a payment with respect to non-U.S. Taxes to the assignee under Section 2.19(a) or Section 2.19(f) then the assignee is only entitled to receive payment under Section 2.19(a) or Section 2.19(f) with respect to such non-U.S. Taxes to the same extent as the assigning Lender would have been if the assignment had not occurred.

 

(c)          (i) Any Lender may, without the consent of the Borrowers or the Administrative Agent, sell participations to one or more banks or other entities (other than a natural person, a Defaulting Lender, Holdings or any Subsidiary of Holdings) (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Lenders and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires, subject to Section 11.1(b) , the consent of each Lender directly affected thereby pursuant to clauses (A) and (C) of Section 11.1(a) and (2) directly affects such Participant. Subject to Section 11.6(c)(ii) , the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.18 , 2.19 and 2.21 (subject to the requirements of those sections) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.6(b) . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.8(b) as though it were a Lender, provided such Participant shall be subject to Section 11.8(a) as though it were a Lender. Each Lender that sells a participation shall, acting solely for U.S. federal income tax purposes as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the commitment of, and the principal amounts (and stated interest) of, each Participant’s interest in the Loans, L/C Obligations or other obligations under the Loan Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, L/C Obligations or its other obligations under any Loan Document) except to the extent that the relevant parties, acting reasonably and in good faith, determine that such disclosure is necessary to establish that such Commitment, Loan, L/C Obligation or other obligation is in registered form under Sections 5f.103-1(c) and 1.871-14(c) of the United States Treasury Regulations. Unless otherwise required by the Internal Revenue Service (“ IRS ”), any disclosure required by the foregoing sentence shall be made by the relevant Lender directly and solely to the IRS. The entries in the Participant Register shall be conclusive, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

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(ii)         A Participant shall not be entitled to receive any greater payment under Section 2.18 or 2.19 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant. No Participant shall be entitled to the benefits of Section 2.19 unless such Participant complies with Sections 2.19(j) , 2.19(k) , 2.19(m) and 2.19(o) .

 

(d)          Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.

 

(e)          The Borrowers, upon receipt of written notice from the relevant Lender, agree to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in Section 11.6(d)  above.

 

(f)          Each Lender, upon execution and delivery hereof or upon succeeding to an interest in Commitments or Loans, as the case may be, represents and warrants as of the Closing Date or as of the effective date of the applicable Assignment and Assumption, as applicable, that it is a “qualified purchaser” for purposes of Section 2(a)(51) of the Investment Company Act of 1940, as amended.

 

(g)          Each Lender, upon succeeding to an interest in Commitments or Loans, as the case may be, represents and warrants as of the effective date of the applicable Assignment and Assumption that it is an Eligible Assignee.

 

(h)          In case of assignment, transfer or novation by a Lender to a new lender or Participant, of all or any part of its rights and obligations under this Agreement, the Lenders and the new lender or Participant shall agree that, for the purposes of Article 1278 and/or Article 1281 of the Luxembourg Civil Code (to the extent applicable), any assignment, amendment, transfer and/or novation of any kind permitted under, and made in accordance with the provisions of the Agreement or any agreement referred to herein to which a Luxembourg Loan Party is a party (including any Security Document), any security created or guarantee given under the Agreement or in relation to the Agreement shall be preserved and continue in full force and effect to the benefit of the new lender or participant.

 

(i)          Each Spanish Borrower and Spanish Guarantor hereby expressly consents to each assignment, transfer and/or novation of rights or obligations made in accordance with this Section 11.6 (Successors and Assigns; Participations and Assignments). Each Spanish Borrower and Spanish Guarantor also accepts and confirms, for the purposes of the Spanish Civil Code and all other purposes, that all guarantees, indemnities and, if applicable any security interests granted by it under any Loan Document and/or Security Documents will, notwithstanding any such assignment, transfer or novation, continue and be preserved for the benefit of the new lender and each of the other Loan Parties in accordance with the terms of the Loan Documents.

 

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11.7        Release of Tower Group Members’ Obligations . Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, at UK Holdco’s option, the FHC Tower Borrower and Tower Co, on the one hand, and/or the US Tower Borrower and Tower LLC, on the other hand, may be released from all of their rights and obligations under the Loan Documents pursuant to documentation reasonably satisfactory to the Administrative Agent and the Borrower Representative so long as any applicable Opco Borrower is irrevocably released from all of its obligations with respect to the applicable Tower Loan (such release, a “ Tower Borrower Release ”). Without limiting in any way the generality of the foregoing, a Tower Borrower Release may be effected by the applicable Tower Borrower assigning to the applicable Opco Borrower, and the applicable Opco Borrower assuming from such Tower Borrower by novation, all rights and obligations of such Tower Borrower under the Loan Documents, or other release transaction designed to achieve similar effect. Effective immediately upon a Tower Borrower Release, each applicable Tower Group Member shall be automatically released from all of its obligations and liabilities under the Loan Documents and any remaining amounts of the initial investment in such Tower Group Member made by the Sponsors and their Affiliates on the Closing Date (net of any expenditures or other deductions funded from such initial investment and proceeds earned thereon from the making of Investments permitted under this Agreement of such amounts) and any Tower LLC Spread and any Tower Co Spread may be transferred to any Person (including the Sponsors) free and clear of any Liens in favor of the Secured Parties. For the avoidance of doubt, all other property of the applicable Tower Group Members shall be either (i) transferred to the Opco Borrowers and/or the Company Guarantors or (ii) transferred to a Sponsor or an Affiliate thereof subject to the continuing Lien of the Administrative Agent in favor of the Secured Parties, in each case upon the consummation of any Tower Borrower Release. The Lenders hereby authorize and direct the Administrative Agent to execute and deliver all agreements, instruments and other documents reasonably requested by the Opco Borrowers or the Tower Borrowers to accomplish a Tower Borrower Release including such modifications to the Loan Documents as may be necessary or advisable to release the applicable Tower Group Members from any obligations under the Loan Documents. At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than (i) contingent obligations for which no claim has been made, (ii) Cash Management Obligations as to which arrangements reasonably satisfactory to the Cash Management Providers have been made and (iii) obligations under Specified Swap Agreements as to which arrangements reasonably satisfactory to the Qualified Counterparties have been made) shall have been satisfied by payment in full in immediately available funds, the Commitments have been terminated and no Letters of Credit shall be outstanding or all outstanding Letters of Credit have been Collateralized, the Liens created under the Tower Security Documents shall be automatically released, and the Tower Borrower Documents (other than the Loan Note Instrument (Notes)) and all obligations of each Group Member under the Tower Borrower Documents (other than the Loan Note Instrument (Notes)) shall automatically terminate, all without delivery of any instrument or performance of any act by any Person.

 

11.8        Adjustments; Set-off .

 

(a)          Except to the extent that this Agreement expressly provides for or permits payments to be allocated or made to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “ Benefited Lender ”) shall receive any payment of all or part of the Obligations owing to it under any Facility, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9.1(g) or Section 9.2(f) or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender under such Facility, such Benefited Lender shall purchase for cash from the other Lenders under such Facility a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders under such Facility; provided , however , that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

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(b)          In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, with the prior consent of the Administrative Agent, without prior notice to Holdings or any Borrower or any other Loan Party, any such notice being expressly waived by Holdings and the Borrowers and each other Loan Party to the extent permitted by applicable law, upon the occurrence and during the continuance of any Event of Default, to set off and appropriate and apply against the Obligations any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of Holdings or the Borrowers or any such other Loan Party, as the case may be. Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

11.9        No Recourse Against Limited Partners . For the avoidance of doubt, the Administrative Agent and each Lender hereby confirms that it has no recourse against (i) Onex solely in its capacity as limited partner of the FHC Tower Borrower and (ii) Onex solely in its capacity as limited partner of the US Tower Borrower, in each case, with respect to any obligation under this Agreement. For the avoidance of doubt, nothing contained herein shall limit any right of the Administrative Agent or any Lender against Onex under any other agreement that Onex may be party to including, without limitation, the Onex LP US Pledge Agreement and the Onex LP Foreign Pledge Agreement (including, in each case, as applicable, any right to recourse granted thereunder).

 

11.10      Counterparts; Electronic Execution .

 

(a)          This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement or any document or instrument delivered in connection herewith by facsimile transmission or electronic PDF shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower Representative and the Administrative Agent.

 

(b)          The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

11.11      Severability . Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

11.12      Integration . This Agreement, the Commitment Letter, the other Loan Documents and any separate letter agreements with respect to fees payable to the Joint Lead Arranger, the Joint Bookrunners and the Administrative Agent represent the entire agreement of Holdings, the Borrowers, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

 

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11.13      Governing Law . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

11.14      Submission To Jurisdiction; Waivers . Each party hereto hereby irrevocably and unconditionally:

 

(a)          submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York sitting in the borough of Manhattan in New York City, the courts of the United States for the Southern District of New York, and appellate courts from any thereof, to the extent such courts would have subject matter jurisdiction with respect thereto, and agrees that notwithstanding the foregoing (x) a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law and (y) legal actions or proceedings brought by the Secured Parties in connection with the exercise of rights and remedies with respect to Collateral may be brought in other jurisdictions where such Collateral is located or such rights or remedies may be exercised;

 

(b)          consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court and waives any right to claim that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)          CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.2. EACH FOREIGN LOAN PARTY HEREBY IRREVOCABLY APPOINTS THE BORROWER REPRESENTATIVE AS ITS AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN THIS SECTION 11.14 AND THE BORROWER REPRESENTATIVE HEREBY ACCEPTS SUCH APPOINTMENT. EACH FOREIGN LOAN PARTY AGREES THAT SUCH SERVICE (I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT;

 

(d)          agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or limit the right of any Lender to bring proceedings against any Foreign Loan Party in the courts of any jurisdiction or jurisdictions; and

 

(e)          waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof, any special, exemplary, punitive or consequential damages against any Indemnitee.

 

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11.15      Acknowledgements . Each of the Borrowers and Guarantors hereby acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b)          neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to Holdings, the Borrowers or any Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent and Lenders, on one hand, and Holdings, the Borrowers and each Guarantor, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)          no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrowers or the Guarantors and the Lenders.

 

11.16       Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)          the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

 

(i)          the effects of any Bail-in Action on any such liability, including, if applicable:

 

(ii)         a reduction in full or in part or cancellation of any such liability;

 

(iii)        a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iv)        the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

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11.17       Confidentiality . Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement that is not designated by the provider thereof as public information or non-confidential; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners, any other Lender or any Affiliate thereof, (b) subject to an agreement to comply with provisions no less restrictive than this Section, to any actual or prospective Transferee or any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such counterparty) (other than Disqualified Lenders), (c) to its employees, directors, trustees, agents, attorneys, accountants and other professional advisors and to the employees, directors, trustees, agents, attorneys, accountants and other professional advisors of its Affiliates or of actual or prospective Transferees that, in each case, have been advised of the provisions of this Section and have been instructed to keep such information confidential, (d) upon the request or demand of any Governmental Authority or any self-regulatory authority having or asserting jurisdiction over such Person (including any Governmental Authority regulating any Lender or its Affiliates), in which case, to the extent permitted by law, you agree to inform the Company Borrowers promptly thereof prior to such disclosure to the extent practicable (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, in which case, to the extent permitted by law, you agree to inform the Company Borrowers promptly thereof, (f) if requested or required to do so in connection with any litigation or similar proceeding, in which case, to the extent permitted by law, you agree to inform the Company Borrowers promptly thereof; provided that unless specifically prohibited by applicable law, reasonable efforts shall be made to notify the Borrowers of any such request prior to disclosure, (g) that has been publicly disclosed other than as a result of a breach of this Section, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender; provided , such Person has been advised of the provisions of this Section and instructed to keep such information confidential, (i) to market data collectors and service providers to the Administrative Agent or any Lender in connection with the administration and management of the Facilities, (j) to the extent that such information is or was received by the Administrative Agent or any Lender from a third party that is not to the knowledge of the Administrative Agent, such Lender or any affiliates thereof subject to confidentiality obligations owing to any Loan Party, the Sponsors or any of their respective subsidiaries or (k) in connection with the exercise of any remedy hereunder or under any other Loan Document. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the extensions of credit hereunder. Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative, or other agent of any party to this Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure is required to be kept confidential to the extent necessary to comply with any applicable federal or state securities laws.

 

11.18       Waivers Of Jury Trial . EACH OF THE BORROWERS, THE GUARANTORS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.19       USA Patriot Act Notification . The following notification is provided to the Borrowers and each Guarantor pursuant to Section 326 of the Patriot Act:

 

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IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.

 

To help the government fight the funding of terrorism and money laundering activities, U.S. Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product.

 

What this means for any Borrower or Guarantor: When any Borrower or Guarantor opens an account, if such Borrower or Guarantor is an individual, the Administrative Agent and the Lenders will ask for such Borrower’s or Guarantor’s name, residential address, tax identification number, date of birth, and other information that will allow the Administrative Agent and the Lenders to identify such Borrower or Guarantor, and, if such Borrower or Guarantor is not an individual, the Administrative Agent and the Lenders will ask for such Borrower’s or Guarantor’s name, tax identification number, business address, and other information that will allow the Administrative Agent and the Lenders to identify such Borrower or Guarantor. The Administrative Agent and the Lenders may also ask, if any Borrower or Guarantor is an individual, to see such Borrower’s driver’s license or other identifying documents, and, if such Borrower or Guarantor is not an individual, to see such Borrower’s legal organizational documents or other identifying documents.

 

11.20       Maximum Amount .

 

(a)          It is the intention of the Borrowers and the Lenders to conform strictly to the usury and similar laws relating to interest from time to time in force, and all agreements between the Loan Parties and their respective Subsidiaries and the Lenders, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate to the Lenders as interest (whether or not designated as interest, and including any amount otherwise designated but deemed to constitute interest by a court of competent jurisdiction) hereunder or under the other Loan Documents or in any other agreement given to secure the Indebtedness evidenced hereby or other Obligations of the Borrowers, or in any other document evidencing, securing or pertaining to the Indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury or such other laws (the “ Maximum Amount ”). If under any circumstances whatsoever fulfillment of any provision hereof, or any of the other Loan Documents, at the time performance of such provision shall be due, shall involve exceeding the Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Amount. For the purposes of calculating the actual amount of interest paid and/or payable hereunder in respect of laws pertaining to usury or such other laws, all sums paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the Indebtedness of the Borrowers evidenced hereby, outstanding from time to time shall, to the extent permitted by Applicable Law, be amortized, pro-rated, allocated and spread from the date of disbursement of the proceeds of the Loans until payment in full of all of such Indebtedness, so that the actual rate of interest on account of such Indebtedness is uniform through the term hereof. The terms and provisions of this Section 11.20(a) shall control and supersede every other provision of all agreements between the Borrowers or any endorser of the Loans and the Lenders.

 

(b)          If under any circumstances any Lender shall ever receive an amount which would exceed the Maximum Amount, such amount shall be deemed a payment in reduction of the principal amount of the Loans and shall be treated as a voluntary prepayment under Section 2.10 and shall be so applied in accordance with Section 2.17 or if such excessive interest exceeds the unpaid balance of the Loans and any other Indebtedness of the Borrowers in favor of such Lender, the excess shall be deemed to have been a payment made by mistake and shall be refunded to the Borrowers.

 

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11.21       Lender Action . Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, unless expressly provided for herein or in any other Loan Document, without the prior written consent of the Administrative Agent. The provisions of this Section 11.21 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.

 

11.22       No Fiduciary Duty . Each of the Administrative Agent, the Joint Bookrunners, the Joint Lead Arrangers, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of the Loan Parties, their stockholders and/or their Affiliates. In particular, an affiliate of Guggenheim Securities Credit Partners, LLC, is acting as a financial advisor to the Sellers in connection with the Acquisition, for which it will be receiving customary fees. Each Loan Party agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and such Loan Party, its stockholders or its Affiliates, on the other, except as otherwise explicitly provided herein. The Loan Parties acknowledge and agree that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Loan Parties, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of any Loan Party, its stockholders or its Affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise any Loan Party, its stockholders or its Affiliates on other matters) or any other obligation to any Loan Party except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of any Loan Party, its management, stockholders, creditors or any other Person, except as otherwise explicitly provided herein. Each Loan Party acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Each Loan Party agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such Loan Party, in connection with such transaction or the process leading thereto.

 

11.23       Electronic Execution of Assignment and Certain Other Documents . The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.

 

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11.24       Conduct of Business by the Lenders . No provision of this Agreement will (a) interfere with the right of any Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit or (b) oblige any Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim.

 

SECTION 12.
CO-BORROWER ARRANGEMENTS AND BORROWER REPRESENTATIVE

 

12.1         Addition of Co-Borrowers . On the Closing Date, (i) the Borrowers under the Term Facility listed on Schedule 1.1I are each a “Co-Borrower” under the Term Facility for purposes of this Agreement and (ii) the Revolving Borrowers listed on Schedule 1.1I are each a “Co-Borrower” under the Revolving Facility for purposes of this Agreement, and from time to time on or after the Closing Date, the Borrower Representative may designate one or more of the Restricted Subsidiaries as a “Revolver Co-Borrower” with respect to Revolving Borrowings under this Agreement; provided that such Restricted Subsidiary designated after the Closing Date shall not become a Co-Borrower hereunder unless and until each of the following has occurred:

 

(a)          the Administrative Agent and the Revolving Lenders shall have received all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act;

 

(b)          such Co-Borrower shall be organized in an Applicable Jurisdiction;

 

(c)          such Co-Borrower shall have delivered to the Administrative Agent a duly authorized, executed and delivered counterpart signature page to a Co-Borrower Joinder and a Guarantor Joinder Agreement; provided that such Co-Borrower Joinder and such Guarantor Joinder Agreement will incorporate any provisions specific to the designated Co-Borrower’s jurisdiction of organization and applicable Laws of such jurisdiction of organization;

 

(d)          the Co-Borrower shall have delivered to the Administrative Agent a duly authorized, executed and delivered Security Agreement pursuant to Section 6.9 or other security agreements executed and delivered pursuant to Section 6.9 , Section 6.11 , Section 6.15 or Schedule 1.1D-1 (as such schedule may be amended or supplemented from time to time in accordance with the Agreed Security Principles), together with other deliverables reasonably required pursuant to such Section as applied to such Co-Borrower (it being understood and agreed that the Administrative Agent and the Company Borrowers may waive or modify any such requirements to the extent they deem in their mutual discretion such changes are necessary or appropriate under the circumstances taking into account the designated Co-Borrower’s jurisdiction of organization and applicable Laws);

 

(e)          the Administrative Agent shall have received, on behalf of itself and the Lenders, an opinion of counsel (local and/or New York, depending on the circumstances and the relevant market standard), in form and substance reasonably satisfactory to the Administrative Agent with respect to the foregoing documents; and

 

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(f)          the Administrative Agent shall have received (i) a copy of the Organizational Documents, including all amendments thereto, of such designated Co-Borrower, certified, if applicable, as of a recent date by the Secretary of State or similar Governmental Authority of the jurisdiction of its organization, where applicable, and a certificate as to the good standing of such designated Co-Borrower as of a recent date, from such Secretary of State or similar Governmental Authority, and (ii) a certificate of the Secretary or Assistant Secretary (or, in lieu thereof, director(s) authorized to sign on behalf of the designated Co-Borrower) of such designated Co-Borrower certifying (A) that attached thereto is a true and complete copy of the Organizational Documents of such Person as in effect on the date of the Co-Borrower Joinder, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or shareholders (or equivalent governing body) of such Person authorizing the execution, delivery and performance of the Loan Documents and the borrowings thereunder and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that Organizational Documents of such Person have not been amended since the date of the last amendment thereto shown on the Organizational Documents furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document on behalf of such Person and countersigned by another officer as to the incumbency and specimen signature of the Secretary, Assistant Secretary or director of such Person executing the certificate pursuant to clause (ii) above.

 

12.2         Status of Co-Borrowers .

 

(a)          Once a Co-Borrower has become a Co-Borrower in accordance with Section 12.1 , it shall be a “Revolving Borrower” and a “Borrower” under the Revolving Facility (with respect to a Revolver Co-Borrower) or a “Borrower” under the Term Facility (with respect to a Co-Borrower with respect to the Term Facility), as applicable, and with respect to any Revolving Borrower, will have the right to directly request Revolving Borrowings in accordance with Section 2 hereof until the earlier to occur of the Revolving Termination Date or the date on which such Co-Borrower terminates its obligations under this Agreement in accordance with Section 12.3 or the date on which such Co-Borrower is released from its obligations under the Loan Documents in accordance with this Agreement.

 

(b)          Each Tower Borrower, Lux Company Borrower and US Company Borrower hereby accepts joint and several liability hereunder with respect to the Term Loans and under the other Loan Documents in consideration of the financial accommodations with respect to the Term Loans to be provided by Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each such Borrower and in consideration of the undertakings of each such Borrower to accept joint and several liability for the Term Loans. Each Tower Borrower, Lux Company Borrower and US Company Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with each other such Borrower, with respect to the payment of the Term Loans, it being the intention of the parties hereto that the Term Loans shall be the joint and several obligations of each Tower Borrower, Lux Company Borrower and US Company Borrower without preferences or distinction among them. If and to the extent that any Tower Borrower, Lux Company Borrower and US Company Borrower shall fail to make any payment with respect to any of the Term Loans as and when due, then in each such event each other Tower Borrower, Lux Company Borrower and US Company Borrower will make such payment with respect to, the Term Loans.

 

(c)          For the avoidance of doubt, each Revolver Co-Borrower shall be liable solely for its direct Revolving Borrowings and interest and any Letter of Credit fees in respect of Letters of Credit requested by such Revolver Co-Borrower and any reimbursement obligations to the Administrative Agent, the Swingline Lender, the Issuing Lenders and the Lenders that may arise in respect of the foregoing, and no Revolver Co-Borrower in its capacity as such shall have any direct liability whatsoever for any of the Obligations of the Company Borrowers, the Tower Borrowers or any other Revolver Co-Borrower. Notwithstanding the term “Revolver Co-Borrower”, which is used for convenience only, under no circumstance shall any Revolver Co-Borrower in its capacity as such be deemed to be jointly and severally liable for the Obligations of any other Loan Party under any Loan Document. Notwithstanding anything to the contrary set forth in this Section 12.2(c) , this Section 12.2(c) shall in no way limit the obligations of such Revolver Co-Borrower under the Guarantee.

 

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12.3         Resignation of Co-Borrowers . A Co-Borrower may elect to terminate its eligibility to request Borrowings and to cease to be a Co-Borrower hereunder upon the occurrence of, and such resignation shall effective upon, all of the following:

 

(a)          Such resigning Co-Borrower shall have paid in full in cash all of its direct Obligations under the Revolving Facility; and

 

(b)          such resigning Co-Borrower shall have delivered to the Administrative Agent a notice of resignation in form and substance reasonably satisfactory to the Administrative Agent; provided , however , that such resignation shall not, to the extent applicable, have any impact on such Person’s obligations as a Subsidiary Guarantor and such obligations, to the extent applicable, shall continue to be effective in accordance with Section 8 of this Agreement and the other provisions and undertakings hereunder related thereto.

 

12.4         Appointment of Borrower Representative; Nature of Relationship . On the Closing Date, Camelot U.S. Acquisition 1 Co., a Delaware corporation, is hereby appointed by each of the other Borrowers as its contractual representative and after the Closing Date, the Borrowers may appoint a different or additional contractual representative, subject to the Administrative Agent’s consent (such consent not be unreasonably withheld or delayed) (herein referred to as the “ Borrower Representative ”) hereunder and under each other Loan Document, and each of the other Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents.

 

The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Section 12 . Additionally, the Opco Borrowers hereby appoint the Borrower Representative as their agent to receive and direct all of the proceeds of the Loans, at which time the Borrower Representative shall promptly disburse such Loans to the appropriate Opco Borrower. None of the Revolving Lenders or their respective officers, directors, agents or employees shall be liable to the Borrower Representative or any Opco Borrower for any action taken or omitted to be taken by the Borrower Representative or the other Borrowers pursuant to this Section 12.4 .

 

12.5         Powers . The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the other Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

 

12.6         Employment of Agents . The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through its Responsible Officers.

 

12.7         Execution of Loan Documents . The other Borrowers hereby empower and authorize the Borrower Representative, on behalf of such Borrowers, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

  CAMELOT UK HOLDCO LIMITED

 

  By:  /s/ Anthony Morgan
  Name: Anthony Morgan
  Title:  Director

 

  CAMELOT UK BIDCO LIMITED

 

  By:  /s/ Anthony Morgan
  Name: Anthony Morgan
  Title:  Director

 

  CAMELOT FINANCE LP
  By: 2530842 Ontario Inc., its general partner

 

  By:  /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title: President

 

  By:  /s/ Christine M. Donaldson
  Name: Christine M. Donaldson
  Title: Vice President

 

  CAMELOT CAYMAN LP
  acting by: 2530842 Ontario Inc., its general partner

 

  By:  /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title: President

 

  By:  /s/ Christine M. Donaldson
  Name: Christine M. Donaldson
  Title: Vice President

 

  CAMELOT U.S. ACQUISITION 1 CO.
  CAMELOT U.S. ACQUISITION 2 CO.
  CAMELOT U.S. ACQUISITION 3 CO.
  CAMELOT U.S. ACQUISITION 4 CO.
  CAMELOT U.S. ACQUISITION 5 CO. 

 

 

 

 

  CAMELOT U.S. ACQUISITION 6 CO.
  CAMELOT U.S. ACQUISITION 7 CO.
  CAMELOT U.S. ACQUISITION 8 CO.
  CAMELOT U.S. ACQUISITION 9 CO.
  CAMELOT U.S. ACQUISITION 10 CO.
  CAMELOT U.S. ACQUISITION 11 CO.
  CAMELOT U.S. ACQUISITION 12 CO.
  CAMELOT U.S. ACQUISITION 13 CO.

 

  By:  /s/ Konstantin Gilis
  Name: Konstantin Gilis
  Title:   President 

 

  CAMELOT U.S. ACQUISITION LLC

 

  By:  /s/ Konstantin Gilis
  Name: Konstantin Gilis
  Title:   President 

 

 

 

 

  CAMELOT FINANCE S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg, having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg and registered with the Luxembourg Trade and Companies Register under the number B 208514

 

  By: /s/ Konstantin Gilis
  Name: Konstantin Gilis
  Title:   President 

 

  CAMELOT FINANCE LLC
  By: CAMELOT FINANCE LP, its sole shareholder
  By: 2530842 ONTARIO INC., its general partner

 

  By: /s/ Christopher A. Govan
  Name: Christopher A. Gowan
  Title: President

 

  By: /s/ Christine M. Donaldson
  Name: Christine M. Donaldson
  Title: Vice President

 

  CAMELOT TOWERCO

 

  By: /s/ Konstantin Gilis
  Name: Konstantin Gilis
  Title:  Director

 

  CAMELOT PROFESSIONAL K.K.

 

  By: /s/ Konstantin Gilis
  Name: Konstantin Gilis
  Title:  Director

 

  CAMELOT TOWERCO

 

  By: /s/ Anthony Morgan
  Name: Anthony Morgan
  Title:  Director

 

 

 

 

  CENTRE FOR MEDICINES RESEARCH INTERNATIONAL LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

  eBannerMonitor Inc.
  Enterprise Protection Inc.
  RiskSmart Inc.
  MASTER DATA CENTER, INC.
  Atozdomainsmarket, LLC
  CollectiveTrust Solutions, Inc.
  Data Docket Inc.
  Discovery Logic, Inc.
  DNStination Inc.
  Domain Fortress Inc.
  Information Holdings Inc.
  MarkMonitor Inc.
  MarkManager Inc.
  MarkMonitor (ALL-D) Inc.
  MarkMonitor Corporate Services Inc.
  MarkMonitor EU Registrations Inc.
  MarkMonitor Professional Services Inc.
  MicroPatent LLC
  Muckymuck Inc.
  Patent Bounty Inc.
  Technology Universe Company, Inc.
  THOMSON REUTERS (SCIENTIFIC) LLC
  THOMSON & THOMSON INC.

 

  By: /s/ Jonathan Staszewski
  Name: Jonathan Staszewski
  Title: Assistant Treasurer

 

  NETRESULT SOLUTIONS LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

 

 

 

  MARKMONITOR INTERNATIONAL LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

  MARKMONITOR GLOBAL SERVICES LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

  CENTRE FOR INNOVATION IN REGULATORY SCIENCE LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

  CAMELOT UK HOLDCO 2 LIMITED

 

  By: /s/ Anthony Morgan
  Name: Anthony Morgan
  Title: Director

 

  CAMELOT TOWERCO

 

  By: /s/ Vijayabalan Murugesu
  Name: Vijayabalan Murugesu
  Title: Director

 

  By: /s/ John McCoy
  Name: John McCoy
  Title: Director

 

 

 

 

  CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent

 

  By: /s/ Robert Hetu
  Name: Robert Hetu
  Title: Authorized Signatory

 

  By: /s/ Warren Van Heyst
  Name: Warren Van Heyst
  Title: Authorized Signatory

 

  CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as an Issuing Lender and a Lender

 

  By: /s/ Robert Hetu
  Name: Robert Hetu
  Title: Authorized Signatory

 

  By: /s/ Warren Van Heyst
  Name: Warren Van Heyst
  Title: Authorized Signatory

 

 

 

 

  BANK OF AMERICA, N.A., as an Issuing Lender and a Lender

 

  By: /s/ Chris Joseph
  Name: Chris Joseph
  Title: Vice President

 

 

 

 

  ROYAL BANK OF CANADA, as an Issuing Lender and a Lender

 

  By: /s/ Alfonse Simone
  Name: Alfonse Simone
  Title:  Authorized Signatory

 

 

 

 

  CITIGROUP GLOBAL MARKETS INC., as an Issuing Lender and a Lender

 

  By: /s/ Monique Renta
  Name: Monique Renta
  Title: Director

 

 

 

 

  BARCLAYS BANK PLC, as an Issuing Lender and a Lender

 

  By: /s/ Christopher M. Atkin
  Name: Christopher M. Atkin
  Title:  Assistant Vice President

 

 

 

 

  GOLDMAN SACHS BANK USA, as an Issuing Lender and a Lender

 

  By: /s/ Robert Ehudin
  Name: Robert Ehudin
  Title:  Authorized Signatory

 

 

 

 

  Security Benefit Life Insurance CoMPANY , as an Issuing Lender and a Lender

 

  By: /s/ Anthony D. Minella
  Name: Anthony D. Minella
  Title: Chief Investment Officer

 

 

 

Exhibit 10.10

 

EXECUTION VERSION

 

AMENDMENT NO. 1 , dated as of April 6, 2017 (this “ Amendment ”), among Camelot UK Holdco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10314173 (“ Holdings ”) , Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10267893 (“ UK Holdco ”) , Camelot Finance S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register under the number B 208514 (the “ Lux Company Borrower ”) , Camelot Finance LP, a Delaware limited partnership (the “ US Tower Borrower ”) , Camelot Cayman LP, a Cayman Islands exempted limited partnership acting by its general partner, 2530842 Ontario Inc. (the “ FHC Tower Borrower ” and, together with the US Tower Borrower, each a “ Tower Borrower ” and, collectively, the “ Tower Borrowers ”), and the other borrowers listed on Schedule 1 hereto (collectively, the “ US Company Borrowers ”, and, together with the Lux Company Borrower, each a “ Company Borrower ” and, collectively, the “ Company Borrowers ”; the Company Borrowers together with the Tower Borrowers, the “ Borrowers ”), the Subsidiary Guarantors (this and each other capitalized term used herein without definition having the meaning assigned to such term in Section 1.1 of the Credit Agreement described below), CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent for the Lenders and collateral agent for the Secured Parties (in such capacities, the “ Administrative Agent ”) and the Administrative Agent as 2017 Refinancing Term Lender (in such capacity, the “ 2017 Refinancing Term Lender ”).

 

WHEREAS , reference is hereby made to the Credit Agreement dated as of October 3, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time prior to the date hereof, the “ Credit Agreement ”) among the Borrowers, UK Holdco, Holdings, the other guarantors party thereto, the Administrative Agent and the Lenders party thereto (the “ Existing Lenders ”);

 

WHEREAS , pursuant to and in accordance with Section 2.26 of the Credit Agreement, the Borrowers have requested that the Credit Agreement be amended as set forth on Annex A hereto (the Credit Agreement, as so amended, the “ Amended Credit Agreement ”) so as to, among other things, provide for Other Term Loans thereunder consisting of Term Loans (the “ New Term Loans ”), which New Term Loans would refinance the Term Loans (the “ Existing Term Loans ”) outstanding under the Credit Agreement immediately prior to the effectiveness of this Amendment and, except as modified hereby, would have the same terms as the Existing Term Loans;

 

WHEREAS , the 2017 Refinancing Term Lender has agreed, upon the terms and subject to the conditions set forth herein, to make New Term Loans (as to such 2017 Refinancing Term Lender, its “ New Term Commitment ”);

 

WHEREAS , upon the Effective Date (as defined below), each Existing Lender that shall have executed and delivered a Lender Consent (a “ Consent ”) shall be deemed to have consented to this Amendment;

 

WHEREAS , upon the Effective Date, (i) each Existing Lender of Existing Term Loans shall have its Existing Term Loans prepaid in full in accordance with the terms of the Credit Agreement with a portion of the proceeds of the New Term Loans, and (ii) all Existing Term Loans so prepaid shall thereafter be deemed to be no longer be outstanding;

 

 

 

 

WHEREAS , pursuant to Section 11.1(b)(x)(B) of the Credit Agreement, the Borrowers and the Administrative Agent may, and hereby express their desire to, amend the Credit Agreement to correct mistakes or ambiguities of a technical nature (the “ Additional Amendments ”); and

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Section 1.           New Term Loans .

 

(a)          Subject to the terms and conditions set forth herein, the 2017 Refinancing Term Lender hereby (i) commits to provide New Term Loans to the Borrowers in the amount of its New Term Commitment and (ii) agrees to fund New Term Loans to the Borrowers in the amount of its New Term Commitment, after which such commitment shall terminate immediately and without further action. The aggregate amount of the 2017 Refinancing Term Lender’s New Term Commitment on the Effective Date is $1,542,250,000.00.

 

(b)          The amendments set forth in this Section 1 constitute a “Refinancing Amendment” with respect to the establishment of the New Term Commitments and the New Term Loans. Each New Term Loan constitutes an “Other Term Loan” incurred in accordance with Section 2.26(a) of the Amended Credit Agreement.

 

(c)          The New Term Loans shall be subject to the provisions, including any provisions restricting the rights, or regarding the obligations, of the Loan Parties or any provisions regarding the rights of the Lenders, of the Credit Agreement and the other Loan Documents.

 

(d)          The Borrowers shall use the proceeds of the New Term Loans to refinance outstanding Existing Term Loans.

 

Section 2.           Additional Amendments .

 

(a)          On the Effective Date, the Borrower Representative, the Administrative Agent and the 2017 Refinancing Term Lender agree that, with respect to those amendments set forth on Annex A hereto that are necessary or appropriate, in the reasonable opinion of the 2017 Refinancing Term Lender and the Borrower Representative, in consultation with the Administrative Agent, to effect the provisions of Section 2.26 of the Credit Agreement, the Credit Agreement is, effective as of the Effective Date, hereby amended pursuant to Section 2.26 of the Credit Agreement, to delete the stricken text (indicated textually in the same manner as the following example: stricken text ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the Credit Agreement attached as Annex A hereto.

 

(b)          On the Effective Date, each Borrower and the Administrative Agent agree that, with respect to those amendments set forth on Annex A hereto that correct mistakes or ambiguities of a technical nature, the Credit Agreement is, effective as of the Effective Date, hereby amended pursuant to Section 11.1(b)(x)(B) of the Credit Agreement, to delete the stricken text (indicated textually in the same manner as the following example: stricken text ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the Credit Agreement attached as Annex A hereto.

 

  2  

 

 

Section 3.           Provisions Relating to New Term Loans .

 

(a)           Provisions Regarding New Term Loans . On the Effective Date, the Borrowers shall apply the aggregate proceeds of the New Term Loans (if any) to prepay in full the principal amount of all Existing Term Loans. The repayment of the Existing Term Loans with the proceeds of the New Term Loans contemplated hereby collectively constitute a voluntary prepayment of the Existing Term Loans by the Borrowers pursuant to Section 2.10 of the Credit Agreement and shall be subject to the provisions of Section 2.10 of the Credit Agreement (including, without limitation, any prepayment premium payable under the terms thereof); it being understood that the Administrative Agent shall be deemed to have received the required notice of voluntary prepayment in connection with this Amendment. Notwithstanding anything herein or in the Amended Credit Agreement to the contrary, the aggregate principal amount of the New Term Loans will not exceed the aggregate principal amount of the Existing Term Loans outstanding immediately prior to the Effective Date. Each of the parties hereto acknowledges and agrees that the terms of this Amendment do not constitute a novation but, rather, an amendment of the terms of a pre-existing Indebtedness and related agreement, as provided herein.

 

(b)           Interest . Each Borrower hereby agrees that it shall pay to the Existing Lenders on the Effective Date, together with any prepayment of the Existing Term Loans pursuant to this Amendment, all accrued and unpaid interest to (but excluding) the Effective Date on the amount of the Existing Term Loans prepaid or converted pursuant to this Amendment.

 

(c)          Each of the parties hereto acknowledges and agrees that this Amendment constitutes a Refinancing Amendment, and that the New Term Loans constitute Permitted Credit Agreement Refinancing Debt in accordance with Section 2.26 of the Credit Agreement.

 

Section 4.           Representations and Warranties . Each of the Loan Parties represent and warrant to the Administrative Agent and the 2017 Refinancing Term Lender as of the Effective Date that:

 

(a)          This Amendment has been duly executed and delivered on behalf of each Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as such enforceability may be limited by any Legal Reservations;

 

(b)          The execution, delivery and performance by such Loan Party of this Amendment and the consummation of the transactions contemplated herein are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action and do not (x) contravene the terms of any of such Person’s Organizational Documents, or (y) violate any Requirements of Law except as would not reasonably be expected to have a Material Adverse Effect;

 

(c)          All representations and warranties of each Borrower and each other Loan Party contained in Section 4 of the Credit Agreement or any other Loan Document are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, and except that, the representations and warranties contained in Section 4.1 of the Credit Agreement shall be deemed to refer to the most recent financial statements furnished pursuant to Section 6.1(a) and ( b ) of the Credit Agreement, respectively, prior to the Effective Date;

 

(d)          No Default or Event of Default exists or has occurred and is continuing on and as of the Effective Date or, after giving effect hereto, would result from the application of the proceeds from the New Term Loans; and

 

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(e)           As of the Effective Date (and after giving effect to the incurrence of the New Term Loans and the application of the proceeds thereof), each of (i) Holdings and its Subsidiaries, (ii) the US Tower Borrower and Tower LLC, and (iii) the FHC Tower Borrower and Tower Co, each on a consolidated basis, will be and will continue to be, Solvent.

 

Section 5.           Conditions .

 

(a)           Conditions to the Effective Date . The effectiveness of this Amendment and the agreements of the 2017 Refinancing Term Lender hereunder shall be subject to the satisfaction of the following conditions precedent (the date upon which this Amendment becomes effective, the “ Effective Date ”):

 

(i)           Certain Documents . The Administrative Agent shall have received each of the following, each dated the Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent:

 

(1)         counterparts of this Amendment that, when taken together, bear the signatures of (A) Holdings, (B) UK Holdco, (C) each Borrower, (D) each other Guarantor, and (D) the 2017 Refinancing Term Lender;

 

(2)         such customary certificates of resolutions or other action of each US Loan Party and incumbency certificates of Responsible Officers of each US Loan Party, in each case, as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of such Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment unless existing resolutions and/or existing incumbency certificates for such Loan Party passed in connection with the Loan Documents are sufficiently broad to authorize the entry into this First Amendment and other Loan Documents to which such Loan Party is a party.

 

(3)         such other documents as the Lenders or the Administrative Agent may reasonably request to evidence that each US Loan Party is duly organized or formed in its jurisdiction of organization, and that Holdings, UK Holdco, each Borrower and each other Guarantor is validly existing, in good standing in its jurisdiction of organization (to the extent such concept is applicable in the relevant jurisdiction), except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect;

 

(4)         an opinion of Latham & Watkins LLP, customary in form and substance and reasonably satisfactory to the Administrative Agent;

 

(5)         a Borrowing Request requesting the New Term Loans delivered to the Administrative Agent;

 

(6)         a certificate of a Responsible Officer of UK Holdco to the effect that each of the conditions set forth in Sections 2.26 and 5.2 of the Credit Agreement have been satisfied; and

 

  4  

 

 

(ii)          Fees and Expenses Paid . The Administrative Agent and Credit Suisse Securities (USA) LLC shall have received all fees and other amounts due and payable on or prior to the Effective Date, to the extent invoiced at least three Business Days prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including the reasonable fees, charges and disbursements of Fried, Frank Harris, Shriver & Jacobson LLP, counsel to the Administrative Agent and the Administrative Agent’s local counsel) required to be reimbursed or paid by the Borrowers on or prior to the Effective Date hereunder or under any other Loan Document.

 

(iii)         Application of Proceeds . Each Borrower (or the Administrative Agent on its behalf) shall have applied the aggregate proceeds of the New Term Loans to prepay in full the principal amount of all Existing Term Loans.

 

(iv)         Compliance with Credit Agreement . The conditions precedent set forth in Sections 2.26 and 5.2 of the Credit Agreement shall have been satisfied both before and after giving effect to the incurrence of the New Term Loans.

 

(v)          Interest . The Borrowers shall have paid to the Administrative Agent, for the ratable account of the Existing Lenders immediately prior to the Effective Date, all accrued and unpaid interest on the Existing Term Loans to, but not including, the Effective Date.

 

(vi)         Know Your Customer Documentation . Each Borrower shall have provided (to the extent reasonably requested in writing at least 10 days prior to the Effective Date), at least three Business Days prior to the Effective Date, the documentation and other information to the Administrative Agent and the 2017 Refinancing Term Lender that is required by regulatory authorities under the applicable “know-your-customer” rules and regulations and anti-money laundering rules and regulations, including the Patriot Act.

 

Section 6.           Expenses . As and to the extent provided in Section 11.5 of the Credit Agreement, each Borrower agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses incurred by them in connection with this Amendment, including the reasonable fees, charges and disbursements of Fried, Frank Harris, Shriver & Jacobson LLP, counsel for the Administrative Agent.

 

Section 7.           Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission or by email in “.pdf” format shall be effective as delivery of a manually executed counterpart hereof.

 

Section 8.           Applicable Law . The validity, interpretation and enforcement of this Amendment and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

 

Section 9.           Headings . The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

 

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Section 10.          Effect of Amendment . Except as expressly set forth herein, this Amendment shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. As of the Effective Date, each reference in the Credit Agreement to “ this Agreement ,” “ hereunder ,” “ hereof ,” “ herein ,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “ thereunder ,” “ thereof ” and words of like import), shall mean and be a reference to the Credit Agreement as amended hereby, and this Amendment and the Credit Agreement shall be read together and construed as a single instrument. This Amendment shall constitute a Loan Document. The parties hereto hereby consent to the incurrence of the New Term Loans upon the terms and subject to the conditions set forth herein. Upon the Effective Date, all conditions and requirements set forth in the Credit Agreement or the other Loan Documents relating to the effectiveness of this Amendment and the incurrence of the New Term Loans shall be deemed satisfied.

 

Section 11.          Acknowledgement and Affirmation . Each of the Loan Parties hereby (i) acknowledges and agrees that the New Term Loans are Term Loans and the 2017 Refinancing Term Lender is a Term Lender, and that all of its obligations under the Loan Documents (including, without limitation, each Security Agreements and such other Security Documents) to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) reaffirms each Lien granted by such Loan Party to the Administrative Agent for the benefit of the Secured Parties (including the 2017 Refinancing Term Lender) and reaffirms the guaranties made pursuant to Section 8 of the Amended Credit Agreement, (iii) acknowledges and agrees that the grants of security interests by, and the guaranties of, the Loan Parties contained in the Loan Documents (including, without limitation, each Security Agreement, the other Security Documents and the guaranty given by UK Holdco under an English law guarantee dated 3 October 2016 in favor of the Administrative Agent) are, and shall remain, in full force and effect after giving effect to this Amendment and shall extend to secure and guarantee (as the case may be) the Obligations and the Guarantor Obligations under (and as defined in) the Amended Credit Agreement and (iv) agrees that the Obligations include, among other things and without limitation, the prompt and complete payment and performance by each Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the New Term Loans under the Amended Credit Agreement and that the Obligations under the Amended Credit Agreement are included in the “Secured Obligations” (as defined in each Security Agreement and the other Security Documents). Except as expressly set forth herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations, nor in any way limit, impair or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Loan Documents. Nothing herein shall be deemed to entitle Holdings, UK Holdco or any Borrower to a further consent to, or a further waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Amended Credit Agreement or any other Loan Document in similar or different circumstances.

 

[ signature pages follow ]

 

  6  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

HOLDINGS: CAMELOT UK HOLDCO LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title:   Director

 

UK HOLDCO: CAMELOT UK BIDCO LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title:   Director

BORROWERS:  
  CAMELOT U.S. ACQUISITION 1 CO.
  CAMELOT U.S. ACQUISITION 2 CO.
  CAMELOT U.S. ACQUISITION 3 CO.
  CAMELOT U.S. ACQUISITION 4 CO.
  CAMELOT U.S. ACQUISITION 5 CO.
  CAMELOT U.S. ACQUISITION 6 CO.
  CAMELOT U.S. ACQUISITION 7 CO.
  CAMELOT U.S. ACQUISITION 8 CO.
  CAMELOT U.S. ACQUISITION 9 CO.
  CAMELOT U.S. ACQUISITION 10 CO.
  CAMELOT U.S. ACQUISITION 11 CO.
  CAMELOT U.S. ACQUISITION 12 CO.
  CAMELOT U.S. ACQUISITION 13 CO.
  CAMELOT US ACQUISITION LLC

 

  By:   /s/ Sanford Tassel
  Name: Sanford Tassel
  Title:

 

  CAMELOT FINANCE S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register under the number B 208514

 

 

 

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director

 

GUARANTORS:  

 

  eBannerMonitor Inc.
  Enterprise Protection Inc.
  RiskSmart Inc.
  MASTER DATA CENTER, INC.
  Atozdomainsmarket, LLC
  CollectiveTrust Solutions, Inc.
  Data Docket Inc.
  Discovery Logic, Inc.
  DNStination Inc.
  Domain Fortress Inc.
  Information Holdings Inc.
  MarkMonitor Inc.
  MarkManager Inc.
  MarkMonitor (ALL-D) Inc.
  MarkMonitor Corporate Services Inc.
  MarkMonitor EU Registrations Inc.
  MarkMonitor Professional Services Inc.
  MicroPatent LLC
  Muckymuck Inc.
  Patent Bounty Inc.
  Technology Universe Company, Inc.
  Clarivate Analytics (US) LLC
  Clarivate Analytics (Compumark) Inc.

 

  By: /s/ Sanford Tassel
  Name: Sanford Tassel
  Title: Vice President

 

  Clarivate Analytics (International) Limited
  Camelot UK Holdco 2 Limited
  Centre for Innovation in Regulatory Science Limited
  Centre for Medicines Research International Limited
  MarkMonitor Global Services Limited
  MarkMonitor International Limited
  Clarivate Analytics (UK) Limited\
  CAMELOT UK HOLDCO 2 LIMITED

 

  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title:   Director

 

 

 

 

  Camelot Professional K.K.
  Clarivate Analytics (Japan) CO. LTD.

 

  By: /s/ Hirofumi Hino
  Name: Hirofumi Hino
  Title:   Representative Director

 

  Camelot Towerco

 

  By: /s/ John T. McCoy
  Name: John T. McCoy
  Title:   Director

 

  By: /s/ Balan Murugesu
  Name: Balan Murugesu
  Title:   Director

 

 

 

 

  CAMELOT CAYMAN LP
  acting by: 2530842 Ontario Inc., its general partner

 

  By: /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title:  President

 

  By: /s/ David Copeland
  Name: David Copeland
  Title: Vice President

 

  CAMELOT FINANCE LP
  acting by: 2530842 Ontario Inc., its general partner

 

  By: /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title:  President

 

  By: /s/ David Copeland
  Name: David Copeland
  Title: Vice President

 

  CAMELOT FINANCE LLC
  By: CAMELOT FINANCE LP, its sole shareholder
  By: 2530842 Ontario Inc., its general partner

 

  By: /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title:  President

 

  By: /s/ David Copeland
  Name: David Copeland
  Title: Vice President

 

 

 

 

ADMINISTRATIVE AGENT:  
  CREDIT SUISSE AG, CAYMAN ISLANDS
  BRANCH, as Administrative Agent

 

  By: /s/ Robert Hetu
  Name: Robert Hetu
  Title:   Authorized Signatory

 

  By: /s/ Nicholas Goss
  Name: Nicholas Goss
  Title:   Authorized Signatory

 

2017 REFINANCING TERM LENDER: CREDIT SUISSE AG, CAYMAN ISLANDS
  BRANCH, as 2017 Refinancing Term Lender

 

  By: /s/ Robert Hetu
  Name: Robert Hetu
  Title:   Authorized Signatory

 

  By: /s/ Nicholas Goss
  Name: Nicholas Goss
  Title:   Authorized Signatory

 

 

 

 

SCHEDULE 1

 

US COMPANY BORROWERS

 

CAMELOT U.S. ACQUISITION 1 CO.

CAMELOT U.S. ACQUISITION 2 CO.

CAMELOT U.S. ACQUISITION 3 CO.

CAMELOT U.S. ACQUISITION 4 CO.

CAMELOT U.S. ACQUISITION 5 CO.

CAMELOT U.S. ACQUISITION 6 CO.

CAMELOT U.S. ACQUISITION 7 CO.

CAMELOT U.S. ACQUISITION 8 CO.

CAMELOT U.S. ACQUISITION 9 CO.

CAMELOT U.S. ACQUISITION 10 CO.

CAMELOT U.S. ACQUISITION 11 CO.

CAMELOT U.S. ACQUISITION 12 CO.

CAMELOT U.S. ACQUISITION 13 CO.

CAMELOT U.S. ACQUISITION LLC

 

 

 

 

ANNEX A

 

[See Attached]

 

 

 

Exhibit 10.11

 

EXECUTION VERSION

 

AMENDMENT NO. 2 , dated as of November 21, 2017 (this “ Amendment ”), among Camelot UK Holdco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10314173 (“ Holdings ”) , Camelot UK Bidco Limited, a private limited liability company incorporated under the laws of England and Wales with registered number 10267893 (“ UK Holdco ”) , Camelot Finance S.A., a public limited liability company ( société anonyme ) organized and established under the laws of the Grand Duchy of Luxembourg having its registered office at 14, rue Edward Steichen, L-2540 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register under the number B 208514 (the “ Lux Company Borrower ”) , Camelot Finance LP, a Delaware limited partnership (the “ US Tower Borrower ”) , Camelot Cayman LP, a Cayman Islands exempted limited partnership acting by its general partner, 2530842 Ontario Inc. (the “ FHC Tower Borrower ” and, together with the US Tower Borrower, each a “ Tower Borrower ” and, collectively, the “ Tower Borrowers ”), and the other borrowers listed on Schedule 1 hereto (collectively, the “ US Company Borrowers ”, and, together with the Lux Company Borrower, each a “ Company Borrower ” and, collectively, the “ Company Borrowers ”; the Company Borrowers together with the Tower Borrowers, the “ Borrowers ”), the Subsidiary Guarantors (this and each other capitalized term used herein without definition having the meaning assigned to such term in Section 1.1 of the Credit Agreement described below), CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent for the Lenders and collateral agent for the Secured Parties (in such capacities, the “ Administrative Agent ”) and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH as 2017-2 Refinancing Term Lender (in such capacity, the “ 2017-2 Refinancing Term Lender ”).

 

WHEREAS , reference is hereby made to the Credit Agreement dated as of October 3, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time prior to the date hereof, including without limitation by that certain Amendment No. 1 dated as of April 6, 2017, the “ Credit Agreement ”) among the Borrowers, UK Holdco, Holdings, the other guarantors party thereto, the Administrative Agent and the Lenders party thereto (the “ Existing Lenders ”);

 

WHEREAS , pursuant to and in accordance with Section 2.26 of the Credit Agreement, the Borrowers have requested that the Credit Agreement be amended as set forth on Annex A hereto (the Credit Agreement, as so amended, the “ Amended Credit Agreement ”) so as to, among other things, provide for Other Term Loans thereunder consisting of Term Loans (the “ New Term Loans ”), which New Term Loans would refinance the Term Loans (the “ Existing Term Loans ”) outstanding under the Credit Agreement immediately prior to the effectiveness of this Amendment and, except as modified hereby, would have the same terms as the Existing Term Loans;

 

WHEREAS , the 2017-2 Refinancing Term Lender has agreed, upon the terms and subject to the conditions set forth herein, to make New Term Loans (as to such 2017-2 Refinancing Term Lender, its “ New Term Commitment ”);

 

WHEREAS , upon the Effective Date (as defined below), (i) each Existing Lender of Existing Term Loans shall have its Existing Term Loans prepaid in full in accordance with the terms of the Credit Agreement with a portion of the proceeds of the New Term Loans, and (ii) all Existing Term Loans so prepaid shall thereafter be deemed to be no longer be outstanding; and

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

 

 

  

Section 1.           New Term Loans .

 

(a)          Subject to the terms and conditions set forth herein, the 2017-2 Refinancing Term Lender hereby (i) commits to provide New Term Loans to the Borrowers in the amount of its New Term Commitment and (ii) agrees to fund New Term Loans to the Borrowers in the amount of its New Term Commitment, after which such commitment shall terminate immediately and without further action. The aggregate amount of the 2017-2 Refinancing Term Lender’s New Term Commitment on the Effective Date is $1,534,538,750.

 

(b)          The amendments set forth in this Section 1 constitute a “Refinancing Amendment” with respect to the establishment of the New Term Commitments and the New Term Loans. Each New Term Loan constitutes an “Other Term Loan” incurred in accordance with Section 2.26(a) of the Amended Credit Agreement.

 

(c)          The New Term Loans shall be subject to the provisions, including any provisions restricting the rights, or regarding the obligations, of the Loan Parties or any provisions regarding the rights of the Lenders, of the Amended Credit Agreement and the other Loan Documents.

 

(d)          The Borrowers shall use the proceeds of the New Term Loans to refinance outstanding Existing Term Loans.

 

Section 2.           Amendments . On the Effective Date, the Borrower Representative, the Administrative Agent and the 2017-2 Refinancing Term Lender agree that, with respect to those amendments set forth on Annex A hereto that are necessary or appropriate, in the reasonable opinion of the 2017-2 Refinancing Term Lender and the Borrower Representative, in consultation with the Administrative Agent, to effect the provisions of Section 2.26 of the Credit Agreement, the Credit Agreement is, effective as of the Effective Date, hereby amended pursuant to Section 2.26 of the Credit Agreement, to delete the stricken text (indicated textually in the same manner as the following example: stricken text ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the Credit Agreement attached as Annex A hereto.

 

Section 3.           Provisions Relating to New Term Loans .

 

(a)           Provisions Regarding New Term Loans . On the Effective Date, the Borrowers shall apply the aggregate proceeds of the New Term Loans (if any) to prepay in full the principal amount of all Existing Term Loans. The repayment of the Existing Term Loans with the proceeds of the New Term Loans contemplated hereby collectively constitute a voluntary prepayment of the Existing Term Loans by the Borrowers pursuant to Section 2.10 of the Credit Agreement and shall be subject to the provisions of Section 2.10 of the Credit Agreement (including, without limitation, any prepayment premium payable under the terms thereof); it being understood that the Administrative Agent shall be deemed to have received the required notice of voluntary prepayment in connection with this Amendment. Notwithstanding anything herein or in the Amended Credit Agreement to the contrary, the aggregate principal amount of the New Term Loans will not exceed the aggregate principal amount of the Existing Term Loans outstanding immediately prior to the Effective Date. Each of the parties hereto acknowledges and agrees that the terms of this Amendment do not constitute a novation but, rather, an amendment of the terms of a pre-existing Indebtedness and related agreement, as provided herein.

 

(b)           Interest . Each Borrower hereby agrees that it shall pay to the Existing Lenders on the Effective Date, together with any prepayment of the Existing Term Loans pursuant to this Amendment, all accrued and unpaid interest to (but excluding) the Effective Date on the amount of the Existing Term Loans prepaid or converted pursuant to this Amendment.

 

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(c)          Each of the parties hereto acknowledges and agrees that this Amendment constitutes a Refinancing Amendment, and that the New Term Loans constitute Permitted Credit Agreement Refinancing Debt in accordance with Section 2.26 of the Credit Agreement.

 

Section 4.           Representations and Warranties . Each of the Loan Parties represent and warrant to the Administrative Agent and the 2017-2 Refinancing Term Lender as of the Effective Date that:

 

(a)          This Amendment has been duly executed and delivered on behalf of each Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as such enforceability may be limited by any Legal Reservations;

 

(b)          The execution, delivery and performance by such Loan Party of this Amendment and the consummation of the transactions contemplated herein are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action and do not (x) contravene the terms of any of such Person’s Organizational Documents, or (y) violate any Requirements of Law except as would not reasonably be expected to have a Material Adverse Effect;

 

(c)          All representations and warranties of each Borrower and each other Loan Party contained in Section 4 of the Credit Agreement or any other Loan Document are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, and except that, the representations and warranties contained in Section 4.1 of the Credit Agreement shall be deemed to refer to the most recent financial statements furnished pursuant to Section 6.1(a) and ( b ) of the Credit Agreement, respectively, prior to the Effective Date;

 

(d)          No Default or Event of Default exists or has occurred and is continuing on and as of the Effective Date or, after giving effect hereto, would result from the application of the proceeds from the New Term Loans; and

 

(e)           As of the Effective Date (and after giving effect to the incurrence of the New Term Loans and the application of the proceeds thereof), each of (i) Holdings and its Subsidiaries, (ii) the US Tower Borrower and Tower LLC, and (iii) the FHC Tower Borrower and Tower Co, each on a consolidated basis, will be and will continue to be, Solvent.

 

Section 5.           Conditions .

 

(a)           Conditions to the Effective Date . The effectiveness of this Amendment and the agreements of the 2017-2 Refinancing Term Lender hereunder shall be subject to the satisfaction of the following conditions precedent (the date upon which this Amendment becomes effective, the “ Effective Date ”):

 

(i)           Certain Documents . The Administrative Agent shall have received each of the following, each dated the Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent:

 

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(1)         counterparts of this Amendment that, when taken together, bear the signatures of (A) Holdings, (B) UK Holdco, (C) each Borrower, (D) each other Guarantor, and (D) the 2017-2 Refinancing Term Lender;

 

(2)         such customary certificates of resolutions or other action of each US Loan Party and incumbency certificates of Responsible Officers of each US Loan Party, in each case, as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of such Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment unless existing resolutions and/or existing incumbency certificates for such Loan Party passed in connection with the Loan Documents are sufficiently broad to authorize the entry into this Amendment and other Loan Documents to which such Loan Party is a party.

 

(3)         such other documents as the Lenders or the Administrative Agent may reasonably request to evidence that each US Loan Party is duly organized or formed in its jurisdiction of organization, and that Holdings, UK Holdco, each Borrower and each other Guarantor is validly existing, in good standing in its jurisdiction of organization (to the extent such concept is applicable in the relevant jurisdiction), except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect;

 

(4)         an opinion of Latham & Watkins LLP, customary in form and substance and reasonably satisfactory to the Administrative Agent;

 

(5)         a Borrowing Request requesting the New Term Loans delivered to the Administrative Agent; and

 

(6)         a certificate of a Responsible Officer of UK Holdco to the effect that each of the conditions set forth in Sections 2.26 and 5.2 of the Credit Agreement have been satisfied; and

 

(ii)          Fees and Expenses Paid . The Administrative Agent and Credit Suisse Securities (USA) LLC shall have received all fees and other amounts due and payable on or prior to the Effective Date, to the extent invoiced at least three Business Days prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including the reasonable fees, charges and disbursements of Fried, Frank Harris, Shriver & Jacobson LLP, counsel to the Administrative Agent and the Administrative Agent’s local counsel) required to be reimbursed or paid by the Borrowers on or prior to the Effective Date hereunder or under any other Loan Document.

 

(iii)         Application of Proceeds . Each Borrower (or the Administrative Agent on its behalf) shall have applied the aggregate proceeds of the New Term Loans to prepay in full the principal amount of all Existing Term Loans.

 

(iv)         Compliance with Credit Agreement . The conditions precedent set forth in Sections 2.26 and 5.2 of the Credit Agreement shall have been satisfied both before and after giving effect to the incurrence of the New Term Loans.

 

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(v)          Interest . The Borrowers shall have paid to the Administrative Agent, for the ratable account of the Existing Lenders immediately prior to the Effective Date, all accrued and unpaid interest on the Existing Term Loans to, but not including, the Effective Date.

 

(vi)         Know Your Customer Documentation . Each Borrower shall have provided (to the extent reasonably requested in writing at least 10 days prior to the Effective Date), at least three Business Days prior to the Effective Date, the documentation and other information to the Administrative Agent and the 2017-2 Refinancing Term Lender that is required by regulatory authorities under the applicable “know-your-customer” rules and regulations and anti-money laundering rules and regulations, including the Patriot Act.

 

Section 6.            Expenses . As and to the extent provided in Section 11.5 of the Credit Agreement, each Borrower agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses incurred by them in connection with this Amendment, including the reasonable fees, charges and disbursements of Fried, Frank Harris, Shriver & Jacobson LLP, counsel for the Administrative Agent.

 

Section 7.              Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission or by email in “.pdf” format shall be effective as delivery of a manually executed counterpart hereof.

 

Section 8.           Applicable Law . The validity, interpretation and enforcement of this Amendment and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

 

Section 9.           Headings . The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 10.         Effect of Amendment . Except as expressly set forth herein, this Amendment shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. As of the Effective Date, each reference in the Credit Agreement to “ this Agreement ,” “ hereunder ,” “ hereof ,” “ herein ,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “ thereunder ,” “ thereof ” and words of like import), shall mean and be a reference to the Credit Agreement as amended hereby, and this Amendment and the Credit Agreement shall be read together and construed as a single instrument. This Amendment shall constitute a Loan Document. The parties hereto hereby consent to the incurrence of the New Term Loans upon the terms and subject to the conditions set forth herein. Upon the Effective Date, all conditions and requirements set forth in the Credit Agreement or the other Loan Documents relating to the effectiveness of this Amendment and the incurrence of the New Term Loans shall be deemed satisfied.

 

  5  

 

 

Section 11.        Acknowledgement and Affirmation . Each of the Loan Parties hereby (i) acknowledges and agrees that the New Term Loans are Term Loans and the 2017-2 Refinancing Term Lender is a Term Lender, and that all of its obligations under the Loan Documents (including, without limitation, each Security Agreements and such other Security Documents) to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) reaffirms each Lien granted by such Loan Party to the Administrative Agent for the benefit of the Secured Parties (including the 2017-2 Refinancing Term Lender) and reaffirms the guaranties made pursuant to Section 8 of the Amended Credit Agreement, (iii) acknowledges and agrees that the grants of security interests by, and the guaranties of, the Loan Parties contained in the Loan Documents (including, without limitation, each Security Agreement, the other Security Documents and the guaranty given by UK Holdco under an English law guarantee dated 3 October 2016 in favor of the Administrative Agent) are, and shall remain, in full force and effect after giving effect to this Amendment and shall extend to secure and guarantee (as the case may be) the Obligations and the Guarantor Obligations under (and as defined in) the Amended Credit Agreement and (iv) agrees that the Obligations include, among other things and without limitation, the prompt and complete payment and performance by each Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the New Term Loans under the Amended Credit Agreement and that the Obligations under the Amended Credit Agreement are included in the “Secured Obligations” (as defined in each Security Agreement and the other Security Documents). Except as expressly set forth herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations, nor in any way limit, impair or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Loan Documents. Nothing herein shall be deemed to entitle Holdings, UK Holdco or any Borrower to a further consent to, or a further waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Amended Credit Agreement or any other Loan Document in similar or different circumstances.

 

[ signature pages follow ]

 

  6  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

HOLDINGS: CAMELOT UK HOLDCO LIMITED
   
  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director  
   
UK HOLDCO: CAMELOT UK BIDCO LIMITED
   
  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director  
   
BORROWERS: CAMELOT FINANCE LP
   
  By: /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title: President
   
  By: /s/ David Copeland
  Name: David Copeland
  Title: Vice President
   
  CAMELOT CAYMAN LP
  acting by: 2530842 Ontario Inc., its general partner
   
  By: /s/ Christopher A. Govan
  Name: Christopher A. Govan
  Title: President
   
  By: /s/ David Copeland
  Name: David Copeland
  Title: Vice President
   
  CAMELOT U.S. ACQUISITION 1 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer

 

 

 

  

  CAMELOT U.S. ACQUISITION 2 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 3 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 4 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 5 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 6 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 7 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer

 

 

 

  

  CAMELOT U.S. ACQUISITION 8 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 9 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 10 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 11 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 12 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT U.S. ACQUISITION 13 CO.
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  CAMELOT FINANCE S.A.,
   
  By: /s/ Stephen Hartman
  Name: Stephen Hartman
  Title: Director  

 

 

 

  

  CAMELOT US ACQUISITION LLC
   
  By: /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer

 

 

 

  

GUARANTORS:  
   
  eBannerMonitor Inc.
  Enterprise Protection Inc.
  RiskSmart Inc.
  MASTER DATA CENTER, INC.
  Atozdomainsmarket, LLC
  CollectiveTrust Solutions, Inc.
  Data Docket Inc.
  Discovery Logic, Inc.
  DNStination Inc.
  Domain Fortress Inc.
  Information Holdings Inc.
  MarkMonitor Inc.
  MarkManager Inc.
  MarkMonitor (ALL-D) Inc.
  MarkMonitor Corporate Services Inc.
  MarkMonitor EU Registrations Inc.
  MarkMonitor Professional Services Inc.
  MicroPatent LLC
  Muckymuck Inc.
  Patent Bounty Inc.
  Technology Universe Company, Inc.
  Clarivate Analytics (US) LLC
  Clarivate Analytics (Compumark) Inc.
   
  By:  /s/ Richard Hanks
  Name: Richard Hanks
  Title: Chief Financial Officer
   
  Clarivate Analytics (International) Limited
  Centre for Innovation in Regulatory Science Limited
  Centre for Medicines Research International Limited
  MarkMonitor Global Services Limited
  MarkMonitor International Limited
  Clarivate Analytics (UK) Limited
  Camelot UK Holdco 2 Limited
   
  By:   /s/ Stephen Hartman                        
  Name: Stephen Hartman
  Title: Director

 

 

 

  

  Camelot Professional K.K.
  Clarivate Analytics (Japan) CO., LTD.
   
  By:  /s/ Hirofumi Hino
  Name: Hirofumi Hino
  Title: Representative Director
   
  Camelot Finance LLC
   
  By:  /s/ Joshua Hausman
  Name: Joshua Hausman
  Title: Director
   
  Camelot Towerco
   
  By:  /s/ John T. McCoy
  Name: John T. McCoy
  Title: Director
   
  By:  /s/ Vijayabalan Murugesu
  Name: Vijayabalan Murugesu
  Title: Director

 

 

 

  

ADMINISTRATIVE AGENT: CREDIT SUISSE AG, CAYMAN ISLANDS
  BRANCH, as Administrative Agent
   
  By: /s/ William O’Daly
  Name: William O’Daly
  Title: Authorized Signatory  
   
  By: /s/ Andrew Griffin
  Name: Andrew Griffin
  Title: Authorized Signatory
   
2017-2 REFINANCING TERM LENDER: CREDIT SUISSE AG, CAYMAN ISLANDS
  BRANCH, as 2017-2 Refinancing Term Lender
   
  By: /s/ William O’Daly
  Name: William O’Daly
  Title: Authorized Signatory  
   
  By: /s/ Andrew Griffin
  Name: Andrew Griffin
  Title: Authorized Signatory

  

 

 

 

SCHEDULE 1

 

US COMPANY BORROWERS

 

CAMELOT U.S. ACQUISITION 1 CO.

CAMELOT U.S. ACQUISITION 2 CO.

CAMELOT U.S. ACQUISITION 3 CO.

CAMELOT U.S. ACQUISITION 4 CO.

CAMELOT U.S. ACQUISITION 5 CO.

CAMELOT U.S. ACQUISITION 6 CO.

CAMELOT U.S. ACQUISITION 7 CO.

CAMELOT U.S. ACQUISITION 8 CO.

CAMELOT U.S. ACQUISITION 9 CO.

CAMELOT U.S. ACQUISITION 10 CO.

CAMELOT U.S. ACQUISITION 11 CO.

CAMELOT U.S. ACQUISITION 12 CO.

CAMELOT U.S. ACQUISITION 13 CO.

CAMELOT U.S. ACQUISITION LLC

 

 

 

  

ANNEX A

 

[See Attached]

 

 

 

Exhibit 10.12

 

EXECUTION VERSION

 

January 14, 2019

 

PERSONAL AND CONFIDENTIAL

 

Clarivate Analytics Plc
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom

 

To Whom It May Concern:

 

I am writing to confirm my agreement to serve as a member of the Board of Directors (the “ Board ”) of Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), during the six-year period following the date of this letter if I am nominated and elected to the Board during such period.

 

If I am so elected, I commit to serve and to fulfill my duties and responsibilities as a member of the Board to the best of my abilities during the term of my Board service.

 

In addition, during my service as a member of the Board, and in any event for a minimum of three years from the date of the beginning of my service on the Board, I will provide whatever services to the Company that are reasonably requested, within my direct ability to perform, and in the interest of the Company to increase the value of the Company.

 

Further, during my service as a member of the Board, and for a period of five years from the date of the beginning of my service on the Board, I will not, directly or indirectly, for my own benefit or for the benefit of any third party, in any capacity (as a principal, shareholder, partner, director, officer, agent, executive, consultant, contractor, employee, lender or otherwise), engage or participate in, or be financially interested in, any business that is competitive with the Company or its subsidiaries anywhere in the world; provided, however, that (i) my passive ownership of less than 1% of any class of equity securities of a company whose securities are publicly traded on a national securities exchange or on a national market system and (ii) my ownership of any securities of IHS Markit, Inc. held by me as of the date hereof shall not be a violation of this letter agreement.

 

 

 

 

The parties agree that the restrictions contained in the immediately preceding paragraph are reasonable in scope and duration in light of the nature, size and location of the Company, its subsidiaries and its and their respective businesses following consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of the date hereof (the “ Merger Agreement ”), by and among the Company, Churchill Capital Corp, Camelot Holdings (Jersey) Limited, CCC Merger Sub, Inc. and Camelot Merger Sub (Jersey) Limited. It is the desire and intent of the parties that the provisions of the immediately preceding paragraph be enforced to the fullest extent permissible under applicable law. If any part of the immediately preceding paragraph is held to be excessively broad as to duration, scope, activity or subject, such part will be construed by limiting and reducing it so as to be enforceable to the maximum extent permissible under applicable law. I hereby acknowledge and agree that in the event of any breach or threatened breach of the provisions of the immediately preceding paragraph, the Company, in addition to any other remedies available to it, will be entitled to any equitable relief restraining me from any such breach or threatened breach, without the need to provide any bond or other security. This letter agreement, including the provisions of the immediately preceding paragraph, are a material inducement to the Company to enter into and perform its obligations under the Merger Agreement. The shareholders of the Company affiliated with Onex Partners Advisor LP and Baring Private Equity Asia Group Limited are express third party beneficiaries of, and entitled to enforce, this letter agreement. The terms of paragraph 17 of the Sponsor Agreement (as defined in the Merger Agreement) will apply to and govern this letter agreement, mutatis mutandis . I consent to the public filing or other disclosure of this letter agreement.

 

[Signature pages follow]

 

  - 2 -  

 

 

  Sincerely,
   
  /s/ Jerre Stead
  Jerre Stead

 

[Signature Page to Board Acknowledgement Letter – Stead]

 

 

 

 

ACCEPTED AND AGREED TO

as of the date first written above:

 

CLARIVATE ANALYTICS PLC

 

By: /s/ Paul Edwards  
Name: Paul Edwards  
Title: Director  

 

[Signature Page to Board Acknowledgement Letter – Stead]

 

 

 

Exhibit 10.13

 

EXECUTION VERSION

 

January 14, 2019

 

PERSONAL AND CONFIDENTIAL

 

Clarivate Analytics Plc
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom

 

To Whom It May Concern:

 

I am writing to confirm my agreement to serve as a member of the Board of Directors (the “ Board ”) of Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), during the six-year period following the date of this letter if I am nominated and elected to the Board during such period.

 

If I am so elected, I commit to serve and to fulfill my duties and responsibilities as a member of the Board to the best of my abilities during the term of my Board service.

 

In addition, during my service as a member of the Board, and in any event for a minimum of three years from the date of the beginning of my service on the Board, I will provide whatever services to the Company that are reasonably requested, within my direct ability to perform, and in the interest of the Company to increase the value of the Company.

 

Further, during my service as a member of the Board, and for a period of five years from the date of the beginning of my service on the Board, I will not, directly or indirectly, for my own benefit or for the benefit of any third party, in any capacity (as a principal, shareholder, partner, director, officer, agent, executive, consultant, contractor, employee, lender or otherwise), engage or participate in, or be financially interested in, any business that is competitive with the Company or its subsidiaries anywhere in the world; provided, however, that my passive ownership of less than 1% of any class of equity securities of a company whose securities are publicly traded on a national securities exchange or on a national market system, shall not be a violation of this letter agreement.

 

 

 

 

The parties agree that the restrictions contained in the immediately preceding paragraph are reasonable in scope and duration in light of the nature, size and location of the Company, its subsidiaries and its and their respective businesses following consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of the date hereof (the “ Merger Agreement ”), by and among the Company, Churchill Capital Corp, Camelot Holdings (Jersey) Limited, CCC Merger Sub, Inc. and Camelot Merger Sub (Jersey) Limited. It is the desire and intent of the parties that the provisions of the immediately preceding paragraph be enforced to the fullest extent permissible under applicable law. If any part of the immediately preceding paragraph is held to be excessively broad as to duration, scope, activity or subject, such part will be construed by limiting and reducing it so as to be enforceable to the maximum extent permissible under applicable law. I hereby acknowledge and agree that in the event of any breach or threatened breach of the provisions of the immediately preceding paragraph, the Company, in addition to any other remedies available to it, will be entitled to any equitable relief restraining me from any such breach or threatened breach, without the need to provide any bond or other security. This letter agreement, including the provisions of the immediately preceding paragraph, are a material inducement to the Company to enter into and perform its obligations under the Merger Agreement. The shareholders of the Company affiliated with Onex Partners Advisor LP and Baring Private Equity Asia Group Limited are express third party beneficiaries of, and entitled to enforce, this letter agreement. The terms of paragraph 17 of the Sponsor Agreement (as defined in the Merger Agreement) will apply to and govern this letter agreement, mutatis mutandis . I consent to the public filing or other disclosure of this letter agreement.

 

[Signature pages follow]

 

  - 2 -  

 

 

  Sincerely,
   
  /s/ Sheryl von Blucher
  Sheryl von Blucher

 

[Signature Page to Board Acknowledgement Letter – von Blucher]

 

 

 

 

ACCEPTED AND AGREED TO

as of the date first written above:

 

CLARIVATE ANALYTICS PLC

 

By: /s/ Paul Edwards  
Name: Paul Edwards  
Title: Director  

 

[Signature Page to Board Acknowledgement Letter – von Blucher]

 

 

 

Exhibit 10.14

 

February 24, 2019

 

PERSONAL AND CONFIDENTIAL

 

Clarivate Analytics Plc
Friars House
160 Blackfriars Road
London SE1 8EZ United Kingdom

 

To Whom It May Concern:

 

I am writing to confirm my agreement to serve as a member of the Board of Directors (the “ Board ”) of Clarivate Analytics Plc, a public limited company organized under the laws of the Island of Jersey (the “ Company ”), during the six-year period following the consummation of the transactions contemplated by the Merger Agreement (as defined below) if I am nominated and elected to the Board during such period.

 

If I am so elected, I commit to serve and to fulfill my duties and responsibilities as a member of the Board to the best of my abilities during the term of my Board service.

 

In addition, during my service as a member of the Board, and in any event for a minimum of three years from the date of the beginning of my service on the Board, I will provide whatever services to the Company that are reasonably requested, within my individual ability to perform, and in the interest of the Company to increase the value of the Company.

 

Further, commencing on the date of the beginning of my service as a member of the Board in connection with the consummation of the transactions contemplated by the Merger Agreement, and for a period ending three years from the date of the beginning of my service as a member of the Board, I will not, directly or indirectly, for my own benefit or for the benefit of any third party, in any capacity (as a principal, shareholder, partner, director, officer, agent, executive, advisor, consultant, contractor, employee, lender or otherwise), engage with, participate in, or be financially interested in, (i) any direct competitor, or any person or entity that has a direct or indirect equity interest in 50% or more of the outstanding equity interests of such direct competitor, in each case, included on the list of direct competitors provided by the Company to me on the date hereof, or (ii) any person or entity not listed on such list that has a business that is directly competitive with a material business or business line of the Company; provided, however, that (a) my passive ownership of less than 1% of any class of equity securities of a company whose securities are publicly traded on a national securities exchange or on a national market system shall not be a violation of this letter agreement, (b) for the avoidance of doubt, the foregoing restrictions only apply to direct competitors (and not the information technology market more broadly) and that internal services within a firm for its own use (and not offered to external customers) shall not be considered a direct competitor, (c) with regard to my current or prospective clients that are enterprises with multiple lines of business or are institutional money managers (e.g., private equity funds, hedge funds or other non-strategic buyers) that may invest in a direct competitor, this paragraph will not limit my advising such enterprise, investor or any other business unit or portfolio company of such enterprise or investor so long as such advisory work (1) is not directly related in any material respect to any business line, investment or potential investment in a business line that directly competes with a material business of the Company (with an understanding that, in furtherance and not in limitation of this clause (c), in connection with an advisory assignment involving the purchase, sale, sale of assets, business combination or other similar transaction involving a company, business or business line of which a minority portion qualifies under the foregoing clause (ii) (a “ Transaction ”), the advisory work (which may include issuance of an overall fairness opinion) with regard to the proposed Transaction will not be considered “directly related in any material respect” to the competitive business for purposes of this clause (1) if it is not focused in any material respect on such minority portion), provided, however, that in the case of this clause (c), such advisory work may not be with regard to consideration or consummation of an acquisition of all or any part of the Company or any of its subsidiaries, and (2) complies with the second sentence of the next paragraph, and (d) in a situation where I am restricted by the foregoing clause (i) or (ii), nothing set forth herein will limit the investment banking or other activities of any other individual executive, officer or partner or employee at an entity controlled by me (or of which I am an executive officer or partner) who has not received (directly or indirectly) confidential information about the Company or any of its subsidiaries from the Company (or any of its subsidiaries), me, any officer or other director of the Company (or any of its subsidiaries) or anyone who such individual knows or should know to be under an obligation of confidentiality to the Company or any of its subsidiaries.

 

 

 

 

For the avoidance of doubt, for the period referenced in the immediately preceding paragraph, I will not, and I will cause any person or entity controlled by me not to, directly or indirectly, take on a new engagement for or otherwise participate with any party involving a possible purchase or other acquisition of securities or assets of a person or entity or business combination with a person or entity if I have knowledge that the Company has taken (internal or external) steps to pursue such purchase, acquisition or business combination or any similar purchase, acquisition or business combination involving such person or entity. In addition, I agree not to, directly or indirectly, use (or allow any person or entity controlled by me to use), for any purpose other than in furtherance of the business or operations of the Company, any confidential information of the Company received (directly or indirectly) from the Company (or any of its subsidiaries), any officer or other director of the Company (or any of its subsidiaries) or anyone who I know or should know to be under an obligation of confidentiality to the Company or any of its subsidiaries.

 

The parties agree that the restrictions contained in the immediately preceding paragraph are reasonable in scope and duration in light of the nature, size and location of the Company, its subsidiaries and its and their respective businesses following consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of January 14, 2019 (the “ Merger Agreement ”), by and among the Company, Churchill Capital Corp, Camelot Holdings (Jersey) Limited, CCC Merger Sub, Inc. and Camelot Merger Sub (Jersey) Limited. It is the desire and intent of the parties that the provisions of the immediately preceding paragraph be enforced to the fullest extent permissible under applicable law. If any part of the immediately preceding paragraph is held to be excessively broad as to duration, scope, activity or subject, such part will be construed by limiting and reducing it so as to be enforceable to the maximum extent permissible under applicable law. I hereby acknowledge and agree that in the event of any breach or threatened breach of the provisions of the immediately preceding paragraph, the Company, in addition to any other remedies available to it, will be entitled to any equitable relief restraining me from any such breach or threatened breach, without the need to provide any bond or other security. This letter agreement, including the provisions of the immediately preceding paragraph, are a material inducement to the Company to enter into and perform its obligations under the Merger Agreement. The shareholders of the Company affiliated with Onex Partners Advisor LP and Baring Private Equity Asia Group Limited are express third party beneficiaries of, and entitled to enforce, this letter agreement as it may be amended by agreement between me and the Company from time to time. The terms of paragraph 17 of the Sponsor Agreement (as defined in the Merger Agreement) will apply to and govern this letter agreement, mutatis mutandis . This letter agreement (together with the list of direct competitors provided by the Company to me on the date hereof) constitutes the entire agreement between the Company and me and supersedes all prior agreements, both written and oral, with respect to the subject matter hereof. I consent to the public filing or other disclosure of this letter agreement.

 

[Signature pages follow]

 

  - 2 -  

 

 

  Sincerely,
   
  /s/ Michael Klein
   
  Michael Klein

 

[Signature Page to Board Acknowledgement Letter – Klein]

 

 

 

 

ACCEPTED AND AGREED TO  
as of the date first written above:  
   
CLARIVATE ANALYTICS PLC  
     
By: /s/ Paul Edwards  
Name: Paul Edwards  
Title: Director  

 

[Signature Page to Board Acknowledgement Letter – Klein]

 

 

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in this Registration Statement on Form F-4 of Clarivate Analytics Plc of our report dated February 26, 2019 relating to the financial statements of Camelot Holdings (Jersey) Limited, which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

/s/PricewaterhouseCoopers LLP  
Philadelphia, Pennsylvania  
February 27, 2019  

  

 

 

 

Exhibit 23.2

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in this Registration Statement on Form F-4 of Clarivate Analytics Plc of our report dated February 26, 2019 relating to the consolidated financial statement of Clarivate Analytics Plc, which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

/s/PricewaterhouseCoopers LLP  
Philadelphia, Pennsylvania  
February 27, 2019  

 

 

 

 

Exhibit 23.3

 

 

Independent Registered Public Accounting Firm’s Consent

 

We consent to the inclusion in this Registration Statement of Clarivate Analytics PLC on Form F-4 of our report dated February 27, 2019, with respect to our audit of the financial statements of Churchill Capital Corp. as of December 31, 2018 and for the period from June 20, 2018 (inception) through December 31, 2018, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.

 

 

/s/ Marcum llp

 

Marcum llp

New York, NY

February 27, 2019

 

 

 

 

Exhibit 99.1

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Jay Nadler
   
  Signature

 

 

 

 

Exhibit 99.2

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Jerre Stead
   
  Signature

 

 

 

 

Exhibit 99.3

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Anthony Munk
   
  Signature

 

 

 

 

Exhibit 99.4

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Balakrishnan S. Iyer
   
  Signature

 

 

 

 

Exhibit 99.5

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Charles E. Moran
   
  Signature

 

 

 

 

Exhibit 99.6

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Charles J. Neral
   
  Signature

 

 

 

 

Exhibit 99.7

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

  /s/ Karen G. Mills
   
  Signature

 

 

 

 

Exhibit 99.8

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Matthew Scattarella

   
  Signature

 

 

 

 

Exhibit 99.9

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Martin Broughton

   
  Signature

 

 

 

 

Exhibit 99.10

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Michael Klein

   
  Signature

 

 

 

 

Exhibit 99.11

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Nicholas Macksey

   
  Signature

 

 

 

 

Exhibit 99.12

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Sheryl von Blucher

   
  Signature

 

 

 

 

Exhibit 99.13

 

 

 

Consent to be Named as a Director Nominee

 

In connection with the filing by Clarivate Analytics Plc of the Registration Statement on Form F-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Clarivate Analytics Plc in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

Dated: February 27, 2019

 

 

 

/s/ Amir Motamedi

   
  Signature